Bascom Group Buys Houston Asset

The 150-unit property is the company's fourth purchase in the city in less than a year.

Windwater at Windmill Lakes. Image courtesy of The Bascom Group

The Bascom Group is expanding its Texas holdings with the acquisition of the 150-unit Windwater at Windmill Lakes community in Houston—the fourth Houston purchase in nearly 12 months. The deal marks Bascom’s 39th multifamily property closed in Texas.

The firm did not disclose the seller or the price it paid for the asset. Built in 1999, Windwater at Windmill Lakes is located at 9757 Windwater Drive in the southeast Houston submarket.

John Carr of Cushman & Wakefield represented the unidentified seller. Huntington National Bank provided the debt financing for the acquisition, which was arranged by Jason Pumpelly of Cushman & Wakefield. SD Cap Construction Management will provide construction management services and Cushman & Wakefield will provide property management. James D’Argenio and Chang Liu sourced and managed the acquisition for Bascom.

Liu, acquisitions director for Bascom, said in a prepared statement the acquisition aligns well with the firm’s Texas strategy of acquiring newer vintage assets with minimal deferred maintenance and major value-add potential. Although well maintained, Bascom officials said the units are all in original condition which will provide a value-add opportunity to reposition the asset.

Jason Hanna, senior vice president of operations, stated the property offers characteristics that are attractive to today’s renters, including large floorplans and ample community space. He said Bascom can elevate the interior design to match current modern standards and offer a boutique rental product in the submarket.

Windwater at Windmill Lakes has one- and two-bedroom floorplans ranging in size from 669 square feet to 1,088 square feet. Apartment amenities include full-size washers and dryers in every unit, oversized walk-in closets and 9-foot ceilings with crown molding. The property offers covered parking and garages as well as patios and balconies. Community amenities including a pool with waterfall and beach access and fitness center. The property is minutes from I-45, Beltway 8, Baybrook Mall and numerous restaurants. There are also nearby jogging and biking trails and a park within walking distance.

Growing Demand

Demand in the Houston multifamily market accelerated dramatically in the second half of 2021, according to Bascom. Houston is expected to have the third largest employment growth in the United States from 2021 to 2026 and is expected to see the largest population gain in the U.S. during the same period.

On a trailing three-month basis through October, Houston rents were up 1.3 p ercent to $1,231, according to the Yardi Matrix Fall 2021 Houston Multifamily report. On a year-over-year basis, the average rent was up 10.3 percent. Sales activity was intense in the first 10 months of 2021 with investors reacting swiftly to improving market conditions. A record $6.8 billion in multifamily assets changed hands in Houston during that period. Yardi Matrix noted investors focused mainly on Lifestyle properties, which brought the average price per unit to $141,313, up 20.3 percent from 2020.

Earlier Deals

A private equity firm that specializes in valued-added multifamily, commercial and non-performing loans and real estate related investments, Bascom has completed more than $20.7 billion in multifamily and commercial value-added transactions since 1996. The firm’s transactions include more than 350 multifamily properties containing more than 90,000 units across the U.S.

In January, Bascom acquired a multifamily portfolio in Los Angeles for $52.5 million from NMS Properties, according to Yardi Matrix. The adjoining properties total 128 units and are in the city’s Northridge neighborhood in the Central San Fernando Valley. In December, a partnership between Bascom, East Hill Capital and Leste Group paid $68.5 million for Enclave at Lake Ellenor, a 320-unit property in Orlando, Fla.

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