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DENTON, TX-After one year of fine-tuning the deal, Transcontinental Realty Investors Inc. has taken control of a 25.9-acre tract earmarked for multifamily development in the 430-acre Preserve at Pecan Creek. Comparable dirt in the area has been fetching $2 per sf.
Transcontinental Realty, part of the Gene E. Phillips Children's Trust network, got a commercial foothold at the intersection of Interstate 35 and Sandy Shores Drive near Denton's medical district and close to the 1,200-lot master-planned development, the Preserve at Pecan Creek. Transcontinental won last year's competitive match for the land with the highest offer out of a half dozen during a 60-day marketing, Jay Gunn with Hendricks & Partners LP's Dallas office tells GlobeSt.com. He says the closing was delayed due to development issues and easement rights.
The sellers were the Harriet Group, Preserve I Development LLC and Westover Residential Co., a joint venture of in-state and out-of-state investment groups. Westover, the only North Texas player in the mix, started to develop the master-planned community about nine years ago.
Gunn says the acreage will be built out solely with multifamily product. The land is entitled for 400 units. He says Transcontinental isn't planning to flip the acreage, but rather develop it on its own. The construction timeframe, though, has yet to be decided along with the kind of multifamily product that will rise in the two-university town, says the deal's sole broker.
According to Greg Willett, vice president of M/PF YieldStar Inc., there are no units under construction in the city. The college town has 12,500 apartments, excluding university-owned product. Denton's stock is 94.4% occupied in comparison to Dallas/Fort Worth's average of 92.2%. Newer product in the city is fetching $837 per month while the overall rent is running $654, he says.
Transcontinental and its sister company, American Realty Investors Inc. own $2.6 billion of real estate, which is managed by Dallas-based Prime Income Asset Management LLC. The 17-property multifamily portfolio consists of 4,000 units in 11 Texas cities, including all major metros, and Little Rock, AR.
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