HOUSTON-Berkshire Group of Boston has managed to beat down multiple bids to gain ownership of the 688-unit Bayou Park Apartments. The new owner is mulling over plans for the 27-year-old complex, which came to market at a reported $55.5-million ask.
David Wylie, principal with Apartment Realty Advisors' Houston office, says Berkshire outbid 29 other players for the class B asset at 4400 Memorial Dr. because it offered the highest price, went hard with the earnest money almost immediately and boasted a strong investment track record. "Berkshire is as good a buyer as you can find. And, that gave the seller a tremendous amount of confidence in ability to close the deal," says Wylie, who represented a partnership between Venterra Realty Management Co. in Webster, TX and Lehman Brothers Inc. of New York City.
Wylie tells GlobeSt.com that the asset attracted apartment operators, investment companies and developers. As for Berkshire's future plans, Wylie says the company is considering the buy as a possible land play. Bayou Park is situated on 15.03 acres in the Memorial/River Oaks area, a submarket high on developer demand and short on land supply.
"They're going back and forth on whether they want to keep it as is, or redevelop it," Wylie says. "It hasn't been determined, to date, what they'll do. They liked it both ways."
Bayou Park Apartments is 96% occupied. The mix includes efficiencies and one- and two-bedroom apartments from 464 sf to 1,458 sf. The rents go from $675 to $1,415 per month.
In addition to Wylie, the ARA team included principals Matthew P. Rotan, David Mitchell and David K. Oelfke as well as the land team's vice presidents Tim Dosch and David Marshall. Berkshire Group was represented in-house.
Venterra and Lehman acquired Bayou Park Apartments in 2002 as part of a three-portfolio deal. The partnership sold the 1,006-unit Pavilion Place Apartments at 5401 Rampart St. on the west side almost immediately after the acquisition. ARA is marketing the last piece of the portfolio, the 696-unit Sandstone Apartments at 4201 Fairmont Pkwy. in Pasadena, TX.
"The partnership reached the end of its investment strategy," Wylie explains. "They had a pre-determined hold period on these assets. The hold came to an end so they're selling to reinvest."
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