DENTON, TX-Taking its first deed in North Texas, a tenants-in-common group from Salt Lake City has forked over more than the $11.5-million ask for the 279-unit Ramsgate Apartments. The multifamily property is nearly 90% leased to University of North Texas students.
All that the broker can say about the selling price for the 1407 Bernard St. holding is it "was considerably above the list." The TIC buyer was the highest of "eight to 10 qualified offers" in a 30-day marketing for the 98%-leased Ramsgate, according to William C. Jarnagin, a Dallas associate for Marcus & Millichap Real Estate Investment Brokerage Co. He and senior associate John Barker were in charge of the sale for Eagle Village Inns Ltd. of Manhattan, KS. Jarnagin says the new owner's plan is to run Ramsgate as-is with ConAm Management Corp. of Plano hired to lease and manage it.
Jarnagin tells GlobeSt.com that the five-year owner inked a loan defeasance to clear the way for a free-and-clear sale after taking it to market in 2005 and then opting to pull it to sweeten the sale prospects. Kirk Slimmer with TransLending Corp. of Denver arranged a loan of roughly $10 million through New York City-based Lehman Bros. Jarnagin says the five-year vehicle had a 6.3% fixed-rate interest and 30-year amortization.
"The student housing aspect was a little bit to overcome with the lender, but the buyer showed a very high degree of expertise and underwriting," Jarnagin says. The deal carried a 7.91% cap rate and a 9.11% pro forma based on the list price and income projections, respectively.
Ramsgate is situated a half-mile from the university and along a bus route. "Where this property is positioned and the way they've kept it up, it will keep students coming in for a long time," Jarnagin says, adding the immediate cash flow drove the heated race, but it's also laced with upside in its rent base.
Built in 1984, the 31-building Ramsgate, situated on a 9.4-acre tract, has efficiencies, one-, two- and three-bedroom units, ranging from 440 sf to 1,228 sf. The monthly rents are $469 to $1,090.
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