Buchanan Partners Acquires Houston Community

Buchanan Capital Partners has acquired the 264-unit Crenshaw Grand Apartments in suburban Houston from MLG Capital. The deal was an off-market acquisition of the property, originally developed in 2016.

The Austin-based investor didn’t specify the price for the garden-style community, but Buchanan assumed the outstanding balance of a 2018 Freddie Mac CMBS loan associated with the property in the amount of $23.1 million, Yardi Matrix reports.

Buchanan Partners founder, Keith Buchanan, said that the recent acquisition was at a 25 percent discount to replacement cost. In 2018, MLG Capital bought the property from the Michaels Organization for an estimated $30.8 million, Yardi Matrix shows.

The 12-building property, located on approximately 14 acres, offers one- and two-bedroom units. The community straddles the Pasadena and Clear Lake submarkets in greater Houston.

Crenshaw Grand Apartments, which has an average unit size of 840 square feet, is 91.3 percent occupied, according to the same data. Unit amenities include high ceilings, balconies/patios, a washer/dryer and high-speed Internet. Common amenities include a fitness center, clubhouse, swimming pool and 528 parking spaces. Covered parking, and detached garages, are available for an additional fee.

Buchanan has also started work on two ground-up apartment developments: one in Texas and the other in Colorado. With Alliance Residential Co., the company is developing a 390-unit apartment community in New Braunfels, a rapidly growing city along Interstate 35 between San Antonio and Austin. With The Garrett Cos. and Telis Group, Buchanan is developing a 196-unit apartment community in Colorado Springs.

Houston housing stays strong

While the Houston multifamily market isn’t experiencing the same boom as it has in recent years, its fundamentals are still healthy, according to Yardi Matrix’s latest Houston multifamily market report. Asking rents posted a 0.2 percent year-over-year increase, to $1,355, as of May.

Occupancy in stabilized Houston properties dropped 90 basis points year-over-year as of April, to 92.5 percent, the report notes. Demand was down more among renters by necessity than renters by choice.

Houston has a healthy enough job market to support demand for apartments, Yardi Matrix explains. In the 12 months ending in March, the metro employment market expanded by 2.7 percent, or 67,800 net jobs, putting the area at third among major U.S. metros, behind Las Vegas and Austin. The jobless rate fell to 3.8 percent in April, which was the lowest figure since the onset of the pandemic.