Exchange Buyer Gets First Texas Deed

DALLAS-Another 104 vintage units have changed hands in the Bachman Lake neighborhood, where new rooftops and retail have sparked a revitalization that's allowed long-time commercial owners to harvest some reward. The latest to trade, the Westwood Apartments, went at a 7.6% cap rate.

"It's a straight-up cash flow apartment deal," says Will Jarnigan with Marcus & Millichap Real Estate Investment Brokerage Co. in Dallas. He and group leader, John Barker, matched the $2.6-million buyer, Mercer Properties of Los Angeles, to the deal for the 90%-leased complex at 2631 Bachman Dr. A local firm, Multifamily Brokerage Group, had the vintage property on the market for $2.8 million for the seven-year owner, United Kendias Corp. from Flower Mound, TX.

"We brought in the only credible offer they had," Barker says. He tells GlobeSt.com that the buyer teamed exchange funds from a multifamily asset sale in Los Angeles and a 10-year loan from the Chicago-based LaSalle Bank to make the close. The financing, representing a 75% loan-to-value ratio, has a 6.05% fixed-rate interest and 30-year amortization.

Barker says the 42-year-old complex sits in a pocket with a six-month sales record pushing 1,000 apartments. Mercer's new holding is within three blocks of a new shopping center. "He sees opportunity with the redevelopment in the area. He's selling several properties in California and is going to be looking at similar deals in the area," Barker says. "He'll be placing significant capital here in the next year."

As for the Westwood acquisition, Mercer Properties, a first-time Texas buyer, is picking up the reins without any deferred maintenance as part of the hand-off, according to the brokers. The mix has a quartet of efficiencies along with one-, two- and three-bedroom units. Apartments average 768 sf; rents bring in 85 cents per sf.