Waterford JV Buys Dallas Apartments for Workforce Housing

A former Blackstone-owned apartment complex in Dallas will become workforce housing with a recent change in ownership.

Domain at Midtown Park was acquired by a joint venture of Waterford Property Company, the Vistria Group and Northern Liberties. The partners also entered into a long-term ground lease with Dallas Housing Finance Corporation.

The seller is a Blackstone Real Estate Income Trust. The price was not disclosed, but the property was appraised at $85.5 million last year, according to Dallas Central Appraisal District records.

The Class A, 395-unit apartment complex is at 8169 Midtown Boulevard in the Lake Highlands neighborhood, about 10 miles north of downtown. It was built in 2016.

In exchange for 100 percent property tax abatement for 99 years, the buyers will immediately restrict rents for new qualified residents. In 2023, the estimated taxes on the property amounted to nearly $2 million.

Half of all units will be reserved for residents who earn 80 percent of the area median income; 39 percent of units will be set aside for residents who make 140 percent AMI; and 10 percent of units will be leased at market rate.

The transaction shows funds for affordable housing are greasing the wheels for multifamily transactions, which have slowed due to rising interest rates and tightened lending standards.

After building a portfolio of workforce housing in California, “we’re able to focus on a similar much-needed solution in Texas,” Waterford co-founder John Drachman said.

Debt for the transaction was provided by Freddie Mac through Walker & Dunlop.

Dallas Housing Finance Corporation was created by the city in 1984 and provides funding — such tax-exempt mortgage revenue bonds — for the acquisition, development and redevelopment of the city’s multifamily housing.

Waterford is a Newport Beach-based real estate developer that specializes in developing mixed-use projects in California, developing and investing in affordable housing and redeveloping other commercial properties.

Vistria is a private investment firm with offices in Chicago, Dallas and New York.

Northern Liberties is a Brooklyn-based real estate firm that specializes in acquiring workforce and affordable housing.