"We like these assets because we were able to buy them at below replacement cost," Shalom Lamm, a principal with Cannon Development, tells GlobeSt.com. "There's a saying that the best time to buy is where there's blood in the streets. There a big opportunity to buy in Houston because some owners are hurting. We are counter-cyclical in our acquisitions."
Canfield Houston, which entered the Houston market in May, now owns five apartment complexes. And, the investment group is in negotiations to spend another $28 million for two more complexes with 800 units.
Crystal Cove and Westbrae Apartments were purchased from Nashville-based Freeman Webb Co. for a total of $18.1 million. With the dispositions of the two complexes, the company is exiting the Texas market, says Judy Beasley of the Freeman Webb. She says the company spent nearly $10.2 million when it bought the 167-unit Crystal Cove in 1996 and 288-unit Westbrae Apartments in early 1997.
The 5.7-acre Crystal Cove, built in 1983, is located at 15615 Blue Ash Dr. on the city's north side. It is a mix of 30 efficiency units, 120 one-bedroom designs and 17 two-bedroom apartments. The units, averaging 716 sf, rent for an average of $597 per month. The complex is 98% leased.
Westbrae Apartments, built in 1984 on 9.5 acres at 10750 Westbrae Parkway, is a 50-50 split of one- and two-bedroom units in 28 buildings. The West Houston property has units averaging 792 sf, rent, with a median monthly rent of $605. The complex is 89% leased.
Canfield Houston acquired the 696-unit Laurel Creek, built in phases in 1985 and 1998, from WDOP Sub I LP, an arm of Dallas-based Walden Residential, for nearly $33 million. The complex, located at 12510 South Green Dr. at the intersection of Interstate 45 and Beltway 8, has one-, two- and three-bedroom units averaging 781 sf. Monthly rents average $670. The 32-building complex is 89% occupied.
Lamm says the company plans to invest $3,000 to $13,500 per unit to rehab the acquisitions. "We think we will be able to offer a value that our competitors can't match," he says.
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