HOUSTON-In a direct deal with the lender, the Bascom Group LLC has stepped in to reposition a 454-unit, class B complex in a recovering pocket of North Houston. Sources believe the deed was handed off for $8 million to $10 million.
The value-add play focuses on burning off concessions, now at one month's free rent, and controlling expenses by improving operating efficiencies, Ryan Akins, regional director in Texas for the Irvine, CA-based investment group, tells GlobeSt.com. The just-bought Canfield Lakes Apartments at 13355 North Borough Dr. sits one mile south of Bascom's March acquisition, the 264-unit Huntington Green Apartments at 13100 Stonefield Dr.
Canfield Lakes was rehabbed in 2003 and foreclosed upon earlier this year by the Tustin, CA-based Fremont Investment & Loan. "A lot of the heavy lifting was done by the previous owner so we can focus on NOI growth without a lot of execution risk," explains Jerry Hess, the buyer's acquisitions analyst.
The 32-building Canfield Lakes sits on 15.63 acres: 1984 product with one-, two- and three-bedroom apartments and some townhouses. Units average 823 sf; rents average $560 per month.
"There are over 100 FEMA residents there and working through the transition process is one of the challenges of the property," Akins says. He says the potential for move-outs from the 91%-leased property is offset by job growth projections and strides that have been made to rebuild a neighborhood that fell on hard times in recent years.
Hess managed the closing and Bascom's Chad Sanderson in the headquarters office negotiated the financing. Scott Bryant with Live Oak Capital LLC in Houston arranged financing through Horsham, PA-based GMAC Commercial Mortgage.
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