(Read more on the multifamily market.)
HOUSTON-Realty Associates Fund VIII has acquired the 296-unit Retreat at Cypress Station from its local developer, Allied Realty Services. The acquisition price was kept quiet due to a confidentiality clause, but similar assets are trading for $110,000 per unit.
Hendricks & Partners' principal Jim A. Hearn says the two-year-old asset at 18200 Westfield Place Dr., assessed at $22.7 million by Harris County, was on the market with another brokerage firm about one year ago, but was pulled due to lack of buyer interest. “By luck, this property was in lease-up during Hurricanes Rita and Katrina and the owners took on a significant number of corporate leases,” Hearn explains. As the corporate leases ran out, he says vacancies went up. “Some of the buyers were spooked,” he says.
Hendricks was preparing to bring the now 80%-leased asset back to market when the managers of the Boston-based fund of TA Realty Advisors indicated an interest in buying it. “They'd done some business with the seller in the past, made an attractive, pre-emptive offer and that was it,” Hearn tells GlobeSt.com, adding that the deal was closed within 30 days. The Hendricks & Partners team included Edward Cummins III, Clint Duncan, Ryan Terrell and Heather Moos, all in Houston, and Tom Warren and Christopher Thomson, both in Dallas.
Hearn says the fund's upside will come from improved management rather than capital investment. “The buyer is known for pushing for rapid operational improvements,” he says. “There isn't a whole lot of physical stuff that needs to be done.”
The Retreat at Cypress Station is situated on 17.16 acres. The 13 three-story buildings contain one- and two-bedroom units, averaging 934 sf. Monthly rents are $1.12 per sf. The Michelson Organization of St. Louis will lease and manage the asset.
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