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DALLAS-Ending the hold much earlier than anticipated, the Drever Fund has turned over a 308-unit, class A-minus multifamily property in the state capital to the top offer from a cherry-picked list of possible buyers. The 95%-leased holding, bought just two years ago for $17.75 million, has brought $22 million from a Dallas buyer.

The Tiburon, CA-based Concierge Asset Management, manager of the Drever DOF Fund LLC, sold the Village at Gracy Farms to Corinthian Apartments Investors, formed a year ago by Douglas Gunn and marking its second partnership purchase with the Boston-based Guggenheim Real Estate Fund. “We knew what we wanted for it,” Joe Gillespie, Concierge’s acquisitions director, tells GlobeSt.com about the hand-off of 2600 Gracy Farms Lane in Northwest Austin. “Gunn and his group were the most aggressive from the beginning and gave us the price that we wanted.”

Gillespie says $750,000 went into upgrading the 17-acre complex, which had an economic occupancy in the 80% range when it was bought in 2003 at the height of Austin’s dark days. “It was a contrarian play. We were looking at a four- to six-year horizon when we bought it,” he says, “but we hit our exit pricing in two years.” Richard Obenhaus, a principal in Austin for the Apartment Group, quietly marketed the holding to Drever’s private list.

Gunn says the upside will come from a five- to seven-year hold, rent increases and the steady uptick in Austin prices. In recent months, Gunn, Corinthian’s managing partner, says similar nearby properties have been tagged 10% higher than what the JV paid. “Rents are approximately 75% of what they were in 2000 and 2001,” he says. But, that’s sure to change. “It’s a realistic event of when not if,” he adds. The Village at Gracy Farms is located in an infill area with no available land and right around the corner from the Domain, the former IBM campus that’s being retooled by the Indianapolis-based Simon Property Group.

To make the close, Gunn says Corinthian assumed a $12.4-million, Freddie Mac loan with eight years left on the term. The loan, with a 5.24% fixed-rate interest, is serviced by Paul Nauschutz in Wachovia Securities Inc.’s Dallas office.

The Village at Gracy Farms has 132 one-bedroom units, ranging from 650 sf to 750 sf; 144 two-bedroom apartments, 933 sf to 1,067 sf; and 32 three-bedroom designs with 1,219 sf. Rents range from $575 to $950 per month.

In January, Gunn tapped the Guggenheim pool to acquire a class A property in Plano which, like the Austin asset, will be Corinthian-managed. He says he’s not holding any other contracts, but is actively looking for multifamily product in Dallas/Fort Worth, Austin, Denver and Phoenix.

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