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COPPELL, TX-Houston-based CNC Investments Ltd. has bested at least 25 other would-be buyers to win the value-add rights to the 398-unit Townlake of Coppell complex. To show the upside to be made from a renovation, the seller did a test drive of 10 apartments.

CNC Investments claimed the deed for the 215 N. Moore Rd. development from CWS Capital Partners LLC of Newport Beach, CA. Roberto Casas, a director in Dallas for Holliday Fenoglio Fowler LP, tells GlobeSt.com that the sampling of renovated apartments yielded an average of $100 more per month per unit at the 95%-leased complex. Pre-renovation rents for the one-, two- and three-bedroom units, ranging from 986 sf to 1,093 sf, are $805 to $1,270 or $915 on average.

“We had a lot of offers,” Casas says, “more than we normally get. It was a value-add opportunity to rehabilitate. And, CNC is going to finish it.”

CNC borrowed $26 million, including renovation capital, to make the close. Gregory P. Pappas, HFF’s senior managing director in Houston, and Tucker Knight, managing director, lined up Columbus, OH-based Nationwide Real Estate Investments to kick in equity for its first teaming with CNC Investments.

“Nationwide was attracted to the deal because of the exceptional sponsorship and also, in this particular deal, the location in Coppell and the Coppell school district,” Pappas says. The final sale price is off limits as is the loan-to-value ratio, but its Dallas Central Appraisal District assessment is $19.8 million or $49,748 per unit.

Pappas says HFF provided an 11-year loan at a fixed-ate interest through its Freddie Mac program. The deal went full circle in 90 days despite its timing in the capital markets. “The capital markets were disrupted, but the lenders hung in there and did what they said they were going to do,” Pappas says. “That was a challenge, but they did.”

HFF managing director William D. Miller led the sales team, which included associate director Aaron Sloan and Casas. “There were a number of officers on top of each other,” Casas explains. “CNC was at the top along with a few other groups.” He says the deal piqued interest from private and institutional buyers alike due to its upside from the upgrade program, predominately aimed at unit interiors to nudge the 11-year-old complex to class A-minus status. The seller bought Townlake at Coppell in March 2004 from Post Apartment Homes LP in Addison, TX.

According to Casas, the City of Coppell has no new multifamily developments under construction nor any large tracts left to add to the stock. In addition, the 17.5-acre Townlake complex is positioned close to Interstate 35, Texas 121 and 18 miles northwest of the Dallas CBD, adding more clout to its location.

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