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ROUND ROCK, TX-Making its first buy in the area, Crest Asset Management Inc. of Southlake has snagged the class A 324-unit Steeplechase Apartments from Cornerstone Real Estate Advisors LLC. The buyer also obtained an $18.6-million, three-year loan to cover acquisition and upgrade costs.
Built in 1996, Steeplechase Apartments at 515 Palm Valley Blvd. is 96% occupied. The average monthly rent at $825. "Their business plan is to increase property performance through better management," says Lance Wright, director in Dallas for Norwalk, CT-based GE Real Estate, which provided financing to the buyer. "They'll try to target some expenses, will perform minor upgrades to the interiors and hope to capitalize on the rental market, which is strong there." He adds that Crest also will spruce up the exterior.
Wright tells GlobeSt.com that the deal is an attractive one for GE because its investment is $57,000 per door. "We think this will definitely offer a stabilized coverage within a year," Wright adds.
Wright says Crest is underwriting the deal with a medium-term hold, taking out a three-year, interest-only loan at a sub-6.5% rate. The loan to cost is 75%. Jay Wagley, managing director with CBRE/Melody in Dallas, arranged the loan.
Steeplechase Apartments has one-, two- and three-bedroom units, ranging from 620 sf to 1,152 sf. Patton Jones with Apartment Realty Advisors' Austin office represented the Chicago-based seller. Crest Asset Management had in-house representation.
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