(To read more on the multifamily market, click here.)
ARLINGTON, TX-In unrelated transactions, two complexes on opposite sides of the city have been bought by California investors. The 498 units have brought close to a combined $18 million for the sellers.
The just-sold properties are the 250-unit Southern Hills Apartment Homes at 2624 Southern Hills Blvd. and 248-unit Runningbrook Apartment Homes at 1519 Running Brook Dr. The 94%-leased Southern Hills was on the market for $11.5 million and the 88%-leased Runningbrook was up for grabs for $7.41 million. In both cases, the buyers paid "within striking distance of the asking price," says Tom Burns, associate partner with Hendricks & Partners in Dallas. And both California buyers, he says, are planning holds with three- to five-year horizons.
The class B Southern Hills picked up a dozen offers during a four-month run on the market, with the highest coming from American Redevelopment Group LLC of the Los Angeles area, which assumed an $8.56-million Freddie Mac loan to win the deal, Burns tells GlobeSt.com. The floating-rate financing bears a 5.65% lifetime cap on the interest, maturing in July 2011. The seller was Domain Communities LLC of Phoenix.
Burns says Southern Hills' new owner will put $300,000 into upgrades of the 27-building complex, built in 1984 on 20.2 acres near US Highway 360 in North Arlington. The mix of one-, two- and three-bedroom units rents for $549 to $1,075 per month. The apartments range from 718 sf to 1,488 sf. The sale traded at a 6.1% cap rate, according to Burns, who teamed with Hendricks' adviser Jay Gunn on the asset sale.
The class C Runningbrook was bought by Calypso Communities from Arcap Special Servicing Inc. in Irving, TX, which had nine offers to weigh after a three-month marketing. "Runningbrook has to be repositioned more so than Southern Hills," Burns explains. "This was a group that we felt could get the deal done."
The new owner is taking on repairs of a burned two-story structure in the 21-building Runningbrook, built in 1983 on 10.2 acres about five miles south of Southern Hills. Runningbrook's apartments, ranging from 414 sf to 1,150 sf, are renting for $350 to $522 per month or on average, $40 per month below the market, says Burns, who teamed with Hendricks' executive Tom Warren on the deal.
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