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DALLAS-A local investor has taken control of the 280-unit Carousel Court Apartments for $6 million, besting five other offers for a 95%-leased value add. Underwriting the race are rents that have gone unchanged for several years.

Carousel Court Apartments, situated at 3800 S. Tyler St., is a 34-building development of one- and two-bedroom units of 558 sf to 728 sf that rent for $360 to $685 per month. “The intent is to push rents and market it more,” John Barker, senior investment associate for Marcus & Millichap Real Estate Investment Services in Dallas, tells GlobeSt.com, estimating in-place monthly rents are $50 to $75 below market, per unit.

Barker says the new owner, with the highest price on the table, closed the deal with 80% loan-to-value financing from New York City-based Citibank. Steve Seiling of BMC Capital LP in Dallas arranged the five-year loan.

Carousel Investments Ltd. of Dallas had owned the complex since February 2000, according to Dallas County tax records. The class C asset, built in 1985, sits on a 7.3-acre tract just minutes from Downtown Dallas.

Majestic Realty Services of Dallas has been hired to lease and manage Carousel Court Apartments. The units have been marketed as all-bills paid, but each one is individually metered to immediately open the upside door for the new owner. “The buyer’s intent is to get the income up, evaluate the market and decide if he’s going to hold for awhile or sell,” Barker says. “There’s not a lot that needs to be done, but the rents have been the same for several years.”

The class B and class C sectors have been particularly active in recent months although few sales, if any, to date have been laid at the doorstep of the capital markets. Barker says his 2007 sales have brought 96.5% of the ask across the board. Carousel Apartments came to market at $6.4 million, including a $4.8-million loan at a 5.6% fixed-rate interest and 7.78% cap rate. The new owner, though, packaged a different play to chase the 20.46% pro forma cap rate that drew investors to the deal.

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