Mission Center Road LLC, led by LEV Investment Inc. of Sherman Oaks, CA, came in with 40% down for the class C Willows Apartments at 3304 Willow Creek Dr. in Irving and a 1031 exchange deadline for closing the deal, Peter J. Hartnett with the Dallas office of Phoenix-based Hendricks & Partners tells GlobeSt.com. "We had to get real creative toward the end to close it," he says. "They stood to lose $300,000 if it didn't close."
Hartnett says LEV, reinvesting gain from a multifamily property sale in California, was one of four offers in just two days of marketing for the 70%-leased complex that was foreclosed upon last year. "The property had incredible value-add opportunity," he says. "I wouldn't say there's upside in rent, but there's definitely upside in the vacancy." The new owner has brought in Encore Management Co. of Dallas to lease and oversee the 3.8-acre asset, which has 224 one-bedroom units averaging 546 sf and a pair of two- and three-bedroom apartments, each 1,082 sf. Rents average $512 per month.
According to Hartnett, LEV financed the deal through Citibank, getting a package with a 60% loan-to-value ratio. The transaction closed at 96% of the ask, he adds. "I underwrite properties so I can price them aggressively," he stresses, "but there has to be validity behind the numbers or an excellent value-add opportunity." The Willows, under the Miami-based Lennar's watch, underwent a $600,000 renovation, which included a $200,000 HVAC system. Jan Blanchard of Blanchard Property Co. in Dallas represented the buyer.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.