Sterling American started working the deal in early 2003, with the finished transaction requiring 10 loan assumptions so it could replace MBS Properties of Metairie, LA. BH Management is firmly rooted as the portfolio's general partner and is now in charge of day-to-day management duties for the six properties in Houston, two in Corpus Christi and one in San Antonio.
"Now, working together, we will continue to upgrade and improve the assets," Tom Dolan, vice president of Sterling American, says in a press release. With the deal closed, the duo owns 9,000 apartments nationwide, of which 5,974 are located in Texas.
Tarak Patolia, Sterling American's senior vice president and acquisitions chief, tells GlobeSt.com about $2 million has been budgeted to upgrade the complexes. The mix of class B and class C complexes, with a median age of 20 years, was 88% leased at sale time. He says the repositioning plan will focus first on renovations and management and then on raising occupancies.
Six of the nine properties are located in Greater Houston: the 240-unit Crosswinds at 14810 Crosswinds Dr., the 229-unit Seton Chase at 7703 Seton Lake Dr., the 164-unit Vanderbilt Court at 12660 Medfield, the 151-unit Willowbrook at 14150 Tomball Parkway, the 106-unit Lodge at Dairy at 12630 Ashford Pointe Dr. and the 102-unit Bender Hollow at 424 S. Bender Ave.
Sterling American also bought into the 124-unit Hidden Oaks at 13129 NW Military Highway in San Antonio; and the 199-unit Wood River at 4021 Wood River Dr. and the 422-unit London House I and II at 5757 Woodridge, both in Corpus Christi.
Sterling American used capital from its fourth fund, started last year with $300 million of in-house capital and $100 million from co-investors. The fund is expected to run about three years and will be used to fuel $1.1 billion to $1.2 billion of real estate acquisitions.
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