2,712-Unit REO Listing To Hit Market

Brickhaven Apartments at 8900 Fondren Rd. was recently unveiled by Trimont Real Estate Advisors of Atlanta. The asset, developed by renowned builder Harold Farb, was once known as St. Charles Apartments, but was renamed in late 2008 when the lender foreclosed on the asset.

The Sunbelt portfolio consists of nine class B assets in Houston and one in West Palm Beach, FL. In the case of this portfolio, however, the lender elected not to foreclose on the assets. Instead, the US bankruptcy court appointed Byron Plant with Asset Plus Cos. in Houston as a special receiver.

David Wylie with Apartment Realty Advisors' Houston office says the Sunbelt Portfolio consists of assets with good bones and in good locations. Occupancy is in the mid-80s. The portfolio's average age is close to 30 years old.

"Most of the REO out there these days is in difficult shape," notes Wylie, who has marketing assignments for the Sunbelt Portfolio and Brickhaven Apartments. "Because all of these were renovated and worked on, they don't have a lot of the issues that some other REOs might have." Another appeal to the portfolio, he adds, is the lender's willingness to modify the loan.

The situation is a little different for Brickhaven Apartments, which was built in the 1970s. Wylie tells GlobeSt.com the former owner of the 52%-occupied vintage complex was under capitalized and unable to maintain debt on the property. "It's a slippery slope when that happens," Wylie explains. "You can't keep the right profile in the rent, when the wrong profile moves in, the good seeds move out, the bad seeds start skipping." He remarks that 300 units in Brickhaven Apartments need to be turned, and Greystar is currently in place, trying to clean things up.

On the bright side, however, "half the property has new roofs and the rest of the roofs are in good shape," Wylie says. "All that's really needed are cosmetics and minor upgrades, and then turning 300 units."

With Brickhaven on the market now, Wylie says he's looking for final offers by August 12, and anticipates bids could be in the $20,000 per unit range. The Sunbelt Portfolio, meanwhile, will debut in early August. "I haven't said a final offer date, but I'd anticipate mid-September," says Wylie, who is teaming with ARA's Boca Rotan, FL office to market the collection.

Wylie says he's happy to entertain one-off bids or a buyer who wants the entire collection. And those buyers will be out there, wanting the real estate. Wylie says, interested buyers can expect to see more of these types of distressed assets being brought to the market to either be offered out of foreclosure or receivership.

"Everyone, every broker and every lender, is being overwhelmed with calls from buyers wanting distressed assets," Wylie comments. "Some of these are institutional with special funds for distressed properties set up. Others are mom and pops looking for a bargain. But they're out there."

In Houston, the Sunbelt Portfolio consists of the 121-unit Beacon Hill at 8110 Creekbend; the 235-unit Broadmeat at 2801 Broadmead; the 111-unit Carrington Court at 7900 Westheimer; the 86-unit Chalfonte at 1715 Enclave Pkwy. and the 190-unit Somerset Place at 5757 Guhn. Suburban offerings consist of the 220-unit Avalon Bay at 925 Northwood in Baytown; the 152-unit Deerbrook Forest at 11750 Highway 59 North in Humble; the 232-unit Harbour at 4040 Crow Rd. in Beaumont and the 275-unit Place at Green Trails, 1111 Houghton in Katy. The lone Florida complex is the 316-unit Cascades at 1400 Village Blvd. in West Palm Beach.