Argosy Invests in the Austin Multifamily Portfolio
On December 1, 2016, Argosy Real Estate Partners III, L.P. and its parallel Funds made a controlling investment in the acquisition of a two-property multifamily portfolio totaling 542 units in Austin, Texas. The Austin Multifamily Portfolio consists of Pecan Grove, a 192-unit, 1983-vintage, garden-style apartment community; and Parkside at Lake Creek, a 350-unit, 1984-vintage, garden-style apartment community. The properties were acquired at favorable cost bases, below comparable trades in the market and at a significant discount to replacement cost.
The properties currently average 96% occupancy with stable historical operating performance. The business plan is to complete moderate capital improvements on both properties to enhance interiors, exteriors and common area amenities. The renovations will support top-line rent growth and meet the growing demand for improved rental product in Austin.
Austin’s well-educated population, high quality of life, relatively low cost of living compared to coastal cities, and favorable business environment have made it the fastest growing metro in the U.S since 2000. Pecan Grove and Parkside at Lake Creek are located in two separate submarkets approximately ten miles apart. Pecan Grove is located in the Midtown submarket in central Austin along Lamar Boulevard, approximately two miles north of the main campus for the University of Texas-Austin and four miles north of the state capitol and Austin CBD. Parkside at Lake Creek is located in the Northwest submarket of Austin, which is home to many of the area’s largest employers and offers access to the Round Rock School System, one of the best in the Austin MSA.
The Austin Multifamily Portfolio has been acquired in partnership with Avesta, a vertically-integrated multifamily owner/operator headquartered in Tampa with additional offices in Austin and Dallas. Avesta will provide construction and property management services for both properties. Since 2010, Avesta has acquired and managed over 12,000 units, including a portfolio of approximately 2,500 units in Austin.