48-Unit Complex Sparks Bidding War

The 48-unit O'Connor Place Apartments at 516 Fifth Ave. in South Irving triggered the race in the first week of marketing and cornered a contract in the second week, Jeff Ratliff, executive vice president for Dallas-based AmeriSouth Real Estate Services, tells GlobeSt.com. The winning bid came from a local investment group led by Derrick Caballero with Phillips Commercial in Dallas.

In October 2002, O'Connor Place LP, with principal Shirley Smith of Dallas in the driver's seat, acquired the holding at a 50% occupancy, replaced the management and made some upgrades for the turnaround play. "We had underestimated the demand for an 80% occupied property with small units," Ratliff says. "The deal got unbelievable attention."

Ratliff says most of the upside will come from lease-up by an in-house management team for the 1950s-something complex. O'Connor Place has eight one-bedroom units with 459 sf; 38 two-bedroom designs, 613 sf; and a pair of three-bedroom floor plans with 761 sf. The existing rents are $570, $670 and $800, all bills paid and no concessions. Ratliff says all units are individually metered for electricity and gas so the new owner has the option to gain additional upside by flipping the switch on the perk.

The majority of investors lining up for the listing hailed from California. Caballero's local presence helped sway the decision, according to Ratliff. Caballero made the close with an 80% loan-to-value financing arranged by Jim Osgood with BMC Capital Inc. of Dallas.