DEAL OF THE WEEK
Radco buys complex as multifamily market picks up
The Radco Cos. has acquired a fifth Houston apartment property, bringing its local portfolio to nearly 1,700 units, as the climate for multifamily investments heats up.
The Atlanta-based real estate acquisition and redevelopment firm has purchased the 278-unit Champions Village complex at 12811 Greenwood Forest Drive from Redwood-Kairos Real Estate Partners.
Built in 1978, the northwest Houston community consists of 27 two-story buildings on 10.6 acres. Renamed City Gate at Champions, the complex will undergo a $4 million upgrade, or approximately $14,500 a unit, Radco said.
Multifamily property sales have picked up the past few months, and the second half of the year is projected to be even stronger as more higher-end complexes change hands, said Ryan Epstein, senior managing director of Berkadia.
“It’s almost like a light switch went on in January where Houston was no longer the odd man out in all the places to invest,” Epstein said.
So far in 2017, nearly $1.6 billion in multifamily properties has changed hands in the Houston area, according to Real Capital Analytics. The amount compares with $5.5 billion in sales in 2014.
In one of the bigger deals, Abbey Residential Services acquired the 396-unit Modera Spring Town Center apartments in Spring from Mill Creek Residential.
Houston-area apartment rents are below peak levels of 2014, so investors can forecast rents coming back up as Houston’s economy improves and the supply of new units diminishes, Epstein said. Markets such as Dallas and Austin, by contrast, are seeing rents at peak levels.
Radco Cos. will apply a formula it has used at its other complexes, making improvements to the buildings’ exteriors, landscaping and common areas. Upgrades in cabinetry, appliances, flooring, lighting and paint are planned inside the units. Other work includes a new fitness center, a clubhouse remodel, and improvements to the pool, picnic and grilling areas.
Other properties in the Radco portfolio consist of City Terrace, 122-unit at 1015 Country Place Drive; City Station, a 448-unit community at 905 Cypress Station; City Crossing, a 458-unit complex at 12800 Woodforest in east Houston; and City Chase, a 366-unit complex at 2475 Gray Falls near Westheimer and Kirkwood.
“Radco has an established footprint in Houston, and we are very bullish on the potential for growth in the area,” Norman Radow, founder and chief executive officer of The Radco Cos., said in an announcement.
“City Gate at Champions is an important addition to our portfolio, and both its acquisition and our investment to improve it further emphasize our confidence in the Houston market.”