Dominium Closes on 150-Units, Second Asset

BEAUMONT, TX-Continuing its move into Houston, Dominium Inc. closed on the 150-unit Park Shadows Apartments, with plans to invest $15,000 to $20,000 per door in upgrades. The transaction represents the Minnesota buyer’s second from a three-property, 390-unit class C portfolio valued at more than $15 million.

In addition to shopping around Park Shadows at 1075 Pinchback Rd., the private Keswick VA partnership seller offered the 90-unit Seville Row Apartments, also in Beaumont at 4325 Crow Rd. Minneapolis-based Dominium closed on Seville Row the first week of November. Both acquisitions were financed with Section 42 low-income housing tax credit equity, and tax-exempt bond financing, and loans were assumed.

The seller’s third asset, the 150-unit Chateau Village Apartments, is in escrow. Dominium will close on Chateau Village at 3815 W. Fuqua St. in Houston during Q1 2009.

Senior advisor Jeff Eisenhardt with Hendricks & Partners’ Houston office says the seller put the 1980s portfolio on the market because the entity’s partners want to retire. “One of the partners was in failing health and he passed away early last year,” says Eisenhardt, who teamed with Hendricks & Partners’ senior advisor Kevin McCarthy on behalf of the seller.

Eisenhardt tells GlobeSt.com that the three-property portfolio represented the seller’s only holding in the area. The transactions also represent Dominium’s first push into the Houston area. “Dominium owns a lot, mainly in the Midwest,” he adds. “They like to buy HUD properties, and also like to put tax credits on some buys.”

Seville Row Apartments is 98% occupied, with a tenant base consisting of elderly and disabled individuals. Park Shadows, a section 8 asset, has an occupancy of between 90% and 92% and a government contract on 100% of the units.

Park Shadows consists of 11 two-story buildings on 9.3 acres. The unit mix consists of one-, two-, three and four-bedroom apartments, measuring between 694 square feet and 1,275 square feet. Rents are from $518 to $747.

Seville Row has studios and one- and two-bedroom apartments in one three-story midrise building. The units measure between 461 square feet and 700 square feet, with rents running from $548 to $750.