Property: The Mark at Weatherford
Buyer: Darwin German Real Estate
Seller: Withheld
Property type: Garden style
Units: 355
Location: Weatherford, Texas
Purchase price: $70 million
Less than two years ago, The Mark at Weatherford, a 355-unit Class A property in Weatherford, Texas, was priced at over $100 million. But in a sign of how interest increases have begun to erode value, Dallas-based real estate investment firm Darwin German Real Estate bought the property for much less than that in September.
“This is a high-quality, class A, new build in a great location,” Darwin German, president of Darwin German Real Estate, told Multifamily Dive. “We considered it a price-per-pound play since the price went from $110 million in January 2022 to buying it for $70 million.”
The Mark at Weatherford, built in 2021 and 94% occupied, sits on an 11.5-acre parcel adjacent to Weatherford College. The property has a mix of one-, two- and three-bedroom floor plans and its amenities include community picnic areas, a resort-style pool, a business center, a dog park and a fitness center.
“The property is in great condition with nothing really needed,” German said. “The value creation will come from in-house, better management. We will be adding pickleball courts, landscaping upgrades and implementing other income strategies.”
Finding funding
Even with the quality of the asset and the price, lining up debt funding took work. But there was significant interest, according to Nova Capital Managing Director and Founder Steven Yazdani, who lined up financing for the property.
“The asset is a newly built Class A apartment community in a high-growth market, and capital providers appreciated the fact the acquisition was being purchased at below replacement cost in a solid market with strong fundamentals,” Yazdani told Multifamily Dive.
Nova Capital, a Los Angeles-based real estate capital advisory firm, secured a combined $55.85 million in financing for the deal, including a $37.85 million Fannie Mae senior loan from Bethesda, Maryland-based real estate finance and advisory services firm Walker & Dunlop and $18 million in preferred equity from Los Angeles-based real estate private equity firm Tryperion Holdings.
Yazdani said the preferred equity space has both new groups who see an opportunity to provide capital capital in the current environment and established firms. “We received several preferred equity quotes from different capital providers,” he said. “We ultimately narrowed our choices down to groups who have closed behind agency financing.”
With ample financing still available for the right deals, don’t expect The Mark at Weatherford to be Darwin German’s only purchase. “We are looking for more deals from motivated sellers on good quality assets,” German said. “Now is the time to buy great properties in good areas. There is still a large spread in bid-to-ask, and the only deals come from motivated sellers that must sell.”
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