Our frothy multifamily market is attracting a lot attention, with a whopping 60% of deals now coming from out-of-state buyers, Marcus & Millichap VP investments Al Silva tells us. (And here we thought all these folks were coming into town to see Sherlock Holmes at the Dallas Theater Center.)
Al, right, with Marcus & Millichap Fort Worth regional manager Bill Jordan, says usually when the market is ramped up, out-of-state buyers flock here to take advantage of the prices. (It's how they all maintain their airport VIP lounge privileges.) But Al says, this time around, local owners and operators are staying engaged in the investment sales market and winning many deals. That's a good sign, he says, because it shows that local owners believe in the market fundamentals. They’re staying competitive on pricing by offering super tight transaction terms like short inspection periods and no financing contingencies.
That’s a trend he thinks will persist. Two of the three deals he recently closed were bought by Texas buyers, he tells us. A Texas LLC purchased the 176-unit 90% occupied Notting Hill Apartments in Hurst. It received eight offers within three weeks and closed 45 days after going under contract. He also sold the 116-unit Candle Chase Apartments in Fort Worth to a Texas buyer. The property attracted multiple offers in its only week on the market and closed after the existing loan was assumed by the buyer. It was a distressed property (70% occupied) at closing. The new owner plans to make major improvements to the asset and completely reposition it. Al repped the buyer and seller in both deals.
A California LLC purchased the 200-unit 95% occupied Woodstone Apartments in Fort Worth from the Canadian-based The Ergas Group (Al repped both). The property attracted 10 offers within a month and closed in about 60 days of going under contract. The new owner placed a new 10-year Fannie Mae loan on the property and plans to make both exterior and interior improvements. Al has three deals under contract for 800 units across DFW right now. When he’s not putting owners in new apartment deals, he and his wife, Erin, are chasing around two pre-schoolers: 3-year-old Stella and a 20-month-old Adam.