DENTON, TX-A Canadian investment group, looking to break into North Texas for awhile, has bagged its first multifamily property, the 308-unit Savannah Trails Apartments. The all-cash play closed one day ahead of schedule after going full circle in 74 days at the height of the capital markets pullback.

“Timing was critical,” says Peter Hartnett, associate partner in Dallas for Hendricks & Partners, who credited Alex Katz, now managing director of the Los Angeles office for New York City-based Meridian Capital Group LLC with keeping the deal on track. Hartnett tells that the buyer of record, Dallas Two LLC of Canmore, Alberta, had to put up an extra $250,000 of earnest money for the 1610 E. McKinney St. property to lock in its interest rate.

As the capital markets faltered, Katz also managed to get a defeasance done in two weeks for the Dallas-based seller, Apple Creek Partnership LP, and sewed up details for the buyer’s loan at a lower fixed-rate interest with Credit Suisse First Boston, according to Hartnett. “He was very instrumental in getting that deal done. They performed, they did exactly what they’d said they’d do and they didn’t re-trade,” the broker says.

At the crux of the chase was an 89%-leased class B complex with 25% of its tenant base as students from the two-university town. Hartnett says the new owner doesn’t usually trade in student housing properties. “They saw the value-add opportunity and saw a lot of upside,” he explains, adding the submarket’s 97% average occupancy lent to the buyer’s interest. Savannah Trails, with 19 residential buildings and a clubhouse, is an 11.4-acre foothold within walking distance of a city park with sports fields and a regional retail hub.

The 22-year-old Savannah Trails was marketed for $13.7 million. Hartnett can’t disclose the final price, but did say that the buyer was the highest of seven offers that rolled in during the three-month marketing. Based on property and market dynamics, industry sources say the deal most likely brought $13 million to $13.5 million at the finish line.

Savannah Trails’ unit mix ranges from 424-sf efficiencies to 877-sf two-bedroom, two-bath apartments. Rents begin at $436 and go up to $648 per month. Mayan Management Inc. of Dallas has been put on site to manage and lease it.

“Their plan is to doll it up a little bit, raise rents and put in new management,” Hartnett says. And, the new buyer in town isn’t stopping with one acquisition. “They are looking for properties in good submarkets,” he adds.

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