Apartments for Rent in Texas Targeted by More Investors
Monday, September 14th, 2009Apartments for rent are again gaining the interest of real estate investors after about two years of negligible activity in the multifamily housing market.
Boston-based Bostonian Investment Group has started raising money to reach its goal of $100 million to launch an investment fund that will buy mortgages backed by delinquent multifamily buildings in North Texas.
Los Angeles-based multifamily investor Learning Links Centers has also started raising money to purchase about 3,500 apartment units in Dallas and Fort Worth in the next couple of years. Learning Links founders George Pino and Joe Killinger said they will buy around 1,200 units within a year and will raise between $30 and $40 million to buy apartment properties.
Another investor raring to acquire multifamily buildings in North Texas is Dallas-based commercial property investor J Alexander Realty Group Ltd., which has started raising funds to acquire smaller apartment buildings.
Bostonian Investment has been an aggressive investor in multifamily housing in Texas for years, buying many of its 5,200 apartment units in the state from 2006 through 2008. It stopped buying in 2008 when the housing market collapsed. So far this year, it has bought only the 284-unit Windmill Terrace Apartments in Bedford, which it acquired for $8 million.
Justin Meszaros, CEO of Bostonian, said his firm plans to buy older apartments for rent, renovate them and then increase the rents. He added he is looking for apartment complexes priced between $5 to $20 million and those that he can buy for 50 to 60 percent of the value of their notes.
According to Brian O’Boyle, manager of the Dallas unit of Apartment Realty Advisors, apartment deals in the Fort Worth and Dallas area rose to their peak in 2007 when a total of 211 apartment buildings were sold. Deals fell last year as only 105 apartment complexes were sold. This year, only 31 apartment buildings were sold so far. O’Boyle predicted increased deals this year and in the next years.
Investor Pino said that North Texas is a good location for apartment investments because of its pro-business climate, its strong job creation record and the relative stability of the multifamily housing market.
Charles Williams, head of commercial mortgage intermediary Pioneer Services LLC, also cited the attractive prospects of buying distressed apartments for rent in North Texas. He said that the pressure for banks to eliminate nonperforming assets will force them to sell distressed apartment properties at discounted prices.
