ARLINGTON, TX-A 224-unit, class B complex has traded in a reverse 1031 exchange with a tenants-in-common group making its first investment in North Texas. The Las Vegas-based buyer has paid $9.52 million to start out the play at a 6.8% cap rate.

The TIC buyer is jumping into an $800,000 renovation of Walnut Creek Apartments at 5901 Valleycreek Lane, with unit interiors on the “to do” list as well as some deferred exterior maintenance, says John Barker, senior associate in Dallas and director of the multi-housing group for Marcus & Millichap Real Estate Investment Brokerage Co. He tells GlobeSt.com that the new owner made the close with exchange funds from the sale of a multifamily property in the Phoenix metro and Fannie Mae financing at a 50% loan to value and 6.6% fixed-rate interest.

Barker says the 10.5-acre Walnut Creek was on the market nearly four months, reeling in at least 17 offers from would-be buyers, a pack that included only two local investors. He says Rohnert Park Center LP took the win with the highest offer: 95.5% of the $10-million ask.

The 89%-leased Walnut Creek contains one- and two-bedroom units from 748 sf to 1,060 sf. Barker says the buyer’s upside lies in possible 5% rent hike after the renovation is done. Right now, the units are fetching $559 to $770 per month. The gated complex, with fireplaces in units, sits just south of Parks Mall and close to Interstate 20 and Tarrant County Community College’s south campus. “This will be a good asset for the buyer once he renovates and stabilizes it,” Barker adds.

The Toronto-based seller, which bought the property in 2002, has been disposing of its local holdings about two years. “They are down to the last few,” says Barker, who partnered with Marcus & Millichap associate Will Jarnagin to negotiate the sale.

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