HOUSTON-Two years after it acquired the 437-unit Estates at Memorial Heights, the Pauls Corp. in Aurora, CO has sold the four-year-old complex to CH Realty/Acquisitions IV LLC. The buyer, a fund of Crow Holdings in Dallas, isn't saying how much it paid, but comparable properties in the area are commanding $100,000 to $200,000 per unit at closing tables.
The Pauls Corp. had acquired the complex at 616 Memorial Heights Dr. from Amstar Group Ltd. in February 2004. "The buyer at the time was doing a venture with GE Capital and both are IRR-motivated," says Craig LaFollette, executive vice president with CB Richard Ellis' Houston office, who represented the seller. "In their estimation, the quicker you can get out of a deal, the better off you are. This was a short-term hold to start with."
LaFollette tells GlobeSt.com that the 92%-leased class A Estates was Pauls Corp.'s sole asset in Houston. "I think right now they're concentrating on other markets," he says. "They're working hard in Seattle."
LaFollette says the six-week marketing generated offers from pension funds and private capital entities for the asset, which Harris County assesses at $39.4 million. Crow Holdings ended up with the deed due to its track record for closings. "It's a pleasure dealing with them," LaFollette adds.
LaFollette says he wasn't surprised at the interest received on the complex, which will be kept as a rental. Multifamily properties offered for sale inside the loop are hot commodities these days and attract a lot of attention from investment circles. "Their cost of entry into that market with that asset was less than what it would cost to reproduce it today," LaFollette adds. "Reproduction costs inside the loop range between $140,000 and $150,000 per unit. If you can find that deal at a much lower cost in a great location, you'll have the advantage in the marketplace."
The Estates at Memorial Heights has one- and two-bedroom units ranging from 769 sf to 1,236 sf. Monthly rents start at $1,079 per month and go up to $1,578 per month.
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