The just-closed Broadway Square Apartments will undergo a $2.5-million renovation. Work will begin in two months on the 182-building complex and take 1.5 years to complete, according to Jack R. Ehrman, Post's acquisitions director. The lion's share of the tab will be used to replace 90% of the roofs.
Although similar properties typically trade for roughly $32,000 per door, the deal between Post Investment and locally based Farb Investments Broadway, which was brokered by a CB Richard Ellis team in Houston, Ehrman says Broadway Square traded for well below the average. He says the purchase of 8751 Broadway Blvd. is attractive because of its upside, which will come by increasing occupancy rather than being based on a post-renovation rent hike.
Situated on 69 acres, the 86%-occuppied complex has one- and two-bedroom apartments from 504 sf to 1,206 sf. The monthly in-place rents are $465 to $800.
"The property in this submarket had been at 93% occupancy during Katrina and we're looking to stabilize it at 90%," Ehrman tells GlobeSt.com. Pinnacle Property Management of Torrance, CA has been hired to manage and lease the asset. "Pinnacle has a lot of good experience with assets of this size and in this location," Ehrman says.
In December 2007, Post Investment acquired the 286-unit Whispering Winds Apartments at 2902 Whispering Winds Dr. in Pearland. The company's president Jason Post says he wants a stronger presence in Houston because of the area's demographics and economy. Desirable properties are class B and class B-minus complexes in good locations with good upside either from reduced expenses or increased occupancies or both. "We're moving toward the Dallas and Austin areas too so we don't have an accumulation of assets in only one market," Post adds.
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