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LEAGUE CITY, TX-After screening a field of more than 70 possible buys, CA-based Drever REO Fund LLC has settled on The Moorings, a two-year-old, 201-unit apartment complex on the south shore of Clear Lake in League City, TX.

Tiburon, CA-based Concierge Asset Management is the sponsor of the Drever private real estate investment fund. Paul Odland, president of Concierge Asset Management, tells GlobeSt.com that the purchase fits his MO of purchasing properties that are either distressed or located in overbuilt markets. The Clear Lake-League City area currently is experiencing some problems due to overbuilding. Odland also cites its location to major employers as another important factor in the sale. One of the biggest names, Chicago-based Boeing Co., is relocating 932 employees from Southern California to the area.

Odland looked at over 70 complexes in the Houston area and zeroed in on the Cape Cod-style Moorings because it was a particularly great buy and developed by the Hanover Co., a group he terms as one of the best builders in Texas. “Usually, we have to revitalize and re-energize the entire apartment community. But Hanover carefully built and meticulously maintained The Moorings, so we’re buying a virtually new property in a prime area, 35 minutes from Houston’s central business district,” Odland says.Hanover, with equity partner Mitsubishi Corp., are the sellers. Odland says the complex was sold because Mitsubishi wanted to get out of the project.

Though none of the parties disclosed the sales price, the price was reportedly below today’s replacement costs. Part of the purchase was financed through a $9.6-million loan from Credit Suisse First Boston.

Odland said Concierge was able to complete due diligence and loan closing on the property in 30 days. “We have lenders we can count on. Here we utilized our long, existing relationship with Credit Suisse First Boston,” he says of the deal. “In March, we closed an $8.8 million loan with them for the 291-unit Mallard Creek Apartments in Kingwood, TX in just three business days.”

Todd Stewart, senior vice president of CB Richard Ellis, who worked on the deal, says “lenders don’t normally make loans that fast. But they know Drever’s due diligence on an apartment complex is probably the deepest and best in the industry, that Drever always puts more of its own money into an acquisition, and borrows less, reducing the leverageand often the risk.” He says Maxwell Drever personally put $5 million into the fund. “That always makes a lender feel comfortable,” Stewart adds.

The complex is located on 9.2 acres and features 153 one-bedroom, one-bath units and 48 two-bedroom, two-bath units with nine-foot ceilings and crown moulding. Odland said Concierge’s value enhancement team will upgrade the leasing office and fitness center, add carports and redesign the entrance.

Odland laid out no specific plans for future Houston buys, except to say Drever will stay in the market. The region is a particularly difficult market for the firm right now, says Odland, because “Houston is better positioned than most markets in the US.”

Construction starts are down and the absorption-completion equilibrium is closer to a healthy market, he says, adding it makes for a limited supply of readily available distressed properties.

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