L.A. Investor Acquires Houston Apartment Complex, More in the Works
- Mar 18, 2008
Taking advantage of Houston’s growing employment base and a high vacancy rate, Los Angeles-based Post Investment Group L.L.C. has purchased an almost 2,500-unit apartment complex in the city for an undisclosed price in a joint venture with a New York-based private equity firm. The 2,469-unit Broadway Square Apartments (pictured) is situated on a 69-acre lot directly adjacent to Houston’s Hobby Airport. “This is our second acquisition in Houston and we have several other properties that may soon be under contract,” Jason Post, Post Investment Group president, told CPN today. “We are heavily drawn to the huge employment and population growth in Houston, in addition to the attractive cap rates compared to the L.A. rates.” Post is not disclosing the total deal capitalization, though it is considerably below market comparables. The property was purchased from the estate of original owner and developer Harold Farb. Post was able to price and secure the asset at one of its lowest occupancy rates in 32 years, at just 78 percent, thus the discount to market. The property has historically been 93 percent occupied and Post took delivery at an 86 percent leased rate. Houston’s apartment market is expected to stay on solid ground this year, as job growth continues to be above the national average, according to a report by Marcus & Millichap Real Estate Investment Services. The report projected Houston’s investment climate to remain positive this year, as a mix of out-of-state and local buyers look to take advantage of cap rates in the mid-7 percent to mid-8 percent range. Post Investment Group is a real estate investment firm focused on the acquisition of multi-family assets nationwide. The company specializes in both core plus and value add investment opportunities capitalized through private and institutional investors.