"It's a bread and butter B deal," says Brian Murphy with Atlanta-based Apartment Realty Advisors in Dallas. The deal for the 1716 N. Galloway Ave. property took 90 days to complete due to a loan assumption, he says.
Murphy tells GlobeSt.com that 22 offers were on the table, but the dealmaker was the buyer's willingness to go hard with non-refundable earnest money at the contract's execution. Based on the marketing flyer, the buyer assumed a $7.35-million loan at 5.9% fixed-rate interest with a 10-year term through Charlotte, NC-based Wachovia Bank. ING is the loan's special servicing agent.
Pine Oaks has a Land Use Restriction Agreement resting against it, which requires 84 units are rented to low-income residents. The mix ranges from 555-sf efficiencies to 950-sf two-bedroom units. The monthly rent averages $630. Murphy says the seller, ARG1 Investors LLC of Dallas, renovated the asset's exterior and put on new roofs in 2005-06 so the new owner "can focus on interiors and move rents slightly."
Pine Oaks was marketed for $10.9 million, but the final price is not being disclosed due to Texas' confidentiality rules. Dallas Central Appraisal District has the asset assessed at $8.23 million. In Mesquite, class B deals have been trading for $30,000 to $45,000 per unit.
Murphy says the "value-add story" has been the drawing card for offers in this cycle. "On a few deals, we've been fortunate they've been in good locations and had a value-add story so we've been able to attract some good interest," he says.
Pine Oaks is located east of Interstate 635 and south of US Hwy. 80, close to schools, retail and Lake Ray Hubbard. The ARA team included Brian O'Boyle Jr., Jordan Cortez, Chris Epp and Mike Girard.
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