BEAUMONT, TX-A San Francisco investment group has put up slightly more than $10 million for a class A, 152-unit complex in a plan to collect on the upside from a future expansion on 10.2 extra acres of developable land. The sale is believed to have set a record for a fast-growing suburb northwest of Houston.

Lynch Investments LLC bought the Pointe Apartments at 4165 Dowlen Rd. in Beaumont from Weston Apt. Homes Inc., a local custom homebuilder who spent three years developing the 14-building complex. The 14.3-acre project, finished earlier this year, was 99% leased at sale time.

“I could have had 20 offers, but the San Francisco buyer flew out and looked at it right away,” Gregory Keith, an investment specialist in Marcus & Millichap’s Austin office, tells GlobeSt.com. “This is the first verifiable apartment sale in the Beaumont area that was over $60,000 per unit.”

Keith says the hurdle to jump was finding a buyer who saw the opportunity rather than viewing the listing as a smaller property in a city nearly 90 miles from the Houston line. “It’s not 300 units and it’s not in Houston or Dallas, but it’s a fantastic deal,” he says. “They did a good job of buying it and they looked at it as an opportunity.” Not only is it the only multifamily product near Parkdale Mall, but it neighbors a Wal-Mart, Barnes & Noble and a string of restaurants. The buyer, who owns multifamily assets in Houston, secured a Freddie Mac loan through Jeff Knowles in Holliday Fenoglio Fowler LP’s Houston office to make the close.

Keith says the buyer first optioned the extra land and then opted for a lock, stock and barrel buy of the seller’s first class A multifamily development. The land is the key to the upside, allowing for expansion and the addition of amenities like a swimming pool, fitness center and covered parking. Though labeled a class A, the Pointe is outfitted with only a sports court although interiors are top of the line, says Keith, who will shift his operations base in the fourth quarter to Marcus & Millichap’s San Antonio office. “They could really turn the entire property into a project that suits their management style and be an institutional-quality, class A (development).”

The Pointe Apartments is a mix of 50 one-bedroom and 102 two-bedroom units, ranging from 667 sf to 1,201 sf. Rents start at 85 cents per sf and go up to $1.10 per sf. Houston-based Capstone Management Co. is taking over the asset’s management.

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