Steadfast Buys Austin Asset for $22M

Steadfast Income REIT buys its second Austin asset; Beech Street Capital closes $5.8 million for a pair of Dallas communities; and Vitus Group begins an affordable redevelopment in California.

Springmarc Apartments

San Marcos, Texas—Steadfast Income REIT has added a new asset to its portfolio with the acquisition of Vantage at San Marcos, a 240-unit garden-style community located in the San Marcos suburb of Austin, Texas. The $22 million purchase brings the REIT’s total investment in apartment communities in nine Midwestern and Southern states to approximately $350 million.

“We felt this represented a unique opportunity for us to acquire a high-quality asset in a desirable submarket near one of Texas’ largest universities,” says Ella Neyland, president of Steadfast Income REIT. “Texas State University’s enrollment has grown between 3 percent and 5 percent annually over the past several years, and we expect demand for apartment housing to remain strong.”

The 91 percent occupied asset was built by Vantage Communities in 2008 and will be renamed Springmarc Apartments. Amenities include a pool, 24-hour fitness center and a clubhouse with an internet café and a business center with both Mac and PC computers.

This deal represents the second Austin-area acquisition for Steadfast. Earlier this year, the REIT picked up the 232-unit Montelena Apartments in Round Rock.

Beech Street closes $5.8M for a pair of Dallas assets

Dallas—Beech Street Capital has closed $5.8 million in Fannie Mae DUS loans to refinance a two-property apartment portfolio in the Dallas MSA. The two assets, Valley Creek and Living Oaks, together total approximately 250 units and represent the first two properties to close of six assets that the borrowers determined would benefit from extended early rate lock.

“Given the spread between the current rate that apartment owners are paying on their loans and the rates now available for refinance, it makes sense for them to look a year to 18 months into their portfolio and run projections using Fannie Mae’s extended early rate lock facility,” says Larry Sneathern, the senior vice president in Beech Street’s Dallas office who originated the transaction. “Depending on timing, the dramatic reduction of debt service made possible by today’s low rates often offsets any prepayment penalty.”

Both fixed-rate loans have five-year term with three years of interest only.

Vitus Group begins affordable development in California

San Luis Obispo, Calif.—Vitus Group has announced that it has acquired and will rehabilitate Madonna Road Apartments, a 120-unit rental housing complex located in San Luis Obispo, Calif. Vitus Group’s work on the project will restore affordable housing in one of the nation’s least affordable rental housing markets.

The $6 million rehabilitation will feature: a photovoltaic installation that will produce up to 95 percent of the property’s electricity; a drought tolerant landscape design that will reduce the property’s water usage; and a club-house with a community room that will include a small kitchen, staff office and computer lab.

“San Luis Obispo is one of the least affordable housing markets in the country,” says David Beachman, director of Vitus San Diego. “We are thrilled to be able to provide a significant amount of like-new affordable housing for Central Coast families, because the need is so great.”

The units will be reserved for households at or below 60 percent of the area median income.