JLL Closes Sale of HUD-Financed Luxury Asset

According to Yardi Matrix data, RED Capital Group originated a nearly $27 million loan in 2016, with the maturity date set for 2058.

JLL Capital Markets has closed the sale of 1271 San Marcos, a 240-unit, Class A, HUD-financed asset located in San Marcos, Texas, some 32 miles south of Austin. JLL Managing Directors Greg Austin and Scott LaMontagne led the sales and marketing efforts on behalf of the sellers, Covenant Development and Parkcrest Builders.

The eight-building property was completed in 2018 and occupies nearly 11 acres at 1271 Sadler Drive. The unit mix comprises one- and two-bedroom floorplans averaging 852 square feet, featuring washer and dryers, above ceiling height, private balconies/patios and outside storage. Common-area amenities include a fitness center, a business center, a clubhouse, a swimming pool, outdoor grilling stations, an outdoor entertainment pavilion, a dog park and 400 parking spaces.

Financing details

Hayden Properties acquired the asset and, according to Yardi Matrix data, RED Capital Group funded a $26.8 million HUD loan in 2016, with the maturity date set for 2058. The loan amortizes on a 40-year schedule and carries a note rate of 3.7 percent, with interest accruing for the first 22 months, after which the balance of principal is paid along with interest. Matt Reynolds, director of asset management at Hayden Properties, stated that the partial government shutdown added a layer of complexity to the HUD loan assumption on the transaction, yet the teams managed to overcome all difficulties.

“Investor activity in multifamily product across Texas continues to sell and trade at an almost historic rate,” Austin said in a prepared statement. “Luxury assets like 1271 San Marcos … offer investors both immediate and long-term returns.”

Images courtesy of Yardi Matrix