(To read more on the multifamily market, click here.)

FARMERS BRANCH, TX-The Frankel Family Trust has grabbed control of another 368 units to set up one of the largest multifamily blocks of luxury rental space in North Dallas. The Anaheim, CA-based investment group, now owning 940 apartments near the Galleria, jumped into the chase for a property marketed at $29.5 million and decided it wanted its sister too.

Sources say the high-profile package easily broke the local per unit record hovering $90,000. Frankel, like a dozen other would-be buyers, was jockeying for the 207-unit Townhomes at Parkside, a 17.6-acre footprint at 4000 Parkside Center Blvd., and then told its Dallas developers, Eric Laub and Allan Zidell, that it wanted the “gateway,” the 161-unit Parkside at the Ritz, a 3.3-acre tract at 4040 Spring Valley Rd. The Ritz is a mid-rise, wrap-around building with a copper-clad roof that makes it one of the most readily recognizable in the neighborhood.

“The buyer convinced them,” Will Balthrope, senior director for Cushman & Wakefield of Texas Inc.’s apartment brokerage services, tells GlobeSt.com. “He said I’ll take two, but I won’t take one.” He says the double run puts Frankel in control of nearly 45 acres and three class A complexes to become the largest multifamily owner in the Galleria neighborhood and perhaps all of North Dallas. In November 2003, Frankel acquired two side-by-side complexes at 3950 Spring Valley Rd. and re-branded the 572 units as Lakeside at Parkside.

“He wanted that visibility and exposure on Spring Valley Road,” says Don Ostroff, also a C&W senior director. “It will improve leasing traffic and referrals among the properties.”

Built in 2001, the Ritz wasn’t marketed, but its Dallas County assessment is $11.4 million. The six-year-old Townhomes at Parkside is assessed at $17.3 million. Though the brokers aren’t talking about the final price, it’s a safe bet Frankel’s double run cost at least $40 million if weighed against the $90,000 high for comparable product. Balthrope did say, though, “this is the highest per sf ever sold outside the downtown and Uptown core.”

The Townhomes at Parkside came to market a year ago. Time was lost as condo converters kept sizing up the asset. Additional time was needed for Frankel to assume a HUD 221 (d4) loan with 35 years left on the term, according to the C&W team. “It took a number of months to complete due to the lengthy HUD approval process,” Balthrope adds.

The complexes, both 90% occupied, have one-, two- and three-bedroom units. The townhouses, with attached garages, average 1,300 sf; its median monthly rent is $1,450. The Ritz’s apartments average 1,050 sf and rent, $1,275 per month.

Aside from the block of rental properties that’s been assembled, Frankel’s upside is tied to the timing. “He’s buying at the bottom of the rental income market,” Balthrope says. “It’s all gone down for three years. Now, it’s going back up.”

Ostroff says NOI is lower today than it was in 2000. “If Dr. Frankel gets it back to 2000, he’s made a huge increase,” he says.

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