The 70%-leased Greenwood Apartments, positioned on 2.2 acres at 716 N. Plymouth Rd., passed from a Dallas couple to a private investor from Concord, CA, who plans to immediately put his construction company to work on repairing the 41-year-old development, John Barker, senior associate in Dallas for Marcus & Millichap Real Estate Investment Brokerage Co., tells GlobeSt.com. "This is strictly a value-add deal," he says. "There is some work to be done."
The buyer, who also owns a similar-size complex in Richardson, closed the takeover with a 70% loan-to-value financing with a three-year term at a 7.25% fixed-rate interest from Imperial Bank in Burbank, CA, says David Eberstein with Marcus & Millichap Capital Corp. who arranged the package. The seller also staked the buyer to a loan for 15% of the purchase price, he says.
"This was a very difficult deal," Eberstein says about the financing. "We knew right off that we only had a couple options."
Barker, who teamed with the brokerage house's Al Silva, says the buyer wasn't necessarily the highest of the bids put on the table, but did offer the best terms in the lot. The deal closed at an 8.55% cap rate with a pro forma return of 11.87%.
Greenwood Apartments has 41 one-bedroom with 750 sf and 19 two-bedroom units with 950 sf. Rents are $550 and $650 per month. According to Barker, the new owner will lease and manage the property.
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