Investors discover opportunity in older apartment complexes
Austin-based PPA Group has made its first major Houston acquisition with the purchase of Cypress Ridge Apartments, a 252-unit complex at 2331 Bammelwood, from CrestMarc.
Upgrades to the 1980sera north Houston apartments are planned, and a soccer field will be built.
“Lots of national investors are shying away from Houston because of the downturn in the oil industry, which creates a great opportunity for us,” PPA Group chief information officer John Latham said in an announcement.
PPA Group is among a number of Texas investors drawn to older Houston properties where rental demand remains strong and updates can yield higher rents.
Since 2015, investors have paid an average of about $75,000 per unit for older Class B and Class C properties in the Houston area, according to Marcus & Millichap. That’s roughly half the per-unit price of the newest and nicest Class A apartments, a sector that’s seen the biggest drop in sales velocity since peaking in 2013.
In other recent deals, Austin-based Angelus Capital bought the Maxey Village Apartments at 666 Maxey Road in east Houston. Built in 1974, the property consists of 409 units in 10 two-story buildings. NorthMarq Capital arranged $17.6 million in financing.
In the Champions area, Clearworth Capital, a joint venture made up of the principals of Dallas-based Seneca Investments and Houston-based NOIPM, has acquired the 177-unit Ponderosa Apartments at 17033 Butte Creek Road. Built in 1979, the property is made up of 17 two-story buildings and a recently remodeled clubhouse on 6.9 acres. Extensive renovations are planned for the property, which will be managed by NOIPM.
In League City, Fort Worth-based Crescent Real Estate plans further upgrades to the Riverbend apartments, the first local asset to be acquired through its new GP Invitation Fund I. It bought the recently renovated 192-unit community at 301 N. Wesley from Crossbeam Concierge, which will continue to manage the property, and its institutional partner in a portfolio deal.
In Westchase, locally based HK Capital Management bought the Aberdeen Apartment Homes at 3400 Woodchase from an affiliate of Kohlberg Kravis Roberts & Co., according to commercial real estate database firm Enriched Data.