Carroll Organization Grabs Luxury Houston Asset

The Carroll Organization buys a 267-unit community just north of Houston; Canadian Apartment Properties REIT enters a $455 million acquisition agreement; and Walker & Dunlop closes a $6 million Fannie Mae financing.

ARIUM Fall Creek

Houston—The Carroll Organization has completed its seventh acquisition within the past 12 months with the purchase of Waterford Place, a 267-unit community located just north of Houston. Terms of the trade were not disclosed.

“We are aggressively seeking high quality communities in strong locations throughout the Southeast, Texas and the West Coast,” says Patrick Carroll, founder and chief executive officer at Carroll. “We’re looking for opportunities where our expertise in property asset management can help deliver the best possible returns for our investors.”

The luxury community will be re-branded ARIUM Fall Creek. It is comprised of one-, two- and three-bedroom apartments. Community amenities include chef’s kitchens, a resort-style pool, and a clubhouse with a fitness center, business center and computer lounge.

The acquisition was financed through Carroll Fund I, a private fund; Carroll Management Group will handle property management.

A Houston acquisition certainly makes sense based on the city’s market fundamentals. The ‘Space City’ is currently leading the nation in job gains, as pointed out in a recent Marcus & Millichap report. Houston jumped up six spots on the services firm’s list of national apartment markets, coming in at number 18 for 2012. Vacancy is expected to fall 80 basis points in 2012 to 8 percent. Rents should rise by 4 percent as well, as only 1,100 units were completed in 2011.

CAPREIT Announces 3,562-Unit Acquisition

Toronto—Canadian Apartment Properties Real Estate Investment Trust has entered into a agreement to acquire 3,562 units at a purchase price of $455 million. The portfolio is comprised of 14 properties in the Greater Toronto Area, Southwestern Ontario, Montreal, Quebec City and Halifax.

The REIT also announced a plan to offer approximately 6,850,000 units at a price of $22.75 per unit—for gross proceeds of $155.8 million—to partially finance the acquisition. CAPREIT will also assume $183.7 million of mortgage debt and use $122.6 million from CAPREIT’s acquisition and operating facility to fund the remaining acquisition price.

Ten of the 14 properties are high-rise assets. Of the total portfolio, three communities are listed as affordable, nine are listed as mid-tier, and three are described as luxury.

“We are pleased to be adding these high quality properties to CAPREIT’s portfolio,” says Thomas Schwartz, president and chief executive officer of CAPREIT. “We believe we are acquiring the most suitable properties from the vendor’s portfolio, building that fit very well with our geographic, demographic and quality criteria.”

Walker & Dunlop closes $6M financing under Fannie Mae’s Early Rate Lock

Dallas—Walker & Dunlop LLC announced it recently provided $6 million in financing for Villas at Montierra, an affordable housing community located in Dallas.

The refinance loan was structured with a 10-year term and a 30-year amortization with a 1.46x debt-service coverage ratio under Fannie Mae’s Early Rate Lock Program. Villas at Montierra is a qualified property under the Affordable Housing Disposition Program (AHDP) and abides by the Land Use Restriction Agreement (LURA) in place, which requires 179 units be leased to “Low Income Tenants” and “Qualifying Tenants”.

A representative of the borrower, Alden Montierra Enterprises LLC, comments, “I’ve done several Agency financings over the years, but nothing came close to the experience I had with Alex Inman and his team at Walker & Dunlop. I was so impressed with how fast they moved once the property became eligible for Fannie Mae financing, especially considering it enabled us to capitalize on the lower rates and pay off our existing lender on time. I’d recommend Alex and W&D to anyone looking for certainty of execution and a lender that can navigate the complexity of Fannie Mae financing with ease.”

Villas at Montierra is a 357-unit garden-style apartment development built in 1984 and renovated in 2007. The borrower purchased the property in 2009 and has since made over $350,000 in capital improvements. The property offers 10 different floor plans in one- and two-bedroom models in 18 residential buildings. Community amenities include a playground, laundry facility, courtyard, picnic area with barbeque grills, mail center, access gates, and two swimming pools. Villas at Montierra was 88 percent leased at closing.

Walker & Dunlop Loan Officer, Multifamily Finance, Alex Inman led the Walker & Dunlop team.