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MESQUITE, TX-A Grubb & Ellis Co. team has hawked two class A complexes within five days in a Dallas suburb, affirming high-rollers’ unwavering interest in the region’s high-spirited market.

Don Ostroff and Will Balthrope, both vices presidents of the Dallas investment group, snagged the back-to-back coup with unrelated buyers for two of Mesquite’s four new complexes built in 1999 and 2000. The final sales prices fell within 95% to 98% of the asking prices, Ostroff tells GlobeSt.com. The 295-unit Echelon at Mission Ranch carried a $21.3-million price tag and the 256-unit Enclave at Beltline, a $16.8-million asking price. The Echelon has gone to an East Coast private investment group while the Enclave is now in the portfolio of a West Coast investor. The properties are located within two blocks of each other near the LBJ Freeway and US Highway 80.

The Enclave, 98% occupied at sale time, changed hands in a 1031 tax-free exchange. It went on the market in late fall 2000 and has been under contract for six months. According to Ostroff, the closing was stymied because brokers were dealing with a HUD-insured assumption loan. A joint venture of Barrow-Health Investments of Longview, TX and Ricky Gillingwater of Dallas, is the seller of record.

The 95%-occupied Echelon, on the other hand, was never on the market. Ostroff says his past dealing with Echelon Residential, based in Tampa, led to that sales contract.

The deals were sweet to close, but what they say about the DFW multifamily market is equally as savory. In the past six months, cap rates have dropped 25 to 50 basis points and igniting DFW’s multifamily sector. As a result, Ostroff says “private institutional REITs and all other buyers have descended on Dallas. That’s what’s up. Everybody wants to buy in Dallas.” It really boils down to demographics, he says–110,000 new jobs in 2000, 4% to 5% multifamily rent growth; same store growth of 3.9%; and constricting new supply. He says 20 to 30 offers are put up for every quality product coming to market.

The Ostroff-Balthrope team has secured class A listings in Dallas, San Antonio and Austin. The Mesquite buys represented Texas entries for the East Coast and West Coast investors. The Texas market is so appealing, in fact, that another West Coast investment group already has closed on the class A Walnut Creek Apartments in Austin. Both groups, confides Ostroff, are looking to buy some more.

The climate is such that a high-end sale in June wrought more than the asking price. Ostroff won’t say which sale that was, but stressed that it represented a significant affirmation of the DFW multifamily market’s standing nationwide. The near back-to-back Mesquite sales came roughly a month after Ostroff and Balthrope sealed a deal with a Canadian investor for the Astoria Apartments along Spring Valley Road in Dallas.

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