$8M Loan Funds Acquisition, Renovation

PORT ARTHUR, TX-A multifamily investor has obtained $8.3 million to buy and renovate a 17-building, 256-unit complex, originally run as a rental community for the elderly.

Heatherbrook Apartments LP received the funding for 7900 Heatherbrook Trail in Port Arthur from GMAC Commercial Mortgage Corp. The owner, a partnership led by investor Ike Akbari of Port Arthur, will use the proceeds along with a 10-year allocation of low-income housing tax credits from Texas to renovate the property. The property will shed its designation as a home for elderly residents. Akbari's group acquired the property from New Town Retirement Center Ltd.

The Horsham, PA-based GMAC provided an FHA-insured loan underwritten at 5.9% over 40 years and underwrote tax-exempt bond issuance through subsidiary, GMAC Commercial Holding Capital Corp. The owner also was guaranteed $421,398 annually for 10 years through the tax credit program. According to GMAC officials, Akbari plans to "extensively renovate" the 20-year-old apartments, which sit on an 11.3-acre parcel in the city's northwest area. In Texas Department of Housing and Community Affairs documents filed in order to obtain the housing tax credits, Akbari indicated that construction is expected to begin in October and be completed by October 2005.

The garden-style buildings contain a mix of studios, one- and two-bedroom units with a net rentable area of 131,630 sf. Rents range from $473 to $716 per month, averaging $514 or 90 cents per sf. According to state documents, units will get new kitchen cabinets with granite countertops, ceramic tile flooring and upgraded bathrooms. The renovation project also includes new air ducts, roofs, balcony and stairway railings plus an updated community room.