360-Unit Buy Launches Carroll's Texas Presence

PEARLAND, TX-Carroll Organization and Starwood Capital Group joined forces to make its first multifamily property buy in Texas. The joint venture closed this week on a commercial real estate deal with seller Davis Development, acquiring the 360-unit Carrington Place at Shadow Creek Ranch.

Though the class A asset at 12400 Shadow Creek Pkwy. was completed in 2010 and is stabilized at 97% occupancy, the Atlanta, GA-based Carroll Organization plans to upgrade flooring and countertops throughout the complex, and will renovate the clubhouse. A name change is also in the plans: The multifamily property will be rebranded as Carroll at Shadow Creek Ranch.

“We’ve managed in Texas for years, but this is our first acquisition in Houston and Texas,” explains Carroll Organization CEO Patrick Carroll.  “We’ll be closing on two other acquisitions in Houston within the next 60 days.” Carroll adds that his company is also eyeing a couple of prospects in Dallas, as well as a property in Atlanta and one in Tampa. In August, 2011, Carroll Organization closed on Carroll Co-Invest Fund I, geared toward acquiring class A and class B-plus multifamily properties in Texas and the southeast.

Carroll tells Globest.com that his sweet spot is 1995 construction or newer, with upside through cosmetic or management improvements. “We feel like we can push rents the most on newer properties,” he notes. To that end, Carroll relies on in-house management.

Carroll says his goal is to buy 3,500 units in Texas by year-end, believing that the Lone Star State is the ideal location for acquisition. The combination of high job growth and the energy industry are appealing, as is the fact that Texas is very much pro-business. He especially liked the location of his just-completed purchase because of its proximity to the Medical Center submarket. Because of the fundamentals, “90% of our 2012 acquisitions will be in Houston, Austin and Dallas,” Carroll says.