HOUSTON-A San Francisco-based investment group has sold a 232-unit complex after a 1.5-year hold and nearly a $1-million renovation. The Related Cos. LP of New York City has paid close to $8.85 million for the class B asset.
The Arbor Court Apartments at 802 Seminar Dr., a 97%-leased HUD property, traded at a 6.9% cap rate. The deal went from offer to close in 65 days, according to Jeff Eisenhardt, senior adviser in Hendricks & Partners' Houston office.
"We had about 10 offers on it and ended up getting Related as the buyer," Eisenhardt says, adding it was marketed to a national client base as well as specialized HUD buyers. He tells GlobeSt.com that the Related Cos. had come out of an exchange and needed to close fairly quickly, which is why it got the nod to buy. "They bought it--signed, sealed and delivered," he adds. "This fit what they were looking for and requires no upgrades."
Eisenhardt says Arbor Court had deferred maintenance and management issues when the seller, Arbor Court LP, bought it in late 2005. The turnaround plan included new roofs and planks, re-doing the drainage system, landscaping and some interior upgrades. The seller also weeded out non-paying tenants and changed management as part of the value-add plan.
Situated on 9.44 acres, the 28-year-old complex has one- and two-bedroom units ranging from 583 sf to 896 sf. Rents are 78 cents per sf.
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