Quarterra sold a Houston-area apartment complex that’s been offering tenants significant concessions.
New York-based multifamily investment and development firm Atlas Real Estate Partners bought The Maddox, a 326-unit apartment community at 1330 Park West Green Drive in Katy, from Quarterra, the struggling multifamily subsidiary of Miami-based homebuilder Lennar, according to public records. The sales price was not disclosed, but Atlas bought the property “at a significant discount to replacement cost,” the company claimed in a press release.
“This submarket is one that we’ve had our eye on,” Atlas co-founder Arvind Chary said of Katy, adding that “supply is contracting and demand drivers remain intact” in the western Houston suburb.
“It’s a very desirable submarket, given the newer product, better school district strength and freeway access,” Chary said.
Charlotte, North Carolina-based Quarterra built the five-building, three-story complex in 2019. Atlas plans to refresh the exterior and the amenities, according to a press release.
The Maddox is currently offering up to six weeks of free rent to new tenants, according to its website. Chary expects concessions to “burn off” as demand grows.
News broke earlier this year that Lennar sold its majority stake in Quarterra to asset management firm TPG after a long stretch of losses for Quarterra that emerged amid rising construction costs and oversupply in the Sun Belt. The company put more than 11,000 apartment units on the market in 2023, including a smattering of projects in Dallas, Houston and Austin. Private equity titan KKR bought more than 5,200 units over 18 complexes from Quarterra for $2.1 billion the following year.
Fort Worth-based TPG plans to invest heavily in new construction, according to CoStar.
Newmark represented Quarterra in the deal.
Distressed multifamily properties accounted for a surge in loans flagged for foreclosure earlier this year, with many tied to Houston apartments purchased in 2021 and 2022. The biggest loan flagged for a foreclosure sale in March was a $34 million loan to Los-Angeles based Kor Group for an 186-unit apartment community in Houston proper, which Kor eventually sold to Dallas-based investment firm Presidium.
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