Feature Photo (above): A roofing crew does repairs on one of the damaged buildings at Park Texas Apartments in this November 2016 Google Streets screen shot.
Houston (Harris County) — Auerbach Funds and Blue Magma Residential have entered a partnership to salvage a 587-unit apartment complex in Southeast Houston that currently has 249 uninhabitable units.
Auerbach announced Tuesday the partnership and the acquisition of the property, Park Texas Apartments at 11911 Martin Luther King Jr Boulevard. The Class C garden-style apartments are in their current poor condition due to a variety of factors, including hurricane damage.
The partners plans a substantial investment into the rehabilitation of the asset, including repairing the defunct units, renovating the clubhouse, and performing necessary roof and mechanical repairs, landscaping, driveway and common area improvements.
Park Texas Apartments is about halfway between Interstate 610 and the Sam Houston Tollway. The immediate area has seen rapid revitalization and growth in recent years.
Google Earth overhead view of the Park Texas Apartments property.
The project site is within a Tax Increment Reinvestment Zone, and it benefits from several substantial investments in the area–the $44.6 million Veterans Home project and a corresponding roadwork extension funded by the State of Texas and U.S. Department of Veterans Affairs. In addition, the school district has committed to a $72 million construction project for the new Sterling Aviation High School.
Of the acquisition, Peter Auerbach, CEO of the New York-based Auerbach Funds stated, “We believe that investing in heavy value-add multifamily can be very successful in growing submarkets in established cities like Houston, and are looking forward to contributing to the velocity in the Southeast submarket.”
Reuven Oded, CEO of Tampa, Florida-based Blue Magma added, “We plan on creating a community by delivering an improved product at market rates, which would provide not only strong returns for the investment, but also enhance the quality of life for our tenants.”
One of several buildings at Park Texas Apartments that was shuttered a few years ago. Image: Nov. 2016 Google Streets.
Auerbach Funds is a real estate private equity fund manager with over 2.1 million square feet under management in 8 states throughout the continental US with a total asset value in excess of $250 million. Blue Magma Residential is a real estate investment and management firm with a 20 – plus year track record and over 8,000 apartment units throughout Florida, Georgia, Alabama, Mississippi and Texas.
This article was edited from an Auerbach Funds press release.