LEAGUE CITY, TX - 29th Street Capital (29SC), a privately-held real estate investment and advisory firm, has acquired a 314-unit multifamily real estate portfolio in League City, Tex. The two apartment communities are located within 1.5 miles of each other in the Clear Lake submarket of Houston. The deal closed February 19.
Crow’s Nest Apartments (176 units) has mostly one- and two-bedroom units and primarily caters to professionals. It was built in 1984.
Harbor Walk Apartments (138 units), which appeals more to families, consists exclusively of two-bedroom and three-bedroom units. It was built in 1987.
29SC purchased the assets on an off-market basis from a regional owner. The firm plans $1.6 million worth of renovations, which include a new appliance package, microwaves, better kitchen lights and accent walls. Exterior improvements are planned as well.
“This acquisition will allow us to grow our presence in Houston and fits our overall business plan perfectly,” said Javier Bustillo, 29th Street Capital’s Senior Vice President of Acquisitions for Texas. “These are value-add assets in a great submarket with excellent schools, plentiful employment and very limited new supply. It checks all of the boxes for 29SC.”
League City has experienced tremendous job growth fueled by the aerospace, petroleum refining, and health care industries as well as the Port of Houston, which continues to expand and will double its capacity by 2016 once the Panama Canal expansion is completed.
Both properties are in the Clear Creek Independent School District, ranked as the best large school district in the Houston MSA. The “Houston Chronicle” has also named it one of Houston’s Top Work Places.
Despite the fall in oil prices, downstream oil and gas employment remains strong, causing significant demand for multifamily housing. Given the restrictive zoning for new multifamily development in League City, competition brought on by new supply is low compared to the city of Houston.
The Clear Lake submarket of Houston, Tex. Is located directly on the I-45 corridor linking it to Galveston Island (32 miles southeast) and the Houston CBD (25 miles northwest). Major employers include companies in the high tech aerospace, petrochemical, tourism, boating and recreation industries. The area is home to the third largest concentration of pleasure boats in the United States.
“Residents of the area value the high quality of life, suburban lifestyle, economic opportunities, low crime rates, excellent schools and short commute times relative to the greater Houston area,” Bustillo added.
The economy is additionally supported by over 150 companies located along the Houston Ship Channel, the Port of Houston, the NASA/Johnson Space Center, William P. Hobby Airport, Ellington International Airport, the Kemah Boardwalk, and Clear Lake Regional Medical Center.
Formed in 2009, 29SC is a privately-held real estate investment and advisory firm that employs a value-added investment strategy on properties that are below the radar of institutional peers. 29SC’s current portfolio consists of 6,175 units and it has acquired over 7,239 units in 10 markets across the United States. Investments typically require approximately $2 to $10 million of equity per deal, and involve the acquisition or recapitalization of real estate assets, portfolios or platforms. The firm will continue to target deals that fit these parameters with the intention of offering its investors above market returns. Learn more about 29SC at www.29thstreetcapital.com