(Read more on the multifamily market.)
HOUSTON-The Geneva Organization, seeking value-add opportunities, has picked up the 307-unit Parkgreen Apartments and 348-unit Parkway Apartments in unrelated transactions. Class C assets are fetching $20,000 to $25,000 per door.
The Minneapolis-based Geneva Organization plans to put an additional $4,000 per unit into upgrading and repositioning the assets to class B statuses. Steve Person, senior vice president of acquisitions for Geneva, says the improvements and subsequent rental increases should be done in 12 to 24 months.
Although the assets are side by side on a 15-acre tract, Geneva acquired them from separate sellers. Parkgreen Apartments at 8100 Bellaire Blvd. was sold by Daniel Lau of Houston. The seller of record for Parkway, located at 6601 Harbor Town Dr., was Houston Parkway Apartments LP of nearby Sugar Land.
“We ended up buying the two together, on the same day, and with one loan,” Person tells GlobeSt.com, adding that financing came from Prudential Real Estate Affiliates Inc. of Irvine, CA. Nancy Belin of Grandstone Corp. of Des Moines arranged the debt.
Person says Geneva will run the 85%-leased complexes as a single property, but a name change isn't planned right now. Geneva plans a three-to five-year hold.
The complexes, built in the late 1970s and early 1980s, have one- and two-bedroom units averaging 638 sf. The monthly rents range from 58 cents per sf to and 74 cents per sf.
Person says that with the Houston market fundamentals so strong, Geneva would like to collect a few more value-add deals in the area to add to its current Houston holdings. “We're in the B and C realm and we like economies of scale,” he says. “We also like the fact that renters aren't leaving like they used to in order to buy houses.”
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