Verandas Bear Creek
Verandas at Bear Creek is a 160-unit, class B multifamily property built in 1982 and located in Houston, Texas - five miles away from the “Energy Corridor” which employs 91,000 people. According to an Apartment Data Services’ report in 2018, the Bear Creek/Copperfield/Fairfield submarket ranked 1st of 42 total submarkets in their list of “Houston’s Hottest Performing Submarkets” with annualized growth rates of 6.7% in occupancy, 5.7% in rental rates and 1.17% in absorption over the prior 3 months. Additionally, there are no new or proposed apartment communities in a 3 mile radius.
Location
Background
Lone Star Capital first began pursuing the acquisition of Verandas at Bear Creek in early 2019 when the seller engaged a local brokerage firm to market the property for sale. Lone Star participated in the bidding process, but a buyer was never chosen since no one was able to meet the seller’s initial high price expectation. Lone Star continued to engage with the sales broker to see if the seller would be willing to lower their pricing and potentially transact outside of a competitive marketing process (also known as a “best and final offer” process which can go on for multiple rounds and often squeezes pricing to the absolute maximum). Finally, in February 2018, Lone Star was awarded the property for $11,500,000 ($71,875 per unit) and closed on the asset on June 26, 2019.
Business Plan
