Multifamily's Attracting Hard Money & Condensed Timelines
DFW’s multifamily market continues to go gangbusters; good deals are moving fast, says Marcus & Millichap national multi-housing group associate director Michael Ware. He tells us some deals don't make it to market as buyers make compelling enough offers for the sellers to forgo a marketing process. With multiple proposals in the works, Michael says activity appears to be picking up in the last month, largely driven by the area’s demographics and corporate relocations. Rents keep moving up, jobs and people keep coming our way, so the capital keeps flowing in, he says. That’s Michael with national multi-housing group director Will Jarnagin on a recent fly fishing trip to Colorado with friends and clients.
Michael, Will and senior associate Stephen Crittenden repped the seller (a fund manager) and the buyer (a local developer) in the sale of the 159-unit Los Colores at 1516 North Peak St in Dallas (above). Will tells us the new owner intends to redevelop one section of the portfolio into a four-story apartment complex and another section into luxury townhomes. Stephen tells us this site, in old East Dallas, will likely be part of the gentrification trend there with the potential to entice additional repositioning efforts in the immediate area as investors seek to increase their rental income. Second, if more assets are repositioned from Class-C to -B, a potential shortage of Class-C communities could arise as the demand for this product type has remained constant.
Will tells us they’ve closed several deals in the past few weeks and have more in the works. The 720-unit Windridge (pictured) was bought off-market by an out-of-state buyer from an out-of-state seller. The seller paid a prepayment penalty and offered it to the buyer free and clear. They also closed—with a local buyer and local seller—on the 146-unit Pioneer and Executive in Irving with three offers in the first week. The pair also has 520 units under contract across three properties in the Metroplex and a 588-unit Wichita Falls deal about to go under contract. Michael tells us there’s not a lot of free time (he also has a toddler and a new baby at home), but he and Will just inked a 3,800-acre hunting lease near Seymour in conjunction with North Texas Contracting for clients (of course).