(Read more on the multifamily market.)
HOUSTON-Birchmont Capital Advisors LLC has continued its hard push in Texas, buying two multifamily portfolios totaling 3,596 units. The Los Angeles-based buyer, teaming with two unrelated partners, has spent about $172 million for the portfolios.
In the larger portfolio totaling 2,488 units, Birchmont partnered with JRK Asset Management, also from Los Angeles, to acquire 1,768 units in Houston, 496 units in Dallas and 224 units in San Antonio for $102 million. Matt Rotan, principal with Apartment Realty Advisors' Houston office, says the buyers' plan for the nine-property portfolio is to invest $3,000 to $5,000 per door into upgrades. He says the new owner expects to raise monthly rents by $75 to $100 per unit once the renovations are done.
“The portfolio was well occupied across the board, but had low concessions, which is unusual for that type of product,” says Rotan, who represented the seller, Apartment Investment & Management Co. of Denver. He tells GlobeSt.com that the portfolio averaged less than 4% in concessions and occupancy was 97%. The average unit is 800 sf; rents average 81 cents per sf.
Although the complexes are doing well, Rotan says Aimco is trying to freshen up its portfolio. “As long as they can sell assets that won't disrupt cash flow, they sell them,” he explains. “With the market the way it's been, they felt they could trade these in and buy a newer product with a negative impact on the FFO.”
Working with Rotan on the 2,488-unit transaction were ARA principal Cliff McDaniel and vice president Russell Jones in Houston; Patton Jones, sales director in Austin and San Antonio; and Brian O'Boyle, founder and managing broker in Dallas. The transaction is Birchmont's and JRK's second from Aimco. In early 2007, the partnership bought a 1,383-unit portfolio of multifamily complexes in Amarillo and Dallas.
In a separate transaction, Birchmont formed a joint venture with Kansas City, MO-based JTL Properties to acquire a 1,108-unit portfolio in Dallas and Fort Worth for roughly $70 million from Lozier Investments of Omaha. The assets are all class B properties developed in the early 1980s.
Birchmont and JRK's loan totaled $83 million for their nine-property acquisition Birchmont and JTL Properties borrowed $56.12 million for their six-asset acquisition. Both Freddie Mac loans were arranged by Greg Duvall, senior vice president and senior director in NorthMarq Capital Inc.'s Kansas City, KS office.
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