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HOUSTON-Just as the 140-unit Las Villas was about to go under contract to another buyer, an investment group from Selah, WA stepped in to snag a class C-minus multifamily asset with a near $3.6-million bid.

Megalodon LLC took the keys to 2724 Broadway St. from locally based HKG-Las Villas GP LLC. “Megalodon own several hundred units in Washington and this is the first purchase outside of their home state,” says Jeff Eisenhardt, an investment broker with Hendricks & Partners’ local office. “The prices here are more affordable compared to other major markets.” The property has an assessed value of $1.9 million, according to the Harris County Appraisal District.

Eisenhardt tells GlobeSt.com that the 95%-leased Las Villas received 10 offers. Megalodon, which derives its name from a prehistoric shark, won the property because it was willing to provide a significant amount of earnest money, he says.

Located in a predominately Hispanic area, Las Villas consists of 30 two-story, garden-style buildings. The complex, built in 1968, sits on 4.2 acres. The mix consists of one 528-sf studio; 83 one-bedroom units, ranging from 697 sf to 739 sf; and 56 two-bedroom apartments with 912 sf to 1,000 sf. Rents run from $385 to $740 per month.

Eisenhardt says Megalodon views Las Villas as a long-term investment with operational upside. “The rents are already toward the top of the market, but the new owner plans to some things to reduce expenses,” he explains, citing such moves as replacing the chillers. “Taking care of the chillers could possibly save up to 30% on the electric bill.” He estimates Megalodon will spend $200,000 to $250,000 to “spruce up the property.”

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