DUNCANVILLE, TX-A conglomeration of California companies, employing tenants-in-common power, has acquired the 144-unit Merrill Square Apartments. Local sources say it took slightly more than $3 million to win the Southwest Dallas deed.
The buyer of record, Dynasty Deed Services Inc., led by Gene Lim of Monterrey Park, CA, was one of five offers for the 18-building vintage development at 400 N. Merrill Ave. "They bought it as a coupon deal," says Peter Hartnett, senior investment adviser in Dallas for Phoenix-based Hendricks & Partners. "It's a nice solid property at a decent price." Merrill Square was on the market for $3.6 million.
Hartnett tells GlobeSt.com that the deal almost cratered because a lender pulled the plug on the financing on the eve of the closing. Steve Whitehead, senior vice president with Minneapolis-based NorthMarq Capital Inc.'s Dallas team, "picked up the ball and got the thing done in 4.5 weeks," Hartnett says. "He rescued a sinking ship." Seller TriPro Services of Dallas, lead player in Merrill Square LP, paid off an existing loan, allowing the buyer to pick up financing from New York City-based Lehman Bros., according to Hartnett.
Hartnett says the 95%-leased Merrill Square, situated on 2.2 acres near the Interstate 20-Main Street junction, was turned over to Henry S. Miller Property Management Group to oversee, with the long-time on-site manager becoming part of the new team. The two-story buildings, developed in 1974, contain 16 efficiencies, 96 one-bedroom and 32 two-bedroom units that average 750 sf. The average rent is $497 per month or $54 below the submarket's average for apartments of its vintage.
"In the buyers' eyes, it has potential as the market continues to improve," says the deal's sole broker, who marked his seventh closing this year and another 28 to go in the class C queue. Hartnett says the new owners will be following the submarket's lead, which is expected to produce a 1.3% uptick in rents before the year ends.
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