Bostonian Group Grabs 299-Unit High Rise

[IMGCAP(1)]DALLAS-Closing a selectively marketed deal, Bostonian Investment Group has banked the deed to the 299-unit Wedgwood Tower in Stephens Park after a face-off with peers in its buying group and considerably larger competitors. The 11-story tower, bought just days ago for roughly $45,000 per unit, will be retooled and renamed to the Indigo in a bid to reclaim its footing in the market.

Justin Meszaros, CEO of the Boston-based investment group, says the $2-million renovation to the 2511 Wedglea Dr. tower, which abuts a community golf course, will break out some first-floor space for retail and 5,300 sf on the top floor for office. He says the estate of the local owner, Wedgwood Tower Property LP, had put $7 million of mostly insurance money into replacing the burned-out fourth floor and upgrading the elevator and fire alarm system.

After the fire, 70 units were redone with class A finishes, according to Meszaros, who says the remaining units will be getting the same kind of touches as he and Bostonian Group president David Lindahl set their plan into motion. The tower was 80% leased at sale time.

“We feel we’ve gotten one of the primary assets in this marketplace,” Lindahl says, “and are looking to forward to the future when this area competes with Uptown as the place to live, work and play.” Apartment Realty Advisors’ Dallas team of Jordan Cortez and Chris Epp brokered the deal, putting the first high-rise residential tower into the investment group’s portfolio of garden-style complexes.

Jason Rice, director of Dallas-based Quantum First Capital LP, secured three-year bridge financing at 75% loan to value from Baltimore-based Legg Mason Inc. He says the application for Libor-based floater took 60 days to bed down in the current economic climate. “Legg Mason saw the potential, the upside in it,” he says. “It’s a good little diamond in the rough.”

[IMGCAP(2)]Meszaros says the Indigo’s next retooling will be done in phases to create a “hip, urban” tower for the revitalized neighborhood and nearby Bishop Arts District. The Indigo’s windows will be glazed, the skin repainted and the lobby redone in addition to unit updates. The interior designer will be on board in 30 days. “We want to make sure we do it right,” he says. David and I are in this project for the long term. We won’t realize the value of this property for several years. We will sit and wait as the area changes.”

Meszaros says the plan is to replace the existing restaurant and convenience store with a coffee shop and a higher-end restaurant tailored for residents. On the penthouse floor, he envisions it will one day hold a professional office tenant who’s drawn to the space for its Downtown view.

Meszaros tells GlobeSt.com that the seller’s renovation already has shown its value by producing rents that are $100 higher per month than the untouched units. Rents now go from $500 to $1,200 per month for units ranging from 400 sf to 1,210 sf. Bostonian’s L&W Asset Management Co. will oversee day-to-day operations of the Indigo.

“If we execute the business plan, a lot of professionals are saying we’ll hit a homerun,” Meszaros says. “It’s a unique opportunity. There are approximately $80 million of projects in various stages going on there so it’s a pretty exciting opportunity for us.”