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DALLAS-With 3,000 of his 7,800 units positioned in northeast Dallas, a private investor from El Paso has scooped up 966 additional apartments in the submarket in two transactions from a subsidiary of Ocwen Financial Corp. The all-in investment, including the renovation tab, will end up as a $26-million to $30-million repositioning play.

“We do like to get a big footprint in a specific area,” says Richard Aguilar, president of Cash Investments LP and Integrity Asset Management Co. He tells GlobeSt.com that he plans to buy another 3,000 to 4,000 apartments this year, with the next closing coming in 45 days–500 more units in Dallas. In 2.5 years of buying, he’s acquired 3,700 units in Dallas/Fort Worth, 352 in Austin and the 3,748 balance in his homeport, El Paso.

This time, Aguilar’s cast his net around the 506-unit Forest Club Apartments at 9690 Forest Lane and the 460-unit side-by-side Ashton Pointe and Ashton Springs at 7070 and 7120 Skillman St. Aguilar, who has renamed the properties, will renovate, re-brand and re-tenant the class C trio. He expects to spend $3,000 to $4,000 per unit on overhauls to nudge the assets to a class B quality.

Forest Club, now being called Trinity Palms, was under contract a couple times before Aguilar stepped in to make the close, says Robert Casas, a Dallas director for Holliday Fenoglio Fowler LP, who teamed with managing director William Miller and associate director Aaron Sloan to sell the property for Blue Valley Apartments Inc. The 75%-leased complex was marketed at $14.4 million.

Aguilar established his track record with the West Palm Beach, FL-based seller in September 2005, closing on 442 units in northeast Dallas. With the second deal advancing toward the closing table, Blue Valley asked the HFF team to see if Aguilar would be interested in the Ashtons, viewed as a harder sell due to 68% occupancy and deferred maintenance, according to Casas. “It was just a matter of agreeing on the price,” he says.

The triple play is “right down the fairway for him,” Casas stresses. “These are good repositioning opportunities. The play here is to do the rehab, lease up, stabilize and push the rents.” All are positioned near DART light-rail stations, carry Dallas addresses and are part of the Richardson Independent School District. The Ashtons, now being called Bella Palms, sit within the bounds of a relatively new tax-increment financing district for the Skillman corridor.

The 60-building Trinity Palms, positioned on 19.19 acres, has units averaging 814 sf with rent running 70 cents per sf. Bella Palms, situated on 32.8 acres, has apartments averaging 797 sf, with rents in the 60-cent per sf to 63-cent per sf range. Trinity Palms was developed in 1971 and renovated in 1997 while Bella Palms rose in 1978 and underwent a partial redo in 1990.

Greg Pappas, HFF’s senior managing director in Houston, and Charlie Gasper, real estate analyst in the office, secured 90% loan-to-cost financing for Trinity Palms in a first mortgage from the Birmingham, AL-based Regions Bank and a 10% mezz piece from FAF Advisers of Minneapolis. The Bella Palms deal closed with 85% loan-to-cost financing from Sovereign Bank of Philadelphia. Pappas says Trinity’s $12.5-million package and Bella Palms’ $8.7-million facility have two-year terms with one-year extensions at interest-only payments. The Libor-based financing floats at below 300 basis points.

“The sponsor’s track record was critically important to securing the acquisition financing with these assets,” Pappas stresses. “Cash Investments and Integrity Asset Management have an extensive track record of acquiring class C assets, renovating them and repositioning them as solid B assets within their respective markets.”

Aguilar says the repositioning plan, though tied to renovations, first addresses delinquencies. “We are strong on collections,” he says. “To us, a delinquency is a vacancy. Once people see we’re doing what’s necessary, we normally see our concessions don’t have to be heavy or do anything out of the ordinary to bring in good people.”

Aguilar says it will take about five months to renovate the complexes. Ling Construction Co. of Dallas is the contractor. And as always, Integrity Asset Management is overseeing the properties.

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