Tulsa Apartments Sold

TULSA, OK - Multifamily property owners Haley Associates of Omaha paid $11.5 million for Tulsa's 593-unit Highlands apartment complex. Haley, buyer of Oklahoma City's Deep Deuce at Bricktown apartments for $26.9 million in August 2007, intends to spend up to $10 million renovating The Highlands, a 1970s complex that had fallen into disrepair under several different owners."Their goal is to make this a Class A property," said analyst Gary Krisman, a multifamily broker with Tooman Partners of Tulsa. "We'll see if they can pull that off." While that effort could effectively double the $19,392-per-unit purchase price, broker Darla Knight said the deal could prove a good one, although risky in today's economy.

"The potential is there," said Knight, the Tulsa market representative for multifamily specialists Commercial Realty Resources Co. of Norman, which, like Krisman, was not involved in the sale. "That certainly will give the property a better chance than past endeavors have. They have a great location."

That points to the property's greatest strength, said Aaron Hargrove, the Hendricks and Partners broker who handled the deal with Tim McKay and John Clayton. Phoenix-based Hendricks listed The Highlands at $11.86 million last fall for Freddie Mac, which owned it through foreclosure.

Built over two phases in 1973 and 1975, the 6000 S. Memorial Dr. complex sits atop Shadow Mountain, one of the highest points in Tulsa. That address places it just one mile from Woodland Hills Mall and the 71st Street retail corridor, and two miles from the Yale Avenue office and health care complex. "You can see that deal for miles and miles," said Hargrove. "It has tremendous views."

Owner of apartment complexes in 10 states, Haley is affiliated with Dial Equities and Dial Cos., which oversees another multifamily operator, Omaha-based Dial Properties. Haley bought the complex under the title Tulsa Highlands LP of Omaha.

Hargrove said it had no problem coming up with the funds. "During the process of the transaction, the buyers typically do due diligence," he said. "They spent more time in the process, with more people, than any transaction I've been involved with."

Hargrove expects the Nebraska firm to deliver a complete renovation of the property, fixing problems with doors, windows, insulation and other fundamentals that have plagued The Highlands.

"This will, for the first time ever, put it in a position where it can succeed," he said. "This group understands the magnitude of the job ahead of them and really has the game plan and the funds available to do it right. I think they can make the shift."

As Tulsa's second-largest multifamily community, the garden-style Highlands offers 572,745 rentable square feet divided by efficiency and one-, two- and three-bedroom units. Amenities range from a two-level fitness center, conference room and business center to three swimming pools.
The acquisition marks Haley's first reach into the Tulsa market, which continues to chart strong fundamentals in studies by several brokerages.

"I think they'll be very successful," said Hargrove. "I think they'll be very aggressive in this downturn in the economy and will come out of this better than ever."