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HOUSTON-Following a five-year hold, a New York family sold its only two multifamily assets here. The 192-unit Water Mill and 130-unit Times Square were acquired by a local investor for close to the $17.5-million ask and at a 6% cap rate.

Chip Nash, associate partner with Hendricks & Partners’ Houston office, says Times Square at 2525 S. Voss St. and Water Mill at 6506 Westheimer Rd. share one thing in common: their location in the Galleria submarket. “They were meant to be sold together,” adds Nash, who represented the seller 1775 Partners Ltd. and the buyer, S. Voss Ltd. “We had a number of people wanting to go one-off, but the seller wanted to sell both together.”

The seller opted to move on the class B complexes because of a strong market. While the seller no longer owns multifamily properties, the company continues to own and acquire industrial and office square footage, Nash says.

He tells GlobeSt.com that 1775 Partners Ltd. was willing to acquire both class B properties. In addition, “we were able to verify their capability in the market and with these properties, as they have other holdings in the area,” adds Nash, who was assisted by Hendricks & Partners colleague Greg Austin.

Both 1970s-built properties were financed through Wrightwood Capital in Chicago, and Nash says they both offer a strong upside potential. The rents are currently below market rates, and there is room to increase rents. The 95% occupied complexes offer one- and two-bedroom units, with apartment sizes ranging between 774 sf and 991 sf. The monthly rents are between $700 and $875.

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