BETHESDA, MD - Walker & Dunlop, Inc. announced that its investment sales group, Walker & Dunlop Investment Sales, completed the sale of six multifamily communities in Denton, Texas. Located in a northern suburb of Dallas-Fort Worth, the portfolio comprises Locust 210 Lofts, Victoria Heights, Victoria Station, Victoria Village, The Adagio, and Locust Street Terrace Apartments.
Totaling 325 units and more than 18,000 square feet of commercial space, the portfolio represented an excellent opportunity to invest in the high barrier-to-entry Denton submarket, which is experiencing significant in-migration. The popular downtown city-center location positions each property to experience substantial organic rent growth through lease-over-lease gains.
The Walker & Dunlop Investment Sales team was led by Managing Director and middle-market expert, Kyle Palmer. Based in Atlanta, Georgia, the team effectively facilitated the transaction and served as advisor to both the sellers and buyer of the properties. All parties were local, private-equity investors. The acquisitions expand the buyer's existing Texasportfolio, which includes Madison Park, Wyndham Pointe, and Oasis Springs.
Following the sale, Mr. Palmer partnered with Jeremy Nussbaum, a Senior Director in Walker & Dunlop's Capital Markets group, to source a streamlined bridge financing solution for the buyer through a national debt fund. The loan terms included an attractive rate of 4.14 percent, interest-only for three years, and a loan to value of 80 percent.
Each of the Class A, mid-rise properties were built between 2009 and 2014 and were 94 percent leased at the time of sale. The classic unit interiors were highly accretive to the future yield profile, offering a double-digit Year-1 return. The buyer intends to invest $3.2 million toward interior renovations and exterior capital improvements to enhance the overall, live-work-play, experience for the tenants.