288-Unit Complex Sells for $7M Plus

MESQUITE, TX-A pair of California investors, closing a deal that two others failed to complete, has paid $7.2 million for a 288-unit complex with nearly one-third mile of frontage along a primary freeway in the northeastern suburbs.

“At $25,000 per door, it’s well below the other comps that we’re seeing,” says John J. Griggs III, principal in Centaurus Investments of Hermosa Beach, CA. He and partner, Cross K. Moceri, scooped up the deed to Oakwood Village, a 38-building complex on nearly 12 acres at 2735 E. US Highway 80.

The partners say they plan to change the look of the class C complex’s exterior, possibly the name too, to heighten curb appeal for the lengthy foothold along US Highway 80. “It will be mainly cosmetic. The buildings are in fairly good condition,” Griggs says.

The 92%-leased Oakwood Village contains one- and two-bedroom units, averaging 735 sf. The average rent is $530 per month. “The property is operating very well,” Griggs tells GlobeSt.com. “It’s a true 8 cap.” Devonshire Real Estate & Asset Management Group of Dallas has been hired as property overseer.

Peter Hartnett with Hendricks & Partners’ Dallas office says the listing was “on the market awhile” with two contracts falling out because the would-be buyers just couldn’t perform. “Centaurus got it at the right price and it got done,” he says.

Hartnett represented the seller, VMA Villa Martinique Apartments LLC of San Antonio, which ended a five-year hold as part of portfolio disposition. Hartnett says there are four more properties to sell, of which one, the 318-unit Northpark Terrace Apartments in Dallas, is under contract and scheduled to close in a month.

To make Oakwood Village’s close, the Centaurus partners assumed a $5.8-million loan balance with Cleveland-based KeyBank. The Miami-based LNR Property Corp. is the loan’s special servicer. The loan, which matures in July 2013, has a fixed-rate interest of 5% and 30-year amortization. “As interest rates rise, the assumable loan of 5% adds more value,” Moceri explains.

Centaurus marked its third acquisition in Greater Dallas with the deal, part of a plan to acquire more than $40 million of multifamily properties this year. “Part of our business model is to cluster our properties,” Moceri says. “We’ve ID’d Mesquite as a market to target and we’re looking there at other assets.” Meanwhile, the team has contracts on another 500 units in Dallas and a “fairly large” complex in Houston.