“Here’s proof that value-add deals can still be found if you turn over enough rocks. SPI Advisory closed two multifamily deals in Denton and Grapevine (totaling 378 units) with plans to turn the properties around and get market-rate rents.
SPI Advisory principal Michael Becker (who recently formed the company with partner Sean Mabarak) tells us the deals are typical of the types of value-added, reposition deals going on. Both were sourced and transacted off market, had current rents that trailed competitors by a large amount and had absentee, long-term ownership that was happy with the aggressive purchase prices and terms, Michael tells us. The two deals are the 160-unit Lama del Rey, 517 N Loop 288 in Denton, and the 218-unit Regional Place, 3037 Mustang Dr in Grapevine. (That’s Michael with his wife on a recent cruise.)
Sean, pictured with his better half, tells us SPI focuses on forming partnerships with California investors and institutions to acquire DFW value-add apartments. He says SPI has two more deals under contract and should be in escrow this week on two more. He tells us SPI are the principals in the purchases with individual, high net worth, equity partners. Rowan Properties (Mike Burch) brought SPI the Loma del Rey deal and ARA (Jakob Andersen) helped track down the owner of Regional Place and ended up repping them on the disposition.
Both deals were well occupied, but lagged the market in rental rates, Michael tells us. Additionally, both had long-term, out-of-state owners and ongoing hail claims that SPI helped finalize in order to close as soon as possible. The claims allowed SPI to obtain new roofs, some HVAC and more while the properties were in escrow, which added immediate value upon close, he says. There are plans for significant upgrades to the interiors (appliances, flooring, new fixtures and more) and both properties will get a whole new look on the exterior with paint and additional amenities and will be rebranded.”