HOUSTON – Dallas-based Performance Properties has kicked off a quest to acquire Houston multifamily properties with the recent purchase of the 300-unit Timberwalk Apartments in northwest Houston.
Performance Properties principals Todd White and David McQuaid stated their goal is to buy 1,500 units in Houston in 2017.
Located on 10.2 acres, Performance Properties’ Houston project, 5635 Timber Creek Place Drive, is 93 percent leased. The seller was Mosaic Residential.
The buyer – a Performance Properties-led partnership called Timberwalk Associates LP, expects to invest $1.2 million to finish a renovation started in 2014 by Mosaic Residential. The upcoming work includes completing unit upgrades and tackling improvements to building exteriors, the swimming pool, fitness center, clubhouse, courtyards and the balance of common areas on the 10.2-acre property.
Completed in 1984, Timberwalk is part of a micro-market of 1980s-era multifamily properties in a high-growth corridor that hasn’t been overly impacted by Houston’s cyclical energy industry.
“We believe Houston is just hitting the bottom of the cycle,” McQuaid says. “Our strategy is to take advantage of the perceived weak Houston economy and create the most value we can for our investors.”
The value-add strategy is directly pointed at Timberwalk’s below-market average rent, which is $845 per month. The neighboring properties’ average monthly rent is $934.
“This is a proven market for upgrades. It’s pretty easy to see the upward trending,” White says. “We are going to finish the rehab program and continue to push the rents.”
Performance Properties financed the acquisition through Dallas-based Independent Bank, which was arranged by in-house loan officers Mark Wells and Scott Grant. Mosaic Residential was represented by the ARA Newmark team of Russell Jones, Matt Saunders and Zach Springer.
The apartment complex features 27 two-and three-story residential buildings and 568 parking spaces.
April 10, 2017 Realty News Report Copyright 2017