Stahlke say the JV acquired the apartment property at a “substantial discount” to replacement cost. By his estimates, it would cost $85,000 to $90,000 per unit to replicate this property.

“But, this property is impossible to replicate because a developer wouldn’t be able to get approvals to build it,” Stahlke contends, pointing out that within a three-mile ring of the property, only 15% of the housing stock is multifamily. “There’s not a lot of competition.”

Completed in 2007, Villas at River Park West offers a mix of one- and two-bedroom floorplans. Community amenities include a business center, laundry facility, clubroom, fitness center and resort-style swimming pool. The property is 99% leased.

Although Stahlke admits the property sounds like a core institutional investment, he says the JV is interested in opportunistic investments. “In addition to the discounted price, we think there is upside with rental rate increases,” he explains. “With aggressive management, we think we can increase rents $100 to $150 per unit – 10% or more.”

Villas at River Park West not only represents the JV’s first acquisition, but the property also is Lane Company’s first buy in Texas. However, Stahlke says the JV, which has the ability to leverage the initial $250 million into $1 billion worth of acquisitions, has another property under contract located in Dallas.

“Our plan is to acquire 10 to 12 assets per year,” Stahlke notes. “With an average deal price of $25 million per transaction that’s $250 million to $300 million in acquisitions annually.”