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Argosy Real Estate Partners Invests in Aldeia West
On November 8, 2018, Argosy Real Estate Partners IV, L.P. and its parallel funds (“AREP IV” or the “Fund”), in partnership with InvestRes (formerly Avesta), acquired a 305-unit, 2015 vintage Class A garden-style multifamily property located in the Katy submarket of Houston, Texas (“Aldeia West” or the “Property”). The Property was acquired off-market at a favorable cost basis, below comparable trades in the market and at a significant discount to replacement cost.
Aldeia West was built in 2015, at which time the Houston multifamily market was suffering from an abundance of new supply and weakness in the energy sector. Following a longer than anticipated lease-up and other factors, the seller decided to sell the Property upon stabilization. In August 2017, the Property suffered significant water damage from Hurricane Harvey, and as a result the seller’s exit strategy was put on hold. The seller spent the next eight months reconstructing damaged units and subsequently began a second lease-up in early 2018 when Argosy and its partner entered into direct negotiations to acquire the asset.
The Property is located in the Katy submarket of Houston, 20 miles west of the central business district. Katy has been Houston’s fastest growing submarket over the past decade due to its close proximity to employers located in the Energy Corridor and highly regarded school districts. The Property is located in an infill area of East Katy, adjacent to George Bush Park in one of the most highly desirable neighborhoods within Katy.
The business plan is to complete the remaining lease-up and manage the burn-off of significant in-place concessions while capitalizing on strong market rent growth due to a limited supply pipeline and strong projected economic growth in the Houston metro. The Property will benefit from the implementation of more effective property management and a light value-add program on the common areas.
Aldeia West was acquired in partnership with InvestRes, a vertically-integrated multifamily owner/operator headquartered in Tampa with additional offices in Austin and Dallas. InvestRes will provide construction and property management services.