1031 Exchange Buyer Takes 408-Unit Complex

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HOUSTON-In a six-week start to finish, a Washington, DC investment group has sold the 408-unit Indian Springs Apartments for slightly less than the $13.75-million ask. The buyer, San Francisco-based Rupert Pupkin Properties LLC was up against nine other bona fide offers for the northwest Houston property.

“The buyer was in an exchange and wanted to close very quickly so he was willing to do what he could to make it happen,” explains Russell Jones, vice president with Apartment Realty Advisors in Houston. He says the deal closed in 75 days.

Jones tells GlobeSt.com that Indian Springs Apartments at 3700 Watonga Blvd. was the seller’s only asset in Houston, a 1980-constructed complex acquired in 1996. “He’s looking to upgrade his portfolio and wanting to buy closer to home,” he says, adding that the deal closed at a very aggressive cap rate. Jones and ARA Houston’s David Oelfke represented the seller, Titan Real Estate Investment Group. The buyer’s representative was Dan Lem of LEM Real Estate in San Francisco.

The first-time market buyer got an 85%-occupied, class B complex in the Brookhollow submarket. Jones says the new owner will invest another $300,000 to handle some deferred maintenance. Despite the repair work, Jones says the asset attracted a lot of attention because demand for class B complexes with value-add potential is on the rise in the area.

The complex, situated on 12.54 acres, has a mix of one- and two-bedroom apartments. Units range from 622 sf to 1,022 sf while monthly rents go from $465 to $680. Chancellor Property Management Co. Inc. of Houston, which has handled leasing and property management for the seller, will continue doing the same for the new owner.