HOUSTON-The offering of the 1,222-unit multifamily portfolio involving five properties in Houston and Conroe brought many potential buyers out of the woodwork. Though Abbey Residential ended up with the class B properties, it had to beat out nine other bonafide bidders for the deal. And that didn't count the additional 30 or so one-off bids.
"These were competitive and sought after," explains Ryan Epstein a senior vice president with CBRE, who represented the portfolio's seller. "This gave someone the opportunity for good quality B assets in one of the fastest-growing markets in the country." He explains that the properties were built in the mid-1980s, with portfolio occupancy at 95%.
Though Epstein declined to name the seller, records show that Archon LP of Irving, TX was the former owner. Epstein did tell GlobeSt.com that the seller had acquired the apartments in different deals during the past few years and that the properties' sale was part of its overall business plan.
"They did some deferred maintenance and did a lot of exterior work," Epstein says. "They didn't touch the interiors. They left that step for the new buyer." Abbey Residential plans extensive interior renovations and will rebrand all the properties under the Abbey name.
Epstein says the portfolio attracted a wide range of buyers, from a private REIT, to syndicators, to private equity, to wealthy individuals. One-off bids were receives as were portfolio bids; ultimately "the seller decided it wanted a portfolio sale, rather than five different sales," Epstein says.
The portfolio consists of:
- Ridge at Willowbrook, 8330 Willow Place Dr. S., Houston
- Woodedge, 10802 Green Creek Dr., Houston
- Aston Brook, 14101 Walters Rd., Houston
- Stone Ridge, 231 Interstate 45 N., Conroe
- Cimarron Park, 2201 Montgomery Park Blvd., Conroe
Multifamily portfolio sales aren't uncommon in Houston, but Epstein acknowledges there's been more portfolio activity recently. "We're coming to that part of the cycle in which groups that were able to hang onto their properties are seeing good pricing opportunities and are exiting," he says.
Additionally, many funds that own these portfolios are expiring in the near future. "A lot of these funds were launched in 2005, 2006, 2007," Epstein says. "Most of the funds are five-to-seven-year funds; as they expire, we're going to see more product on the market."
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