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Dallas-Ft. Worth
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Marcus & Millichap National Multi-Housing Group's Michael Ware, Nick Fluellen and Will Jarnigan
The highly discounted deals that everyone hoped would swing their way (the ones they're searching for under every stone) aren’t really happening. Marcus & Millichap National Multi-Housing Group Michael Ware, director Nick Fluellen, and Will Jarnigan, tell us the special servicers aren't opening the flood gates of distress. But that’s bolstering the industry to a degree and  allowing time to work things out rather than have a fire sale. Michael says the smaller deals  are the ones moving because there are more buyers that can pay all cash. They do more private middle-market assets with Class B and C  assets. Yields, he adds, are being driven down on Class A properties because of competition. Also, we hear that pendulum is leaning in the Rangers' favor, though Nick may have helped guide it (he's a former batboy for the team).
West Amherst Apartments
M&M closed on the West Amherst Apartments (above) at the end of September. The 44-unit property between Inwood and the Dallas North Tollway, sold with 12 other properties that were in receivership for three years due to a partnership issue. This property was the  last sale to close out the partnership. No price was disclosed. Nick says 2009 was probably the low point  across the board for transactional velocity. Freddie and Fannie have historically low interest rates right now, but with that attractive financing comes a bigger emphasis on the borrower, he says. Buyers are getting aggressive in the Class A and B realm. Cap rates have been compressed and with mid-4% interest rates, buyers are stretching a little more, Nick adds. He says the hardest product to sell is stabilized Class C because of the ability to buy distressed C assets so inexpensively. “If you can buy a Class C deal for $10k a unit, you might be all in it for $15k per unit by the time you get it stabilized as compared to buying an asset for $25k a unit that is stabilized from day one,” Nick says.
 
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Michael says better yields, corporate relocations, and population growth are attracting an increasing amount of out-of-state investment capital. Nick—who's juggling more than baseballs—has two deals in escrow from unrelated buyers in Chicago and is working with a colleague in Florida on another. Overall, we’ve had more people interested in deals, more investors wanting to tour the real estate, and certainly a lot more offers,” Nick tells us. We’re missing a lender like LaSalle in the marketplace, he says, someone that will look at the deal and the borrower, and maybe take more of a chance with borrowers that have good net worth, good liquidity, and management. Nick is adding a little sister for his two boys next February. Will has a new addition to his family, too: a chocolate lab puppy. He and Michael both spend their spare time hunting and fishing.