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4/24/20
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A multifamily portfolio in Denton, TX consisting of six properties totaling 325 res units, along with 18k sf of commercial space, traded hands. Located in a northern suburb of Dallas-Fort Worth, the portfolio comprises Locust 210 Lofts, Victoria Heights, Victoria Station, Victoria Village, The Adagio, and Locust Street Terrace Apartments.
Each of the Class A, mid-rise properties were built between 2009 and 2014 and were 94% leased at the time of sale. The classic unit interiors were highly accretive to the future yield profile, offering a double-digit Year-1 return. The buyer intends to invest $3.2 mil toward interior renovations and exterior capital improvements to enhance the overall, live-work-play, experience for the tenants.
Totaling 325 units and more than 18,000 square feet of commercial space, the portfolio represented an excellent opportunity to invest in the high barrier-to-entry Denton submarket, which is experiencing significant in-migration. The popular downtown city-center location positions each property to experience substantial organic rent growth through lease-over-lease gains.
A Walker & Dunlop team led by Kyle Palmer served as advisor to both the sellers and buyer of the properties. All parties were local, private-equity investors. The acquisitions expand the buyer’s existing Texas portfolio, which also includes the Madison Park, Wyndham Pointe and Oasis Springs properties.
Palmer and W&D colleague Jeremy Nussbaum sourced a streamlined bridge financing solution for the buyer through a national debt fund. The loan terms included an attractive rate of 4.14%, interest-only for three years, and a loan to value of 80%.
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