Today, the Resource Real Estate Opportunity REIT, Inc., sponsored by Resource Real Estate, Inc. (“Resource Real Estate”), announces the purchase of Houston-based Bristol Apartments. Resource Real Estate is a national real estate firm specializing in opportunistic and value-add investing in, and financing of, commercial real estate assets with a particular emphasis on multifamily properties.
The property was a Real Estate Owned (REO) asset, meaning it was foreclosed upon and bank owned, and purchased by the Resource Real Estate Opportunity REIT, Inc. for $11.4 million. This represents a 78 percent discount to the property’s estimated replacement cost of $53 million. In August 2010, Fannie Mae foreclosed on the property which had an outstanding loan balance of $18.6 million, as reported by Trepp.² Trimont Real Estate Advisors, acting as special servicer on behalf of Fannie Mae, sold the asset.
Bristol Apartments includes 856 units, approximately 691,000 rentable square feet and has an occupancy level of approximately 52 percent. Resource Real Estate Opportunity REIT, Inc. plans to invest additional capital to improve the overall condition of the property in order to bring all units to leasable condition, stabilize the occupancy rates and increase the property’s value by making it cash flow positive. Exterior painting, landscaping and significant upgrades to the common areas will be made in an effort to enhance the property’s appeal and marketability. Property amenities include a clubhouse, swimming pool, fitness center and playground. Resource Real Estate manages 10 other properties in the greater Houston area, totaling over 3,000 units.
The acquisition of the Bristol Apartments – a distressed multifamily REO property experiencing operational and capital deficiencies and in need of stabilization – is a good example of the type of properties that the Resource Real Estate Opportunity REIT intends to acquire. Bristol Apartments has excellent visibility and proximity to strong employment bases in the area including the William P. Hobby Airport, the Port of Houston, various medical facilities and retail establishments including Wal-Mart, Target and Macy’s.