Top TIC Buyer Comes to Dallas for $41M Amli Acquisition

The just-traded asset is the former Amli at Bent Tree, renamed to Bellagio at Bent Tree. The North Dallas complex at 3901-30 Accent Dr. was "a little bit difficult" to sell to exchange investors despite its quality and location because of the city's overall market conditions, Marc Paul, president of SCI Real Estate, tells GlobeSt.com. "But," he adds, "Dallas is coming around and we feel it's a good time to buy."

Paul says the initial equity came from 23 exchange investors, each putting in a minimum of $250,000, and $8 million from SCI. Before the post-closing curtain falls, he says SCI will keep a percentage as it always does and sell the balance of its equity claim to 12 more investors to get a full pool.

Paul says SCI was up against five potential buyers, but came out on top with the highest price on the table. The first deed definitely will lead to others. "We like to put a footprint down and then put a lot of footprints down around it," he says. SCI's 2005 plan is to acquire $600 million in the US. He estimates another $60 million could be spent in Dallas/Fort Worth.

To acquire the Bellagio, the TIC buyer secured 10-year loan for nearly $27.5 million at a 5.32% fixed-rate interest from Wachovia Bank. The financing was closed with a 66.98% loan-to-cost ratio, according to SCI's investment summary.

The Bellagio, selling at a 6.36% cap rate, brought $82,033 per door. The 23.8-acre, gated complex has 29 residential buildings in a resort-style setting. Units range from 667 sf for a one-bedroom to 1,359 sf for three bedrooms. Monthly rents run from $773 to $1,485.

Paul says the upside will come from a planned hold of five to 10 years and a concession burn-off. He says the 93%-leased asset has a 17% vacancy when concessions are factored into the return. The Dallas regional office for Phoenix-headquartered Alliance Residential Co. has been hired to manage the complex.

SCI's 40-property portfolio, valued at $700 million, is 70% retail properties and the balance as class A multifamily product for a US-funded pool of exchange buyers. Paul says SCI buys only infill multifamily properties with a history of high occupancy. "We are in asset preservation," he stresses, "not asset accumulation."

The Bellagio's quality and occupancy track record were the reasons SCI pushed the ante to win the deed, according to Paul. The holding was built in phases in 1996 and 2000, positioned inside the George Bush Turnpike and just west of the Dallas North Tollway. Mark Stymiest with CB Richard Ellis Inc. in Dallas brokered the sale for the Chicago-based Amli.