Vruggink points out that current unemployment in the area is just 5% (significantly lower than the national average), and 70% of the employment base consists of white collar jobs. Moreover, household income in the area is nearly $90,000 and the median price for single family home is $255,000.

Gulfstream Capital was introduced to the deal by the lender, Vruggink says. He tells GlobeSt. The Highlands at Grand Pointe was under contract to another buyer; however, the deal fell through after the investor got spooked by the oil spill since Lafayette is heavily dependent on the oil and gas exploration industry for its employment base.

The lender contacted Gulfstream Capital, letting the prospective buyer know the deal needed to close quickly. The firm was able to complete its due diligence and close the deal in just eight days, Vruggink says. It simultaneously acquired the senior note from the lender, the deed from the borrower/developer and a release from the court-appointed trustee that was managing the property.

“It’s not that we’re not worried about the oil spill,” Howard says. “But given our cost basis, we feel comfortable we can still make outsized returns.”

At closing, The Highlands at Grand Pointe was 78% occupied. The property offers a mix of one, two and three-bedroom units with a unit average of 1,345 square feet.

Leasing activity has already improved, Vruggink notes, since the new owner hired San Antonio, TX-based Lynd Co. to handle leasing and management. “We expect upside from increased occupancy and increased rents,” he says, adding that rents range from $900 to $1,600 per unit, which is about 10 cents below market.

The purchase of The Highlands at Grand Pointe is similar to a deal that Gulfstream Capital completed earlier this year. The investor paid $23 million to acquire the 440-unit Falcon Lake Apartments in Jacksonville, FL. JPMorgan and Key Bank held a $35-million mortgage on the property, which cost about $45 million to develop.