The Los Angeles investment group was the highest of three offers on the table for Villa Garrett, an 85%-leased complex at 1919 Garrett Ave., John Barker, senior associate and national associate director in Dallas for Marcus & Millichap Real Estate Investment Brokerage Co., tells GlobeSt.com. "They're very good investors. They came in, did their due diligence, put up hard earnest money and closed it," he says. The deal, he adds, was done within 60 days, including landing a loan by Chicago-based LaSalle Bank. Steve Seiling with BMC Capital LP in Dallas arranged the package.
The local seller is liquidating assets to relocate to Colorado, according to Barker. The just-sold Villa Garrett, built in 1971, traded without any deferred maintenance, says the deal's lone broker. The submetered units are made up of 16 efficiencies in two floor plans, 220 sf and 340 sf; 32 one-bedrooms, ranging from 636 sf to 670 sf; and a pair of two-bedrooms, 800 sf. Rents go from $300 to $620 per month.
Barker says the upside is getting an asset with below-market rents and a 15% vacancy within two blocks of the Knox-Henderson district, a well-known local hub of eclectic retail and residential set in redeveloped historic structures. He estimates rents are at least five cents below market. Based on his calculations, the pro forma cap rate is 8.18%.
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