Two Dallas Apartment Properties Trade Hands
- Oct 25, 2012
Dallas—Peak Capital Partners has bought a two-property 1980s apartment portfolio totaling 560 units in Dallas from Landmark Residential. The deal was brokered by Institutional Property Advisors, a recently formed multifamily division of Marcus & Millichap specializing in institutional and major private investors.
Terms of this particular deal weren’t disclosed, but it is true that investing in Dallas multifamily is getting more expensive. According to Marcus & Millichap, cap rates have been compressing in Dallas multifamily in recent quarters, with Class-A properties trading between 5.5 percent and 6 percent, while Class-B properties trade between 7 percent and 8 percent.
Pace’s Cove Apartment Homes, one of the properties, is in northeast Dallas. Built in 1983, the 328-unit property is partially surrounded by a heavily wooded creek, and was 96 percent occupied at the time of the sale. The other property is the 232-unit Brookfield Apartment Homes, built in 1986, and 97 percent occupied at the time of the sale.
The interest in D/FW area apartments has been spurred by job creation in the area. Moreover, the 20- to 34-year-old population will have expanded by about 30,000 by the end of this year, compared with the previous five years, when growth in that demographic averaged roughly 20,000 per year, according to the U.S. Census Bureau.
“Dallas is one of cities leading the nation in economic recovery and job growth,” notes Will Balthrope, an IPA executive director. “Dallas/Fort Worth’s economy is generating new households, creating the tightest apartment conditions in more than a decade, and facilitating healthy rent growth.”