Aspen Cos Snaps Up $23M Affordable Housing Portfolio
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Class-B and C properties are a reliable investment; there will always be need for them. But for Aspen Cos, they're the cornerstone of a business that seeks to improve not only the lives of the inhabitants, but the entire neighborhood. And their strategy is working.
Last week, Aspen Cos acquired two multifamily Section 8 properties in Texas for $23.1M. The new portfolio consists of 334 units: Ridgecrest Terrace Apartments in Dallas has 250 units, and Central Village Apartments in Plainview has 84.
Managing director Adam Mermelstein tells us owning HUD-subsidized properties in a major market like Dallas offers the company a chance to preserve some much-needed affordable housing while also capturing some upside of a growing multifamily market where rents are well above the national average.
Aspen’s acquisition of the two Texas properties will be followed up with large-scale renovations. He told us the city was easy to work with, living up to its reputation as a very business-friendly metro.
There is a shortage of affordable housing–and strong demand for it. Adam tells us all of Aspen’s properties have waiting lists.
Adam says the company’s strategy is to buy Class-C buildings that were built in the 1960s and 1970s. After 30 or 40 years of turnover, they’ve endured severe wear, so Aspen likes to renovate them up to Class-B. Doing so has changed neighborhoods, Adam says.
In Raleigh, NC, Adam can see the strategy working. Prices are climbing because there is a CBD with lots of commerce and urbanization, and good universities. But just a few blocks away from that hub, in areas that had fallen into disrepair, some of Aspen’s projects are reviving neglected neighborhoods and bringing those areas onto the map.