$10M Packages Repositioning Play for 244-Unit Foreclosure

"It was a coup," Christopher A. Thomson, Brama Ventures' partner, tells GlobeSt.com. "It's a jewel in the rough." The 22-year-old complex, with an 83% occupancy, is located at 1913 Estrada Pkwy. in Irving, close to the DFW International Airport and a stone's throw from the George Bush Toll Road. Blue Valley Apartments Inc. of Orlando was the special servicing agent for the near $8.2-million sale by Fannie Mae.

Thomson says the $1.5-million balance of the investment will go toward a full-body makeover, including a new skin and roofs on the 29-building development. Other changes will replace idle tennis courts with a $50,000 playground plus add carports and upgrade the clubhouse and pool. "When it's done, it will be a B-plus and will compete with class A," he says. "Then, we're going to get the traffic that it deserves."

Oak Hill Apartments is a mix of 120 one-bedroom units with 731 sf; 64 two-bedroom designs with 966 sf; and 60 three-bedroom townhouses with fireplaces in a 1,176-sf layout. Monthly rents run $605, $770 and $880 plus utilities. "We are just banking on the concessions burning off," Thomson says. "We really aren't going to plan on a rent hike." At least one month of free rent has been part of the sign-up plan. Brama affiliate, Alpha-Barnes Real Estate Services Co., will oversee the 10.6-acre complex.

Thomson says Brama Ventures leveraged the Oak Hill buy with 85% loan-to-value financing with a 10-year term and 5.78% fixed-rate interest through its life insurance debt and equity partner. Brama wasn't the highest offer on the table, Thomson says, "but we're earning a reputation that we do what we say and that goes a long way." Dirk Goris with CB Richard Ellis Inc. in Dallas brokered the sale.

Brama Ventures' 2005 plan is to venture into the class A market in all four of Texas' metropolitan areas after buying 1,600 units in its first operating year. Right now, the firm's under contract to buy 700 class A units in Houston, according to Thomson, who stresses that the upgrade in strategy doesn't mean the partners are turning their backs on value-adds. "That's our bread and butter," he says.