Commercial brokerage firm Marcus & Millichap has brokered the $58.9 million sale of three multifamily communities in the Dallas-Fort Worth area. The properties are The Meadows, a 120-unit community in Lancaster; Newport Landing, a 185-unit property in the Lake Highlands area of Dallas; and Monterrey, a 106-unit property in Fort Worth. The Silva Braly Team of Marcus & Millichap represented the three different sellers and procured the buyers after competitive marketing processes in all three transactions.
“The main challenges we encountered on the properties were all related to the volatility and changes that we’ve recently experienced in the capital and debt markets,” Al Silva, Marcus & Millichap Fort Worth office senior managing director investments, told Multi-Housing News. “This caused a slight downtick in buyer activity and a reduced number of aggressive offers. Then we encountered higher-than-expected interest rates and lower-than-expected loan proceeds from the lenders as we navigated the escrow process.”
Despite this, the firm still had multiple solid offers from qualified purchasers on each project, and was able to navigate each one to a successful closing. “And we did this without having to renegotiate any of the terms from our original contract for all of these offerings,” Silva reported.
The Meadows affords the purchaser an opportunity to greatly increase net operating income, as long as select exterior improvements are undertaken and the unit enhancement package launched by previous owners is implemented. Situated in one of the most coveted enclaves in Dallas, Newport Landing affords the purchaser substantial rental and operational upside, Silva added. The third property, Monterrey, is an apartment community that enjoys high occupancy and minimal proximate rental rivalry from other communities, and as such should present the new owners with solid gains.
“We worked closely with the asset management team and seller for each property during the escrow process to make sure property operations were constantly improving, which helped us mitigate the reduction in loan proceeds and mostly maintain the return profiles expected by each of the buyers,” Silva said.
Last month, Related Cos. acquired a Dallas-Fort Worth property.