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DALLAS-A Dallas investor has bought a second multifamily property, the 75-unit Briarwood Apartments, in less than two weeks as part of a trade-up plan to swap smaller properties for larger ones. Again, the investor plunks down a high down payment, gleaned from 1031 Exchange proceeds, and assumes a loan to win the deed for about $1.8 million.

The Briarwood Pleasant Grove partnership, led by Shirley Smith, assumed a $1.1-million HUD loan for the 98%-leased asset at 8010 Umphress Rd. in the Pleasant Grove neighborhood in the southeastern quadrant of Dallas. The loan is pre-payable after June 1, 2004, an option that most likely will be exercised, Jeff Ratliff, executive vice president of AmeriSouth Real Estate Services Inc. in Dallas, tells GlobeSt.com. He represented the buyer and AmeriSouth’s Case Stockton brokered for the seller, the Cougar Partnership, which is led by Richard Allen of Richardson.

Smith’s partnership sold an 18-unit complex in East Dallas in an ongoing strategy to swap smaller multifamily properties for larger ones. The Briarwood’s units average 735 sf in a mix of 55 one-bedroom and 20 two-bedroom designs. Rent is 74 cents per sf, about the market average whereas the occupancy is definitely above the submarket median, Ratliff says. AmeriSouth, led by Ruel M. Hamilton, is the largest property owner in the submarket and has a nearby complex, but took a pass on the listing, as did others, because of the loan lock-in, Ratliff explains.

The Pleasant Grove property attracted several offers, but most lookers wanted secondary financing in a mezzanine loan or from the seller who was letting go of the last of three properties so he could retire, according to Ratliff. The buyer put up a cash down payment for a discount on the price, he says, adding the incentive lies in its income-producing status. The deal traded at an 11% cap rate for a property developed in 1969 and bought by the latest seller in 1982. The Dallas Central Appraisal District placed the 2003 assessment at $300, 810.

In the last two weeks, Smith used 1031 Exchange funds from a 45-unit sale in East Dallas as a down payment for a $3.5-million purchase, with a GMAC loan assumption, to buy the 156-unit Pineview Apartments in Garland. That deal too was put together by AmeriSouth.

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