GE-Backed JV Puts $55M to Work for 690 Units

CARROLLTON, TX-GE Real Estate North America Equity and BH Equities LLC have spent $50.4 million to acquire the 690-unit Autumn Chase Apartments in a value-add play underwritten by a $4.4-million overhaul. With occupancy hovering 90%, a one-year renovation flew into motion on the open units as soon as the deal closed.

The 48-building complex, developed in three phases from 1987 to 1997, sits on 66 acres at 4600, 4636 and 4700 N. Josey Lane. The AMLI-developed property is the second one in Dallas/Fort Worth that GE has bought with the Des Moines-based BH Equities. Autumn Chase was sold by Price Realty from nearby Addison, which acquired it from Chicago-based AMLI Residential Properties Trust in June 2001.

Chris Overberg, regional manager in Dallas for the GE equity division, tells GlobeSt.com that the class B multifamily block has been positioned as a five-year hold. The upside bet lies in the market's continually improving fundamentals and renovation. He says the JV inked the deal with 75% loan-to-value financing--a 10-year term and sub-6% fixed-rate interest.

Overberg says concessions are minimal and quickly burning off at the complex, a one-, two- and three-bedroom mix averaging 867 sf. The average monthly rent is $810. The value-add plan, he says, is expected to bump rents 7% to 10%. "We will move rents and move them along with what we believe is a strong submarket in a strong MSA," he says.

The renovation goal is to bump the class B ranking to a class A minus. Units will get new kitchens, bathrooms and appliances. The exterior makeover will include upgrading all three swimming pools, updating the clubhouse and fitness center and adding a business center.

Last year, GE and BH bought AMLI on the Green, now Club at Fossil Creek, at 3400 Western Center Blvd. in Fort Worth. Then, as now, BH Equities will manage the asset and oversee the renovation. "Our joint ventures are built around relationships and ongoing relationships," Overberg says. "Clearly, we're looking at more deals with them."

Overberg's Central region last year deployed $1.5 billion into acquisitions of all product types, but 60% wound up in the multifamily market. "We are on target to hopefully exceed that," Overberg says, citing a first-quarter run that netted eight multifamily properties for more than $100 million.