AREA-Wood JV Purchases Texas Apartments
- Jan 12, 2011
January 12, 2011
By Barbra Murray, Contributing Editor
Texas is the target as AREA Property Partners and Wood Partners join forces to purchase a nine-property apartment portfolio encompassing 2,589 residences in three major cities.
Dallas/Fort Worth is home to five of the apartment communities, three are located in Houston and the remaining property is in San Antonio. All nine were developed between 1997 and 2007. The portfolio’s average occupancy level is 96 percent, a noteworthy figure given that the national average is 6.6 percent, according to a fourth quarter 2010 report by commercial real estate market information and analysis firm Reis Inc.
“The Texas markets are all exhibiting strong job growth and new household formations,” Jay Jacobson, director of national acquisitions for Wood Partners, told CPE. “The locations we bought are almost irreplaceable and will perform very well long term.”
The nine apartment properties offer a range of coveted amenities, including close proximity to golf courses, for instance, and state-of-the-art fitness facilities. Additionally, according to Jacobson, “The portfolio needs almost no upgrades or repairs.”
Neither AREA nor Wood Partners has disclosed the name of the portfolio’s seller or the amount paid for it, but Jacobson did put the financial aspect of the transaction in perspective. “The purchase price was about 10% below replacement cost,” he said. The two companies have had a solid relationship and the resulting synchronicity was just one factor that allowed them to perform due diligence and underwrite the acquisition in a timely fashion. “Wood Partners’ local expertise and the experience level of the team along with that of our partners helped expedite the process. The exceptional asset quality also helped.”