July Residential Lands Financing for Texas Portfolio

Terrace at West Sam Houston

July Residential has secured acquisition financing for its purchase of a 1,275-unit multifamily portfolio in Houston. Voya Investment Management originated the four-year loan with one 12-month extension at a loan-to-value ratio of 75 percent with 100 percent future funding for CapEx. Berkadia’s Mitch Sinberg, Matthew Robbins, Abigail Beauchamp of the company’s Boca Raton office secured the financing on behalf of July Residential.

The portfolio comprises five communities in Southwest Houston that were built between 1976 and 1983. All of the communities are located near major employment centers and retail shopping destinations.

The properties in the Houston portfolio include:

• The 178-unit Airport Crossing with 11 two-story buildings in a garden-style layout. The community was built in 1983 and offers one- and two-bed units that range from 550 to 1,010 square feet.
• The 73-unit The Townhomes, which was built in 1981 with 16 two-story townhome buildings. The buildings offer one- and two-bed apartments that range in size from 686 to 1,010 square feet.
• The 428-unit Terrace at West Sam Houston that has its units spread throughout 29 two-story buildings. Built in 1979, the community offers one- and two-bed units that range in size from 450 to 1,000 square feet.
• The 268-unit Casa Grande that was built in 1979 and offers one- and two-bed units from 450 to 981 square feet throughout 18 two-story buildings.
• The 328-unit Plaza at Hobby Airport made up of 22 two-story buildings that offer one- and two-bed units ranging from 565 to 964 square feet. The community was built in 1976.

Growing Demand for Class B Properties

The Houston portfolio is an excellent opportunity to implement a full-scale value-add program, Sinberg said in prepared remarks. In addition, there was a lack of supply alongside consistent rent growth in the submarkets that these communities were located in, particularly for Class B assets.

With the Houston acquisition, July Residential has purchased more than 1,500 units since the start of the COVID-19 pandemic. The company’s portfolio includes garden-style, mid-rise, mixed-use and new development residential projects in Maryland, Florida, California, Washington, D.C., and now Texas. July Residential is also planning to continue pursuing additional multifamily acquisitions specifically in the Sunbelt and Mid-Atlantic regions of the U.S.

In May of last year, Sinberg along with Managing Director Brad Williamson secured $14.3 million in acquisition financing for a 192-unit community in College Station, Texas.