29th Street Capital has acquired Limestone Apartments, a 438-unit apartment community in Houston, Texas. The deal marks the firm’s ninth acquisition in the city and its second investment in the last six months.
“This is a newer, high-quality asset in a growing submarket,” Doug Burt, 29th Street Capital’s vice president of acquisitions in Houston, said in prepared remarks. “Limestone will benefit from the expected population growth of 9 percent within a five-mile radius over the next five years, and lack of new supply coming to the market.”
Located at 14723 W. Oaks Plaza St. in West Houston, the community was constructed in 1999 and its value-add opportunity was a major appeal of the sale. The Lynd Co. was the seller, according to Yardi Matrix data.
29th Street Capital will implement an extensive capital plan, which will include upgrades to the interiors such as the addition of granite countertops, black appliances and new cabinets. There will also be exterior renovations aimed at landscaping, signage and amenity improvements.
The property is nearby the Shell Technology Center, home to nearly 2,000 scientists, technologists, engineers, and support personnel. The Limestone Apartments also sits just five miles south of the Houston Energy Corridor via Interstate 6. In 12 years, that corridor is projected to tally more than 5.2 million square feet of office/mixed-use space.
Growing Demand in Houston
Recent research by 29th Street Capital found that the city’s Class A apartment market is greatly in demand thanks to improved fundamentals following a period of decreasing occupancies and increasing concessions brought on by a heavy development pipeline.
In fact, the most recent U.S. Census Bureau ranked the Houston metro region second in the U.S. for population growth in 2018. In addition to that, the city is the nation’s top performer in employment growth.
“Houston is expected to receive its lowest number of new units in nearly a decade,” Burt said. “We feel that the market has finally leveled out allowing a clear runway over the next few years.”
Over the past years, 29th Street Capital has purchased 18 conventional multifamily assets throughout the U.S., and its multifamily portfolio stands at more than 8,450 units.
Earlier this month, the firm acquired a two-property portfolio in Brandon, Fla., for $27.6 million from Highgate Capital Group. The 112-unit The Park at Avilla traded for $15.9 million, while the 88-unit The Park at Pienza changed hands for $11.7 million.
Image courtesy of 29th Street Capital