Unrelated Trio of Sales Yields About $59M

DALLAS-A trio of multifamily investors, spending roughly $59 million, has gained control of 1,210 units in Dallas/Fort Worth in unrelated, back-to-back deals with one common thread: a high-enough occupancy to warrant rent hikes in the near term.

The class A and B sales reflect the same set of dynamics that class C brokers reported just a week ago. In an eight-day round of dealmaking, Brian O'Boyle with Apartment Realty Advisors in Dallas sold the 148-unit Mapleshade Apartments at 6606 Mapleshade Lane and 446-unit Camden Oaks, now Ashwood Park Apartments, at 7650 McCallum Blvd., both in Dallas, and 616-unit Sutter Creek at 2216 Plum Lane in Arlington. The triple play was part of a round that included a GlobeSt.com previously reported sale to the Irvine, CA-based Bascom Group LLC.

"With the strong occupancies, I think the property owners are poised to be able to increase the rents," O'Boyle tells GlobeSt.com. The class A Mapleshade rents for 97 cents per sf. The class B properties--Ashwood and Sutter Creek--go for 77 cents per sf and 80 cents per sf, respectively. And none of the properties are shouldering concessions, O'Boyle says.

The 10-year-old Mapleshade was sold off-market by its developer, Pardue Investments of Dallas, to a first-time metroplex buyer that's only being identified as a tenant-in-common group from Irvine, CA. The O'Boyle camp says the price was determined by the market. The 9.9-acre development, assessed at $11.5 million, contains one- and two-bedroom units, averaging 1,236 sf, with attached garages. O'Boyle says the 95%-leased complex is a prime condo candidate "down the road."

The 96%-leased Ashwood, with units averaging 730 sf, was sold by Houston-based Camden Property Trust to an Indianapolis-based company with other multifamily holdings in the region. The 21-year-old complex was marketed at $21 million. Dallas County has the 7.74-acre complex assessed at $6.5 million.

With units averaging 725 sf, the 96%-leased Sutter Creek was sold by Venterra Realty Co. of Houston to a Los Angeles-based buyer, who also owns other multifamily properties in North Texas. Venterra was seeking $24.5 million for the 11.3-acre holding. The 22-year-old complex is assessed at $11.88 million by Tarrant County.

O'Boyle says each class B listing drew offers from at least 20 investors, another market trend these days. He says class B units are selling for $45,000 to $70,000 apiece as a result of the hefty bidding.

"There's a tremendous amount of capital out there," O'Boyle says. "The common thread is every investor perceives there is significant upside in the Dallas/Fort Worth market. And investors perceive there's significant upside in the rents."

At the second-quarter close, the average rent of $700 per month had gone up just 0.7% in the past year, according to M/PF YieldStar of Carrollton, TX. As a result, investors near and far are starting to bet on the come because job growth is rising and so is the spread between rents and mortgages.

Since January, O'Boyle has sold 30 properties mostly in Dallas, ringing up $625 million for the exchanges. "It's going to be a record-breaking year for the market as well as ARA in Dallas," he predicts, adding his office is on track to close $1.2 billion of deals before the calendar flips.