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HOUSTON-Five years after converting a former cotton warehouse complex into a 224-unit multifamily project, Trammell Crow Residential and New York City-based Morgan Stanley are bringing the asset to market. Alexan Lofts, located on CBD’s east side, is on the National Register of Historic Places and valued by the Harris Central Appraisal District at $21.4 million.

The six-building asset is situated on roughly six acres at 2115 Runnels St. G. Craig LaFollette, executive vice president in CB Richard Ellis’ Houston office, says part of the reason for the offering is due to expiration of historic tax credits on the property, which expire in September. “It was always their plan to go in, renovate it, then sell it,” adds LaFollette, who is marketing the property along with CBRE senior vice presidents J. Todd Stewart and M. Todd Marix, vice president Tre T. Banks and associate Chris D. Curry.

LaFollette tells GlobeSt.com that, while the sellers did an outstanding job of conversion, there’s enough left on the table for a solid value-add proposition. “They didn’t go through and put granite in the kitchen. There’s also an abundance of common-area space, where they can enlarge the exercise facility and other amenities,” he says, pointing to additional value-add moves like building more storage units.

LaFollette expects the asset will appeal to all levels of buyers, including individuals, private capital and institutional purchasers. Offers are due Aug. 13, with a closing anticipated in late October.

The buildings were developed between 1880 and 1920 to store cotton. They gradually fell into disuse during the 20th century. During the 1980s, the City of Houston converted the asset into El Mercado del Sol, a marketplace to serve the Hispanic community. El Mercado del Sol, however, didn’t go take off and was acquired for $610,000 in 1997 by Canadian company TransAmerica Group. Atlanta-based Trammell Crow Residential and Lend Lease acquired the property in 2003, shortly before the Australian giant was bought by Morgan Stanley.

With the CBD’s east side growing, LaFollette says Alexan Lofts is an unusual offering in that it’s a historic landmark building in a city that doesn’t have too many of them. “People will look at the buildings’ cash flows, see what they are, then make their bids based on that,” he adds.

The 91%-occupied Alexan Lofts has one-, two- and three-bedroom units, measuring from 859 sf to 1,839 sf. Monthly rents range from $1,204 to $2,568 per unit.

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