The Gilroy, CA buyer, who previously bought a 75-unit complex in Dallas, picked up another 94 apartments at 1239 Hartsdale Dr. near Fort Worth Avenue in Dallas. The French Colony Apartments' transaction, with one year left on a tax credit commitment, closed at $25,000 below the ask, John Barker with Marcus & Millichap's Dallas office tells GlobeSt.com.
The 95%-leased French Colony was on the market just one day when Barker, assisted by Marcus & Millichap junior broker Al Silva, put the listing before the California buyer. "I just closed Sacramento for him. I knew what he had and this fit perfectly," Barker explains about the quick trade for seller, Hartshaw Assets of Dallas, which owned the 40-year-old holding since 1991. The partners in the single-asset holding will reinvest their gain into other businesses, according to Barker.
The buyer closed the deal with a five-year loan, with an 80% LTV, from LaSalle Bank in Dallas. Barker says today's plan is to close on another 116 units in Dallas to fully satisfy the exchange.
French Colony is a mix of 42 one-bedroom, one-bath designs of 540 sf and 615 sf along with 52 two-bedroom apartments with 855 sf. Monthly rents are resting at $575 for the one-bedrooms and $680 for the larger apartments. Majestic Realty of Dallas was hired to manage the new buy.
"It's one of the cleanest properties I've seen of this age and location in a long time," Barker says, adding the upside lies in pushing rents for sub-metered units. "It's cash flowing very well now. It's not a value-add. It's a cash flow (acquisition)."
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