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HOUSTON-Philadelphia-based BPG Properties Ltd. has roared into the Houston real estate multifamily market, marking the first of two closings for a 15-property, 2,054-unit portfolio. The first deal--1,030 units in eight complexes--rolled $28.63 million into the till of the local seller, Landar Holdings LP.
BPG, an operating affiliate of Berwind Property Group Ltd., will pick up the balance of the class B minus and C plus portfolio in the fourth quarter. The complexes, constructed in the early to mid-1980s, will be operated by Madison Apartment Group LP, a BPG affiliate. The portfolio's average occupancy is in the low 80% range.
Madison Apartment Group will spend $2 million in the next year to make over the properties, which are located in the northwest and southwest submarkets and Pasadena. Renovations will include new roofs and HVAC systems, upgrades to interiors and exterior painting and landscaping.
According to Steve Pogarsky, vice president of acquisitions for Madison Apartment Group, the properties also will be renamed as part of the strategy. "We're not going in and repositioning," he tells GlobeSt.com. "We're focusing on freshening up the properties and bringing the deferred maintenance current."
Pogarsky says the portfolio's desirability is it contains assets in a primary market, which were bought for less than the replacement costs. "The locations themselves are infill locations, which should be somewhat protected from the impact of any new supply," he adds.
In the first round of closings, BPG took control of the Allen Square Apartments at 1111 Queens Rd. Berry Patch Apartments at 1744 Jenkins Rd. and Burke Regency at 3602 Burke Rd., all in Pasadena; the Bradford at 8100 W. Airport Blvd., Rosehill Square Townhomes at 8030 W. Airport Blvd., Pinecrest at 9755 Court Glen, Sunwood Village at 11715 S. Glen Dr. and Woodland Trails North at 10223 Copperwood Dr., all in Houston.
The transaction marks BPG's first in Houston, but it's no stranger to Texas. "The Houston purchases are a strong addition to our Dallas, Austin and San Antonio-area portfolios," Pogarsky says. "Once we close on the remainder of this portfolio, this will complete our market introduction into Texas." However, he says it will not complete BPG's buying spree because it's constantly searching for new multifamily properties. "We're investing out of a $540 million equity fund," he says. "We're looking for assets nationwide."
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