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HOUSTON-The Galleria submarket is a busy place these days, despite the economic downturn. Two multifamily complexes across the street from each other and belonging to different sellers are being presented the same way: as income-producing properties with future redevelopment potential.

Both assets are also in different parts of their marketing phases. The 633-unit Tanglewood Court on 17 acres at 5885 San Felipe St. has just been brought to the sales block. Meanwhile, its cousin, the 587-unit Three Fountains Apartments across the street on 16 acres at 2313 Fountain View is approaching a December 4 call for offers deadline.

Both assets share certain characteristics and were once sister properties. They’re mid-1960s vintage assets in decent shape, sporting an above-90% occupancy. They’re in excellent infill locations. And according to the brokers who have the marketing assignments, they’re providing an interesting lesson in how to shift gears in a market in which liquidity has slowed to a trickle.

“This is a large, older infill property that sits on a piece of land that, just a couple of years ago, would have been considered an absolute primo spot for an operator,” says Houston-based Jim Hearn, partner with Hendricks & Partners about Tanglewood Court. Hearn has the Tanglewood Court marketing assignment with other local Hendricks & Partners brokers.

“Last year’s cash flow on this was outstanding,” Hearn tells GlobeSt.com. “The numbers are a little less on that this year based on current operations, but not by much.” As a result, he adds, an apartment operator, land speculator or both, could buy the property now for its income stream, with an eye to a future of redevelopment when the credit markets loosen.

Three Fountains Apartments was marketed in much the same way. “In my opinion, anything we see here has to work as an income-producing property in the short term, especially given there’s no liquidity out there to do much else,” says CB Richard Ellis Co.’s executive vice president G. Craig LaFollette, who has the property’s marketing assignment with the multifamily housing team in Houston. “Investors looking at this ultimately know it’s a redevelopment ploy. Obviously not today, but four or five years down the road.”

Unlike Tanglewood Court, which came to market with assumable debt to the tune of $30.8 million at 4.81% interest, Three Fountains was presented as an all-cash deal. Given the scenario, LaFollette acknowledges closing won’t take place until well after the first of the year.

Still, the asset attracted solid local and out-of-state interest. “The building is okay; it’s not run into the ground by any stretch and it’s been well-maintained,” LaFollette says. “Otherwise, this is a visible property, on a nice street, that’s been around for a long time.”

Hearn says though Tanglewood Courts just came to market, it has also attracted its share of attention, again because of the location, the visibility and the potential redevelopment play. Additionally, the buildings underwent a massive renovation in the early 2000s. “This is in pretty good condition,” Hearn comments. “There’s room for more renovation, but it’s in a lot better condition than one might expect for a 1960s property.”

Hearn, however, is not putting a deadline on call for offers. “Having a bid deadline on an asset just a couple of weeks before Christmas didn’t seem appropriate,” he comments. “We’ll probably keep this on the market through the first part of January, through the NMHC meetings.”

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