Tara Capital has nabbed $55.5 million of acquisition financing for the purchase and renovation of an 810-unit Houston multifamily asset.
BridgeInvest supplied the floating-rate loan on Tara Capital’s newly acquired Park on Voss property in Houston’s Westchase neighborhood. Tara Capital purchased the 610,950-square-foot complex from Barvin Capital for $63 million, with total project costs estimated at $82.1 million.
Alex Horn, founder and managing partner of BridgeInvest, said the transaction closed in about 30 days thanks to the nonrecourse structure of the loan raised out of its fourth debt fund launched since the formation of the private lender in 2011. Horn said a big attraction to this deal was the property’s proximity to The Galleria, an upscale mixed-use shopping mall with hotels and offices.
“It offers a very good price point for residents to be able to live in Houston and still be able to commute to key work hubs around the city,” Horn said. “We also like that it was an existing asset with cash flow and a clear business strategy of renovating the units and being able to push rents.”
Located at 2424 South Voss Road, the 1971-built property has amenities that include a swimming pool, ballroom, walking trail, fitness center and volleyball court. Tara Capital plans to renovate 610 of the apartments and implement upgrades to the other 200 units that recently underwent renovations. The loan will also fund new appliances, HVAC systems, elevator repairs and roof improvements.
Following renovations and stabilization of the property, Tara Capital plans to refinance the acquisition loan with permanent debt, Horn said. He noted that while Houston’s multifamily rents have softened of late, there is a strong outlook for the long term and especially in the city’s inner locations like Park on Voss, given the challenges with constructing new apartments in that area.
“You have this delimiting of new supply coming on the market which I think will inherently benefit older properties such as this one,” Horn said. “As you start to have supply-demand imbalance and the cost for new product starts to increase, you will inevitably start pushing up the value of existing product.”
Officials at Tara Capital did not immediately return requests for comment.
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
Robert Khodadadian, skyline properties, ground leases, off market, investment sales, Commercial Real Estate, Commercial Observer
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