"It was a one-off pool at this point," Ryan Akins, Bascom's point man, tells GlobeSt.com. "It was a very good experience on both sides."
Pacific Coast and the Irvine, CA-based Bascom also have a $20-million equity pool dedicated to Southern California and an $18.5-million fund targeting Atlanta. In addition, Pacific Coast has other joint venture partners in Dallas, where it now owns 3,500 units, and 500 apartments in Round Rock near Austin. Its 200 units in Houston are part of the Bascom pool.
"We are going to sit tight and see how the market progresses because we have more exposure in Dallas and Houston with other partners," says Jennifer Diaz, vice president of the El Segundo, CA-based Pacific Coast. In a press release, she adds "the purchase of these properties allows us to invest in the strong fundamentals of Dallas and Houston and continue a relationship with the Bascom Group, a proven operating partner."
Akins says the last asset rolled into the JV's cross-collateralized pool in early December in an off-market transaction for a neighboring property. The 169-unit Astoria Apartments at 5636 Spring Valley Rd., like the other four in the JV pool, is now being paced through a renovation. The 90%-leased asset will get $8,000 per unit pumped into it in the next 18 months to two years, according to Akins.
Astoria will keep its identity as a separate apartment complex although it abuts the 192-unit Charleston Apartments. "We feel like we can extract more value by operating them separately," Akins says, citing a natural boundary line from a creek that bisects the properties. He projects Astoria will generate about 6% more in rent when its renovation is complete and concessions, now one month free rent for a one-year lease, are removed.
Situated on a 6.6-acre tract, the class B Astoria is a 15-building mix with one- and two-bedroom units averaging 691 sf. The average monthly rent is $638 or 94 cents per sf.
Akins led the JV's buying team, which included James Dargenio and Jerry Hess. The portfolio also includes the 836-unit Equestrian Pointe in North Richland Hills, 206-unit Oak Tree Apartments in Irving and 484-unit Chestnut Park Apartments in Houston.
"We're really excited to get this pool completed. It was really good to work with Pacific Coast," Akins says, "and we hope to exceed their expectations."
From Diaz's perspective, it's time to let the market do its work. "We continue to track the market and see where it takes us. We're definitely an opportunistic investor. As soon as the properties are ready to sell, we'll take them to market," she says. "It takes 18 to 24 months for a turnaround. We're going to start seasoning the properties and then take them out to the market."
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