Dallas-based RREAF Holdings bought two west Little Rock apartment complexes -- Shadow Lake Apartments and Turtle Creek Apartments -- for a combined $32.3 million this month.
Shadow Lake Apartments, with 296 units, was sold for $17.7 million. Turtle Creek Apartments, with 216 units, sold for $14.6 million.
The Shadow Lake Apartment complex, which covers about 19 acres, appraised for $15.6 million this year. It most recently sold for $26.9 million in 2014.
The 15-acre Turtle Creek Apartments appraised for $12 million this year. The complex most recently sold for $13.7 million in 2014.
In February, RREAF -- Realty (America Group) Real Estate Acquisition Fund -- bought another Little Rock apartment complex, Beacon Hill, for $9.2 million.
"We're familiar with the market," said Dari Mahboubi, director of investor relations. "We really like Little Rock as a whole. It has great, sturdy economic drivers."
Shadow Lake and Turtle Creek are positioned in great neighborhoods with significant retail properties nearby, Mahboubi said. "Since we've dipped our feet in the Little Rock market previously, we've liked what we've seen," Mahboubi said. "Maybe there will be some more deals in the future."
Shadow Lake Little Rock LLC borrowed $25.8 million from MRED Lending LLC of New York to help finance the deal. Brandon Miller, vice president of Shadow Lake Little Rock, signed the mortgage.
The previous owner of Shadow Lake and Turtle Creek bought them as part of a $1.6 billion transaction and had overlooked the two Little Rock complexes, said Graham Sowden, director of acquisitions.
"We thought there was an opportunity for us to come in and manage more efficiently," Sowden said.
The Multifamily Group, owned by Richard Cheek and Ted Bailey III, represented the seller, along with NKF Capital Markets of Memphis. The seller was Hudson Americas of Dallas.
Cheek and Bailey brand themselves as apartment brokers and consultants, specializing in this commercial property type since 2001.
"We were familiar with [Cheek and Bailey] who brought us that deal," Mahboubi said. "Of course, before we put any money on the table, we checked [the apartments] out."
RREAF sent a team of 10 people from its property management division to research the two apartments, Sowden said.
"So we had a pretty good idea of what we were getting into before we acquired the properties," Mahboubi said.
The combined sales price of $32.3 million equals $62,988 per unit, Bailey said.
When a company buys an apartment complex, it usually has a property investment holding period of seven to 10 years, Bailey said.
RREAF has properties in Alabama, Arkansas, Florida, Georgia, Mississippi, Oklahoma, South Carolina, Tennessee and Texas. The company's portfolio has apartments built in the 1980s and 1990s, Mahboubi said.
Renovations the company does when it buys a new complex include installing hardwood floors, new appliances, updated countertops, fixtures and ceiling fans, Mahboubi said. "We try to find markets where people are willing to pay for that," Mahboubi said. "I think Little Rock is a great example of that."
WAREHOUSE SOLD
Eliken Property Management, a New York firm formed in 2010, bought a 555,000 square foot industrial building from Binswanger this month in the Little Rock Industrial Park. The price was $10.8 million, according to the Pulaski County assessor's office.
Eliken was attracted to the building at 6901 Lindsey Road because it has access to all modes of transportation. Among those, Eliken said in a news release, are rail service and proximity to interstate highways.
The transaction for the seller, Investment Grade Loans, was handled by Holmes Davis, senior vice president in Binswanger's Dallas office, Binswanger said in the news release.
The property, which includes 27.5 acres, was appraised at $13 million this year. The warehouse was built in 1975 and was last sold for $13 million in 2005.
GARAGE SOLD
Physchpaice Trust of Encino, Calif., and a group of about eight partners spent $775,000 to buy a 3,200-square-foot Precision Tune garage in North Little Rock last month.
The service repair franchise, built in 1998, is at 4630 John F. Kennedy Blvd. The Larry Parker Trust has a 25 percent ownership in the Precision Tune building. It was appraised at $435,000 this year.
CRM Capital Partners LLC of North Little Rock was the seller.
LOUISIANA TERRACE
The Louisiana Terrace Opportunity Fund LLC paid $720,000 for the Louisiana Terrace apartment buildings last month.
There are 24 units to the apartment buildings at 1717 Louisiana St. Combined, the apartments cover about 19,000 square feet. Built in 1950, the apartments appraised this year for almost $910,000.
Louisiana Terrace borrowed $612,000 from Armor Bank in Forrest City to help finance the purchase. The mortgage matures in 2023.
The seller was First National Bank.
Mark Brown and Jill Elaine Judy, members of Louisiana Terrace Opportunity Fund, signed the mortgage. Judy incorporated the limited liability company in October.
Brown and Judy bought the 16-unit Peachtree Apartments at 315 E. Sixth St. in Little Rock in June for $768,000. For years the Arkansas Repertory Theatre owned the apartments and used them to house interns and visiting talent.
In October, Brown and Judy sold the apartments to 315OnSixth LLC for $900,000.
SundayMonday Business on 12/23/2018