DALLAS-The Bascom Group, staying a course to spend $200 million this year in Texas, has hit a triple play for 865 units in the Dallas/Fort Worth and Houston areas. Sources say the class B properties rolled into the portfolio for roughly $20 million.
The Irvine, CA-based Bascom's Texas team won't confirm the price, but did indicate that the trio held true to the MO for value-add acquisitions in cost and repositioning merit. "These three are definitely a higher class property so that shows our flexibility to buy anything from a foreclosure to a more stabilized asset if the upside exists," Ryan Akins, Bascom's regional director in Texas, tells GlobeSt.com.
In simultaneous closings yesterday, Bascom bought the 400-unit Waterford at Clear Lake at 801 E. NASA Rd. in Clear Lake, 264-unit Huntington Green Apartments at 13100 Stonefield Dr. in Houston and 201-unit Oak Creek Apartments at 1800 Oak Creek Lane in Bedford. The Hayman Co. of Troy, MI sold Huntington Green and Oak Creek while Crimi Mae turned over the Waterford's deed on the heels of a foreclosure, according to Akins.
Bascom, with the Washington, DC-based Carlyle Group as its equity partner, closed with 30-day due diligences. George Smith Partners of Los Angeles arranged the financing through the Horsham, PA-headquartered GMAC Mortgage Corp. Akins says Bascom has allocated $4 million to $5.4 million for renovations, which will begin in the coming months and take up to 18 months to complete.
The Waterford, built in 1983, on 23 acres is a 76%-leased mix of one- and two-bedroom apartments averaging 787 sf. The average rent is $598 per month. Greystar Management Co. of Houston will oversee the 30-building, gated development, which is being primed for $5,000 to $7,000 per unit in upgrades. "It's a highly distressed property with significant deferred maintenance," Akins says.
The 83%-leased Huntington Green, built in 1984 on 9.5 acres, has one- and two-bedroom units averaging 812 sf. Its monthly rent average is $573. The 23-building, gated complex will be managed by Greystone Management Co., also from Houston. Akins, eyeing upside from lease-up and concession burn-off, says the JV owners will spend $5,000 to $6,000 per door on upgrades to build in additional leverage for a rent hike in a development with 69% of mix consisting of one-bedroom townhouses and two-bedroom apartments.
Oak Creek, also built in 1983, was 94% occupied at sale time. The 23-building complex, positioned on 9.8 acres, will get $3,000 to $5,000 per door spent on its changes, according to Akins. The one- and two-bedroom apartments average 957 sf; average rent is $637 per month. "The goal is to compete with some vintage properties of the same age with higher rents," he explains, adding the plan includes burning off concessions for additional upside. Encore Management Co. of Dallas was put in place at Oak Creek.
Cushman & Wakefield of Texas Inc.'s senior directors Don Ostroff and Will Balthrope sold Oak Creek for Hayman while CB Richard Ellis Inc.'s Todd Marix, part of a nine-member team in the Houston office, brokered the Huntington Green sale. The acquisition from Crimi Mae was a direct deal. Chad Sanderson, Bascom's business development director, managed the closing processes.
In the past seven months, Bascom has acquired 2,872 units in its bid to quickly build a Texas portfolio--and 2,000 more apartments are under contract. "We're off to a strong start," says Jerry Hess, acquisitions analyst in Texas, "and we hope to carry this positive momentum through 2006."
© 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.