Another week, another property in Texas sells at a discount.
Following Dallas-headquartered real estate investment and asset management firm Lion Real Estate Group’s purchase of Stone Creek at Old Farm in Houston, Archway Equities purchased Coronado Apartment Homes in Dallas last month for a roughly 30% discount compared to peak pricing a couple of years ago, chief investment officer Sankeerth Pulusani told Multifamily Dive.
The 264-unit multifamily community is Beverly Hills, California-based Archway’s first purchase in Texas in more than two years. In 2022, the firm sold 1,800 units in the Sun Belt for $350 million because it was concerned about supply, Archway President Sean Moghavem told Multifamily Dive.
In 2023, Archway acquired $250 million of newer properties in California, including The Paseos at Montclair North in Montclair. However, now that yields have improved, Archway expects to add to its 11 properties totaling 2,700 units in Dallas and Austin.
“So naturally, given the depth of our relationships, we are receiving special treatment from brokers who know of our commitment to those markets and who provide us with meaningful deal flow coming from there,” Moghavem said.
As the firm looks for new deals, Dallas will be a target. “The long-term dynamics in Dallas are very favorable,” Pulusani said. “It’s leading the nation in population growth, leading the nation in employment growth and leading the nation in in-migration. Plus, you have a very diverse and stable job market.”
Value-add opportunity
Built in 1984, Coronado Apartment Homes has one- and two-bedroom apartments housed in 11 three-story residential buildings on a gated 6.8-acre site. The property’s amenities include a clubhouse, fitness center and resort-style swimming pool.
The seller recently renovated unit interiors, but Archway plans a multimillion-dollar capital improvement plan focusing on the building exterior and common area amenities. The firm will also install washers and dryers in all of the units.
“We plan to add new siding and paint and rebrand the property,” Pulusani said. “The clubhouse is still in its original condition, so we're basically redoing the clubhouse and the gym. We’re adding tenant yards and adding a dog run.”
The community is located in the Lakewood section of Dallas, providing access to downtown and uptown job nodes. The area offers boating and water activities, nature trails and walking and jogging paths.
“It's a very, very high earning demographic in the neighborhood, with lots of interesting retail and recreation, with White Rock Lake adjacent to the property,” Pulusani said.
Lakewood is also a high-barrier-to-entry submarket, with less than 700 units added to the market in the past five years. “Where this property is located, it's been historically a very difficult area to get projects approved,” Pulusani said.
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