CORPUS CHRISTI, TX-Making its fourth foray in Texas, a Southern California real estate company brought the 783-unit Paradise Bay Apartments into its fold, paying $23.5 million for the asset. The new owner will hold the class B Paradise Bay Apartments for five years, and plans a $2-million capital infusion for upgrades.
According to Jack Ehrman, director of acquisitions with Post Investment Group LLC, the complex at 5901 Weber Rd. was an attractive investment because of a walk-in capitalization rate of 8.5%. Additionally, Post Investment was impressed with the relatively stable market, which helped prompt the complex's buy from Houston-based Paradise Bay Apartments LP.
Paradise Bay was built in two phases between 1973 and 1980, and Ehrman tells GlobeSt.com that the acquisition is part of Post Investment's state-wide push. "We're looking at new deals in Texas now, and have significant properties in the pipeline," he says.
The Los Angeles company's goal is to have $100 million in multifamily properties nationwide by the end of the year, with 80% of activity targeted for Texas. With the Paradise Bay acquisition, Post Investment has acquired 1,730 units in Texas since October 2006. Ehrman says the other three assets are in Dallas. The Paradise Bay acquisition is Post Investment's first in South Texas.
Paradise Bay has a mix of efficiencies, along with one-, two- and three-bedroom units. Sizes range from 500 sf for an efficiency to 1,200 sf for a three-bedroom, two-bathroom unit. Market rents are between $475 and $1,100 per month.
Chip Nash from Hendricks & Partners' Houston office represented the seller. Post Investment had in-house representation. Debt financing to the tune of $21.5 million was handled through Credit Suisse Inc. of New York City, with the remainder coming from private equity sources.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.