Nitya Capital ‘more open’ to Class A apartments
Nitya Capital, a Houston investment firm led by Swapnil Agarwal, has purchased the 510unit City West Apartments at 2828 Hayes Road in Westchase from Goldman Sachs.
The 1990s-era community represents the first of a newer vintage of apartments Agarwal is targeting, as the supply of Houston’s older, so-called Class B and C projects has largely been snapped up by investors. The company has acquired 26 properties in the Houston area and four in Dallas since 2014.
“We’re much more open to doing Class A assets now,” Agarwal said.
City West, a sprawling collection of three-story buildings south of Westheimer outside Beltway 8, has large apartments, averaging 980 square feet with 10foot ceilings. Amenities include a gym, three swimming pools, a dog park, clubhouse, picnic area and volleyball court.
Current rents of about $1.16 per square foot per month will be brought up, over time, to the levels of comparable communities in the $1.25 to $1.30 range, Agarwal said.
By comparison, the bulk of Nitya Capital’s 9,021-unit portfolio of communities built mostly in the 1970s and 1980s gets monthly rents from 95 cents to $1.05 per square foot.
Last year, complexes built in the 1970s and 1980s comprised 60 percent of Houston-area apartment sales, according to Colliers International. Only 22 properties less than 10 years old changed hands, down from 32 in 2015 and 35 in 2014.
“While institutional investors turned away from Houston due to the instability of the oil markets, private capital firms continued their buying spree of Class B and C assets that were in need of light to heavy remodeling,” said Matt Guse, senior vice president, multifamily at Colliers International.
In the newly acquired complex, Nitya Capital will apply the same formula it has used in its other investments. That includes making upgrades to boost the rents while streamlining costs by handling marketing in-house and negotiating better utility contracts. Its Karya Property Management affiliate will manage the apartments.
Residents will have the option of renting “classic” units or paying about $120 more per month for upgraded units with new granite counters, stainless steel appliances, new floors, two-tone paint and new cabinet fronts, Agarwal said.
Agarwal’s efforts in growing and managing Nitya Capital’s portfolio have gained recognition. He’s a finalist in EY’s Entrepreneur of the Year 2017 Award to be announced in June.