The 32-year-old complex at 5600 Chimney Rock was picked up by a southeastern charitable foundation. The buyers plan to operate the apartment community as affordable housing.
In what is becoming a growing trend, the foundation chose to buy the complex with conventional financing obtained via Wall Street, G. Craig LaFollette, senior vice president with the Houston office of CB Richard Ellis Inc., tells GlobeSt.com. Later, the foundation will complete the necessary steps to designate the property as affordable housing. LaFollette says this trend is becoming more popular because obtaining financing as an affordable housing owner is a stumbling block in closing many deals. Sellers most often don't want to wait the five to eight months required to process such a deal, says LaFollette.
In the case of Sharon Park Village, the buyer competed against 10 other offers in a sales cycle that took about 30 days. The class C complex was 93% occupied at sale time. The average unit size is 739 sf. Rent averages 70 cents per sf or $516 per month.
LaFollette says the property is in great condition. The buyer won't have to make any major capital improvements or any big changes to classify for an affordable housing designation.
LaFollette says the buyers were particularly interested in the property's proximity to major employment hubs such as the Galleria and Greenway Plaza. He and CBRE's Todd Stewart, senior vice president, and Todd Marix, first vice president, handled the transaction.
As for the Houston multifamily market as a whole, apartment sales volume is up this year in comparison to last year. LaFollette, like many others, believes Houston's economy and product supply have made the city a much more viable market for investors than cities like Dallas or Atlanta. The momentum could start to wane if job growth does not begin to pick up. If the 30,000 new jobs predicted for next year don't materialize, he says there may be an oversupply issue, particularly in the class A market.
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