NDC Capital Partners has joined forces with Post Investment Group to buy a 365-unit multifamily asset in Dallas.
The New York-based private real estate investment firm bought Greentree Apartments in the submarket of Carrollton for an undisclosed sum. However, Post Investment Group founder Jason Post told PERE the deal was equivalent to 9 percent cap rate once improvements have been made.
Post, based in Los Angeles, partners with private equity firms, institutional investors and high-net-worths to target value-add and opportunistic multifamily assets in Texas.
He said the state had seen modest declines in net operating income in Texas, but dramatic falls in cap rates making the sector extremely attractive. “We feel comfortable that we will be able to straddle the bottom of the market and now is a good time to beginning buying [multifamily in Texas],” Post, who founded his firm in 2007, said.
With many investors currently sitting on the sidelines owing to liquidity or legacy issues, and with multifamily benefitting from financing from Fannie Mae and Freddie Mac, Post said he was surprised more investors weren't targeting the market. “There were a lot of people who bought at the height of the market in 2006 and 2007, yet they don’t want to buy now,” he said.
The firm is also looking at California multifamily assets, although Post said the bid-ask spread needed to narrow more before deals could happen.
This is the second transaction Post Investment has closed on in the past week. It has also acquired the 296-unit Vista del Lago residential complex from Equity Residential.
NDC and Post expect to hold the 26-year-old, Class B, Greentree property for between five and 10-years and invest $4,000 per unit for renovations. “The plan is to prolong the useful life of the asset and, given the immediate environment, maintain what’s been going on at the property,” Post said.