Archstone-Smith has been selling its older properties to condo converters to maximize value. "We had a lot of offers including a handful of condo converters who offered a premium," David Mitchell, a vice president with Apartment Realty Advisors' local office, tells GlobeSt.com. He and David Oelfke brokered the transaction for the 96.7%-leased complex at 2255 Braeswood Park Dr.
According to Mitchell, the Medical Center location was Braeswood Park Apartments' primary attraction for apartment operators and condo converters alike. "There's just so much capital coming into the Texas Medical Center," he says. "It's a good play because of the barriers to entry in the Medical Center." Plus, he points out, the district has an employment base of roughly 61,000 people--many of whom want close-in housing.
The Atlanta-based Choice Condos has just closed out the final sale of a conversion right across the street. "They already have the infrastructure in place, the sales force in particular," Mitchell says, "and, they understand the market and know their buyer profile."
The 23-building Braeswood Park Apartments, situated on 9.2 acres, was built in phases in 1984 and 1999. The first phase is made up of 21 two-story buildings with 240 units; the second phase has 36 units in two structures. Units average 1,046 sf. Monthly rents average $964. The mix has 218 one-bedroom units, ranging from 719 sf to 1,176 sf; 46 two-bedroom apartments with 983 sf to 1,333 sf; and 12 three-bedroom designs, each 1,200 sf.
Mitchell says Choice Condos' strategy starts with residents, who get first dibs and an offer for a 5% discount to buy the unit. He anticipates converter will spend about $10,000 per unit to renovate kitchens and bathrooms. The condos are projected to sell for $150 per sf to $200 per sf.
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