TIC Buyer Lands 367-Unit Prize for $43M Plus

IRVING, TX-SCI Real Estate Investments, staging a tenants-in-common play with the deal, has acquired the 367-unit Mandalay on the Lake from United Dominion Realty Trust Inc. Market sources say the trophy has delivered $123,500 per unit for the merchant builder.

According to an SEC filing, the Richmond, VA-based REIT had invested $32 million or $87,200 into the development, a 7.36-acre footprint fronting Lake Carolyn in the Las Colinas Urban Center. The complex at 692 Lake Carolyn Parkway, which delivered late last summer, was 74% leased at sale time.

"We did a direct marketing to highly qualified investors when it was not yet completely stabilized," Mark J. Stymiest, senior vice president in Dallas for CB Richard Ellis, tells GlobeSt.com. "We had multiple interest at the price level and three who were willing to take it." The ask was $49.7 million. And the marketing was to a select pool of TICs and institutional investors.

Stymiest says the deal carried short due diligence and quick-closing terms. SCI pulled it together in a 45-day start to finish, including financing. "The buyer did an outstanding job of getting it financed quickly," says Stymiest, who teamed with CBRE senior vice president William J. Baxter Jr. to orchestrate the sale. Wachovia Bank provided acquisition capital.

Sources say the Mandalay, crossing the closing table at year's end, confirmed that it was one of the highest prices paid last year for a Las Colinas multifamily asset, where class A sales have been "all over the board." If the street's right about the $45.3 million, the Mandalay's price was third: right behind Hanover Co.'s 341-unit Lofts at Las Colinas along O'Connor Boulevard and Lincoln Property Co.'s 409-unit Lincoln at La Villita along Deseo Drive.

The apartments average 971 sf. The average monthly is $1,234. And the now 83%-leased asset features all the bells and whistles that go along with the property type, including a clubhouse with a coffee bar and conference room with video capabilities. Stymiest says nearly 65% of the units front the lake or have views of it.

In the past year, Los Angeles-based SCI has added more than $200 million of Texas assets to the portfolio. "Mandalay on the Lake is positioned to benefit from Irving's anticipated growth of more than 23.4% over the next five years," says Scott Derrick, SCI's chief acquisitions officer, citing the influence from its proximity to Dallas/Fort Worth International Airport. He and SCI's COO Andrew Van Tuyle brokered the buy side.