Lubbock apartment investment firm ‘bullish on Houston’
On the heels of a big acquisition in CityCentre, Madera Residential purchased another apartment property in an affluent area of Houston near the Texas Medical Center.
Madera, a Lubbock-based investment company, has acquired Alexan Southside, a 270unit complex at 4139 Bellaire Blvd. in the city of Southside Place. The four-story complex was developed in 2017 by Trammell Crow Residential and Bluerock Residential Growth REIT.
“Right now is just a great time to be buying,” said Charles Young, a partner at Madera. “We’re super bullish on Houston and where it’s going to go over the next five years.”
Houston is projected to be among the top cites for job growth and population growth, Young said.
The purchase comes as apartment rents are expected to recover in 2021 after softening during the pandemic.
Rents in the Houston region are projected to go up by 1.5 percent in 2021, according to ApartmentData.com. They fell by 1.7 percent in 2020 after three years of increases. Rents for Class A apartments, which tend to be newer and in the nicest areas, fell 6.7 percent during the pandemic, according to ApartmentData.com.
Young said occupancy was improving across Madera’s portfolio and the company is offering fewer concessions, such as free rent, at some properties.
“We are starting to see healing in the market,” he said. “You can just feel we’re about to get a nice boost coming out of the second half of the year.”
The value of the Alexan South
side acquisition was not disclosed. PCCP, a real estate finance and investment management firm, provided a $30 million senior loan to Madera for the purchase. The company recently provided an $86.3 million senior loan for the acquisition and renovations of the Domain and Lofts at CityCentre apartments in west Houston.
Madera’s purchase of the 370-unit Domain and 250unit Lofts at CityCentre apartments at 811 Town and Country Blvd. in Houston was one of the largest portfolio transactions in the nation the first quarter, according to Real Capital Analytics.
Apartment transactions in the Houston region totaled $1.28 billion in the first quarter, down 3 percent from a year ago, according to the real estate data firm.
Ron Bonneau, managing director with PCCP, said the Alexan Southside property should benefit from the continued growth of the surrounding area. It is next to Southside Commons, a redevelopment of the former Palace Bowling Lanes that includes medical office, restaurant and retail space.
“Alexan Southside benefits from a core, infill location within Houston between the affluent neighborhoods of Southside Place, West University Place and Bellaire and is less than three miles west of the Texas Medical Center,” Bonneau said.
Madera, which bought its first project in 2008 in Baytown, owns and manages 14,000 units in Houston and Dallas-Fort Worth. Its portfolio includes The Pierpont in Spring across from Springwoods Village, where HPE is relocating its corporate headquarters.
Alabama home builder enters the market
Davidson Homes, a homebuilder based in Huntsville, Ala., will begin building homes in the Houston area as its entry to the Texas market.
The privately-owned company, which targets first-time and move-up buyers, has tapped Jim Rorison to lead its Houston operations as division president. Davidson has deals in the works for 329 lots in the Houston region where it plans to begin building homes by July.
Among its first projects, Davidson has 90 lots under contract in Sierra Vista, a Land Tejas community in Iowa Colony. Homes in Sierra Vista will start in the $300,000s.
The company has started developing a community of 40 duplex homes starting in the low $200,000s at FM 529 and Fry Road in Cypress.
In addition to building homes for sale, Davidson will also work with its partner EverGreen Living to identify opportunities to build houses for the rental market in Houston, Rorison said.
Davidson develops suburban communities in Alabama, Georgia, North Carolina, Tennessee and Texas. The company, which owns or controls more than 8,000 lots in 62 communities, reported 630 closings in 2020. The company was founded in 2009 by CEO Adam Davidson.
Younan Properties buys another office building
Los Angeles-based Younan Properties expanded its Houston-area holdings with the purchase of Royal Oaks Centre.
The 232,000-squarefoot, 10-story building is at 11490 Westheimer in Westchase. Amenities include a conference center with seating for 40 and a putting-green at the back entry. The seller was Hertz Investment Group.
The acquisition follows Younan’s recent purchase of Two Westlake Park, a 455,000-square-foot office building in the Energy Corridor.
“We are highly active in the Houston market due to the current market cycle and upside potential during the recovery,” Younan CEO Zaya S. Younan said in an announcement.