$28M Wins 538-Unit Arlington Asset

John Bell, vice president on the buy side, tells GlobeSt.com that the complex at 1775 NE Green Oaks Blvd. in Arlington was on the market, not once but twice, for $32 million. And the Steven D. Bell Co. bid, not once but twice, for a class B-plus asset with upside in a 90% occupancy and a slight rent hike if the market can support it. "We won't spend the money (to renovate) if we can't raise the rent," he stresses about the fifth property for the now 1,700-unit Texas portfolio.

The Chicago-based AMLI bought 35% of the Verandahs in 1997 and then bought out the equity partner's 65% stake in early 2003. Mark Alfieri, AMLI's vice president, says the property came to market a year later as "part of our continued effort to sell older assets and buy new."

Alfieri says the Verandahs hit the market in November 2003, attracting more than 20 offers. The gain from the sale--AMLI's second in North Texas in a month--will be used for acquisition and development activities, including Dallas/Fort Worth although nothing has been identified as replacement property at this point in time, he says. AMLI's press release said the transaction resulted in an un-levered internal rate of return of about 10.8% for a near seven-year hold. Brian O'Boyle and Jerry Lamm with Apartment Realty Advisors in Dallas brokered the deal.

AMLI has two other complexes on the market on the Dallas side of the metroplex. "They should sell in 60 to 90 days," Alfieri confides. The "to go" product is the 312-unit AMLI at Nantucket at 18949 Marsh Lane and 260-unit AMLI on Timberglen at 3565 Timberglen Road, bearing Dallas County assessments of $12.7 million and $11.6 million, respectively.

Built in stages in 1986 and 1991, the 13-acre complex's units average 750 sf, with monthly rents averaging $720. Concessions right now vary, but some floor plans can get one to two months on a one-year lease and others zero to two months.

"Maybe there's not tons of upside," Bell says of the $28-million, plus-or-minus deal., "but there's not tons of downside either. We don't think we got a great value, but we feel we got a reasonable value...for a long-term investment." The firm most often holds six to eight years.

The North Carolina company, looking for more value buys in Texas, owns 16,386 units in 61 properties in an eight-state portfolio that also includes close to three million sf of retail and office properties. The Texas package includes the Alta Brook Apartments at 3030 Dunvale Road in Houston; Alta Indian Creek Apartments at 1152 Indian Run Drive in Carrollton; and Alta Ridglea at 3601 Westridge Ave. and the Reserve at Oak Hill at 2450 Oak Hill Circle, both in Fort Worth.