Waterford JV Pays $67M for Dallas Asset, Turns it Affordable
This is Waterford's second Dallas property to be converted into affordable housing.
A joint venture between Waterford Property Co. and The Vistria Group has bought Axis Kessler Park, a 299-unit Class A asset in Dallas. The venture paid $67 million for the property, while Walker & Dunlop originated a Freddie Mac acquisition loan. Sherman Residential previously owned the property, Yardi Matrix data shows. CBRE represented the seller.
Prior to the purchase, the property was not income-restricted. However, Waterford applied to receive tax-exempt bonds from the City of Dallas Housing Finance Corp., as well as a tax abatement for the community.
The terms of the deal dictated that, upon purchase, most of the asset’s units would become income-restricted. Additionally, the venture would also enter a ground lease with DHFC, according to The Real Deal.
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As the City of Dallas approved Waterford’s request and the transaction reached completion, the owners will restrict rents for 90 percent of the units. Apartments will be reserved for residents earning up to 60, 80 and 140 percent of the Area Median Income. The remaining 10 percent of the units will be rented at market rate.
Axis Kessler Park encompasses one- to three-bedroom floorplans ranging between 732 and 1,377 square feet. Units feature arched doorways, 9-foot ceilings, as well as private patios or balconies. Community amenities include a swimming pool, business center, clubhouse and gym, among others.
Located at 2400 Fort Worth Ave., the workforce housing community is some 5 miles from downtown Dallas while Trammel Crow Park and Stevens Park Golf Course are less than 4 miles away. Employers such as Methodist Dallas Medical Center and the Dallas Independent School District—the top employer for the property’s residents—are within 7 miles.
CBRE Senior Vice President John Makus represented the seller in the transaction.
Taking measures to keep housing affordable in Dallas
The National Low Income Housing Coalition revealed a shortage in Dallas’ affordable housing. According to its report, 17 affordable units up are available for every 100 households earning up to 30 percent AMI.
However, while the shortage is steep toward the lower spectrum of AMI, the gap closes toward its higher echelon. Roughly 40 and 91 units are available for every 100 households earning up to 50 and 80 percent AMI, respectively.
To help address the affordable housing shortage, The Dallas City Council approved a $1.25 billion capital bond package which contained $82 million dedicated toward increasing the supply of affordable homes.
Additionally, DHA Housing Solutions for North Texas will hold a public hearing for its five-year plan this September. The Capital Fund Program will be on the table, which earmarked $37.9 million for capital improvements across its 31 properties comprising some 5,000 units.
In another affordable housing deal, Waterford teamed up The Vistria Group, Northern Liberties and DHFC to purchase Domain at Midtown Park, a 395-unit community in Dallas. Just as it was with Axis Kessler Park, the owners converted the property into workforce housing, marking Waterford’s first Dallas-workforce-conversion deal.
