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DALLAS-Transwestern Investment Co. LLC, armed with $200 million of equity and planning to add more, has snagged its first deeds for a multifamily buying spree in a select pack of metros. The portfolio begins with 507 class A units bought in two transactions from their developer, Gables Residential Trust.

The flagship buys for Transwestern Multifamily Partners LLC fund is significant on several fronts, including the fact that it’s been at least five years since the Chicago-based group bought multifamily product in the region. Second, it’s a core-plus fund being led by Douglas Crocker, former CEO for Chicago-based Equity Residential Properties Trust, who’s planning to push the equity ceiling to $250 million with a third closing.

Seeding the portfolio is the 319-unit Gables Valley Ranch at 8600 Valley Ranch Parkway in Irving and 188-unit Gables Spring Park at 2701 Lookout Dr. in Garland. Edward Ryder, managing director of multifamily acquisitions for Transwestern, tells GlobeSt.com that the new buying group has made the “best and final” for another large deal floating in Dallas and has “six or seven” properties in its sights. “Our intent is not to buy just two in Dallas. We’d like to own four to six,” he says.

Besides Dallas, the scouts are out in Denver, Atlanta and Raleigh-Durham and Charlotte, NC. In fact, Ryder says he tried to strike a portfolio deal with Gables, but it stuck to its plan for piecemeal sales.

Dallas has garnered the top “buy” spot for its recovery promise, according to Ryder. The just-bought properties “are good class A assets that we think will have a part in the recovery,” he says. “They are very good locations and pretty high quality.”

The properties’ new names have yet to be picked, but locally based Lincoln Property Co. has already been tapped to lease and manage them. The play starts with occupancies hovering 95%. Ryder can’t confirm the final price, but comparable product in the region is bringing $80,000 to $90,000 per unit, which would set up a trade in excess of $40 million.

The Valley Ranch complex, situated on 14.7 acres, was developed in 1994. It is a mix of one-, two- and three-bedroom apartments, ranging from 743 sf to 1,363 sf. Monthly rents are $692 to $1,510. The sales team was the Apartment Group of Dallas.

Gables Spring Park, built in 1995 on a 12.2-acre tract, has one- and two-bedroom units, all with attached garages to set up a back-up exit strategy on the condo front. Its units of 806 sf to 1,216 sf rent for $880 to $1,125 per month. A Cushman & Wakefield of Texas Inc. team handled the sale for the Boca Raton, FL-based Gables, which has been shedding its older properties since the takeover by New York City-headquartered ING Clarion Real Estate Securities.

“We’re going to be very aggressive in pushing rents,” Ryder says. “Our general view is Dallas has some good upside in rents.” Although competition from construction is always a concern, he says there’s no clear and present danger so “it will give us some real pricing power.”

Ryder says the plan calls for a five-year hold on the assets, with a portfolio sale among the exit considerations. He says the fund, based on 75% leverage, could accumulate 8,000 units in 20 to 25 properties in its target cities. The spending plan has a three-year window. “Our goal is to do it in two years,” he says.

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