The tables have turned on some value-add multifamily developers, but WindMass Capital just scored a win in the distressed corner of commercial real estate.
The Dallas-based developer secured a floating-rate loan for its Arlington apartment complex through asset management firm Benefit Partners. The deal was arranged by JLL Capital Markets.
The JLL team that negotiated the WindMass deal was led by Kris Lowe and Kristi Leonard.
The Jones is a garden-style apartment community built in 1977. It has 224 units, including studio, one-, two- and three-bedroom apartments. The property is located at 2109 Lincoln Drive, about 25 minutes from downtown Fort Worth and downtown Dallas. The location affords easy access to major thoroughfares Highway 360 and Interstate 30.
The property is in the middle of a capital improvement initiative; almost half of the units have been renovated. Building exteriors have also been updated, and the complex got a new leasing office.
Some properties in similar positions haven’t been as lucky.
Amid the pandemic real estate frenzy, value-add developers purchased older apartment complexes at record prices, intending to update them and increase rents. But now that property values have declined, renovation prices have spiked and interest rates have risen, rate cap expirations have put some developers on the rocks. As a result, some properties are being sold at a discount. Others are going back to lenders.
Since its founding in 2017, WindMass Capital has done more than $1.5 billion in transactions. The firm specializes in repositioning and redeveloping garden-style apartment complexes in high growth markets. It currently owns five properties in the Houston area, eight properties in Stephenville and 23 properties in Dallas-Fort Worth, according to its website. The DFW properties are located throughout the metroplex in Fort Worth, Dallas, DeSoto, Garland, Arlington, Mesquite and Wylie.
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Commercial
Texas
Multifamily goes from darling to distress in Texas