The first mission for the new owner, Victory Development Co. of Canton, is "to spruce it up and get the reputation out of the tax-credit arena," Jeff Dowdle with Marcus & Millichap Real Estate Investment Brokerage Co. in Dallas tells GlobeSt.com. The 4531 Point Blvd. complex was 88% occupied when Whitney Capital Corp. handed off the deed to the mix of one- and two-bedroom units.
Dowdle and Robert Sheppard in Marcus & Millichap's Seattle office had Hubbard's Ridge on the market 45 days. Victory Development, using in-house negotiators, outmaneuvered five competitors in a best and final because it had placed "nonrefundable earnest money on it right off the bat," Dowdle says. The heated chase, he adds, is tied to the 6.5-acre complex's location, which is about 100 yards from a new Bass Pro store and rent upside.
According to the broker, Hubbard's Ridge rents are running eight to 10 cents per sf below its neighbors. "There is definite upside," Dowdle stresses. The 164 one-bedroom units, ranging from 657 sf to 783 sf, are bringing $495 to $535 per month and the 32 two-bedroom apartments, with 1,145 sf to 1,167 sf, are collecting $730 to $755 per month. Based on the ask, the deal had a 10.3% cap rate.
Dowdle says the new owner teamed 1031 exchange funds from a North Texas sale and assumed a $4.4-million Fannie Mae loan serviced by Cleveland-based KeyBank Corp. to make the close. The loan expires in January 2012.
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