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DALLAS-In unrelated transactions, two multifamily assets, with a combined 186 units positioned about a half mile apart, have changed hands in Southeast Dallas. The back-to-back sales of the value-add complexes have reeled in a total of $3.37 million.

A Roseville, CA private investor closed a $2.17-million acquisition of the 124-unit Hemingway House Apartments at 3410 Fordham Rd. while a Fort Worth investor scooped up the 62-unit Bonnie View Apartments at 3823 Bonnie View Rd. for $1.2 million. In both cases, occupancies hover 75%, says John Barker, senior associate in Dallas and associate director for Marcus & Millichap Real Estate Investment Brokerage Co.’s national multi-housing group.

Barker tells GlobeSt.com that the Hemingway House sale went full circle within 100 days for the 10-year owner, Aditar Global Inc. of San Francisco, which set up short-term acquisition financing for a buyer with 25% down, thanks to a multifamily property sale in his hometown. The new owner will undertake an extensive renovation after he and his wife relocate to Texas to turn around the asset, according to Barker. “The plan is to come in there, fix it up and sell it within a year to two years,” he says.

Hemingway House, built in 1976 on 3.7 acres, has 20 one-bedroom units, each 760 sf; 92 two-bedroom apartments, 860 sf; and 12 four-bedroom floor plans with 1,640 sf. Rents are $375, $450 and $888 per month. “There’s a lot of upside in the management opportunities,” Barker stresses.

Barker says the Bonnie View Apartments passed from a Portland, OR seller to a North Texas buyer who sold a smaller complex in East Dallas and satisfied the 1031 exchange with the acquisition. The high vacancy and rent concessions kept the holding on the market six months, he explains. “It’s a difficult value-add deal,” he says. “The biggest objection was the performance of the property.”

Barker says the new owner plans to roll up his shirt sleeves and dig into a hands-on management approach to re-tenant the 1.7-acre holding. The 23-year-old complex, fully renovated eight years ago, contains 16 one-bedroom apartments of 550 sf that rent for $462 per month and 46 two-bedroom units with 700 sf and a monthly rent of $565.

Though both new owners have their jobs cut out for them with the value-adds, vacancy marketwide is predicted to drop 11.1%–the first decline in six years–before this year ends, according to Marcus & Millichap’s latest multifamily report. The brokerage house’s researchers also project asking rents will rise 0.8% to set up a $737 per month average while effective rents are expected to jump 1.5% to $681 per month. To date this year, asking rents are up 0.5% to $734 monthly. For buyers, the median price of multifamily properties is $32,800 per unit, up from $31,600 apiece at the 2004 close, researchers say.

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