HOUSTON-Adams LaSalle Institutional Apartments, a subsidiary of Adams LaSalle Realty (ALR), added the 444-unit Wynnewood at Wortham Apartments complex to its collection of assets. The Chicago investor bought the class A complex from Sentinel Real Estate Corp.
The sales price was undisclosed, with the Harris County Assessment District valuing the complex at $19 million. The interesting aspect about Wynnewood at Wortham is that, unlike a lot of multifamily properties on the market these days, the class A asset at 10225 Wortham Blvd. wasn’t in any kind of distress, nor was it in receivership or foreclosure. It also has a stable occupancy at 94%. This doesn’t stop it from providing value-add opportunities, however.
“This particular pocket of the submarket has been operating at cyclical lows, as it took on too much supply,” says Tim Burns, ALR’s principal. “Effective rents are just starting to come back, and we feel like we’re buying at the bottom of the rents with this acquisition.”
To support the value-add opportunity, ALR will make minor upgrades to the complex, the first that have been made since it was completed in 1998. Capital improvement plans include clubhouse renovations, pool and interior unit upgrades and landscape enhancements. The asset, which sits on 23.4 acres, will be managed by company subsidiary ALR Properties Company LLC.
Burns says the plan is to continue buying in Texas and Arizona, as well as the southeast. “We’re driven by where we think economic growth and jobs will be,” he tells GlobeSt.com. ALR is seeking assets between 10 and 15 years old in primarily suburban locations, and that haven’t had upgrades. Burns says ALR closed on six deals during the past 16 months. Within the last year, the company has acquired Stone Mist Apartments in Houston and bought an $8 million debt belonging to St. Charles Executive Center in St. Charles, IL.
ALR’s plan is to close two or three more deals by the end of 2011, though Burns acknowledges that doing so will be a challenge. “It’s a pretty competitive landscape out there for multifamily,” he says.
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