"The buyers were trying to move equity out here from California to get more for their dollar in terms of cash flow," Jeff Eisenhardt, senior adviser in Hendricks and Partners' Houston office says about the decision to acquire the 38-year-old complex at 3201 Garth Rd. from a Greater Houston limited partnership.
Eisenhardt explains the complex, which stood at 5% vacancy, was on the market only a matter of weeks before going under contract to the buyers. "We had three offers during the first three weeks of marketing," he tells GlobeSt.com. "But the buyers were very serious and they wanted to lock it up so they put up the best offer." He partnered with Kevin McCarthy, also a senior adviser with Hendricks & Partners, to represent the seller of record, Wolverine Tanglewood LP from nearby Katy.
Eisenhardt says it was a fairly simple matter to get the listing under contract, but finding financing was not. "It was a big purchase for the buyers, who didn't have much history running properties in Houston," Eisenhardt says. Plus, he says the complex suffered from a history of weak collections although its owner kept it in excellent shape. Michael Thompson in BMC Capital LP's Houston office arranged a 75% loan-to-value financing with a 5% holdback.
Eisenhardt says that, with the deal, the seller correctly read and took advantage of an active market. "I negotiated the sale for them in 1999 when they bought this for $13,125 a unit," he says. "Now they just sold it for $24,554 a unit. That's not too bad."Tanglewood Square has one-, two- and three-bedroom apartments, measuring 645 sf to 1,400 sf. Its monthly rents are $345 to $595.
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