23 November 2009

New Neighborhood Taking Shape In Old East Dallas

Dallas Morning News

When developer Mark Culwell chatted with his general contractor at the corner of Belmont and Bennett avenues a couple of years ago, the construction executive kept looking over his shoulder.

"He didn't feel safe standing here," said Culwell, senior vice president of development at United Dominion Realty.

There's no fear factor now. The jumble of run-down rental units and ramshackle houses is long gone from the Old East Dallas intersection.

In their place, developers have built an urban neighborhood that would be at home in Dallas' hot Uptown district.

So far, prospective renters don't seem to have any trouble migrating to Dallas' newest rental enclave.

"Most of them are coming from Uptown and downtown," said sales specialist Karly Kuby. "And we've had a few who are moving from out of town.

"We just moved our first resident into the project," Kuby added.

With 465 units, UDR's new Belmont apartment community occupies almost four blocks between Fitzhugh and Henderson avenues just east of North Central Expressway. Next door, another developer – Phoenix Property Co. – has just finished 182 apartments in its Eastwood on Henderson complex.

Together, the developments represent the biggest block of new housing constructed in the area in decades.

So how's all that working out with the recession?

"Our leasing traffic has been good," said Culwell, who's spent almost three years working on the project.

"We've been kind of holding our breath – it's not the perfect time of year to be opening a project like this," he said.

Or the perfect economic environment.

But on a recent Friday morning, potential tenants lined up to tour the new apartment buildings, which have the latest in architecture and – on the upper floors – killer views of downtown Dallas.

A month's rent will run between $800 and $2,000, depending on the unit's size and location.


The apartments offer three price levels of interior finish – from laminate countertops and carpet to granite in the kitchen and hardwood floors.

"So hopefully, we won't lose anyone because of our price points," Culwell said. "We want to have something for everyone."

To sweeten the deal, the landlord is throwing in a 42-inch HDTV as part of the appliance package in every unit.

"We are doing it in our apartments everywhere in the country," Culwell said. "We are buying a lot of TVs."

UDR has more than 150 apartment projects stretching across the county. Along with the Belmont project, the publicly owned developer is also building a large rental community in Addison.

To make the East Dallas project appeal to new urban residents, the developer added wide sidewalks along the streets, lush landscaping and streetside patio areas.

"This is not a retail location," Culwell said. "But we wanted to make the outside inviting and encourage people to walk. "We are just a couple of blocks away from all the new restaurant activity on Henderson Avenue," he said.

Mostly welcome

Phoenix Property's new Eastwood apartments next door are at the busy intersection of Belmont and Henderson. The seven three-story apartment buildings are designed in what the developer calls "mid-century architecture."

The first residents have already moved in.

Homeowners in the nearby Cochran Heights neighborhood between Henderson and Fitzhugh are mostly pleased with the dramatic transformation.

"The Dallas apartments have cleaned up that strip and are a nice asset to the area," said real estate agent Mitch Deshotels, immediate past president of the Cochran Heights Neighborhood Association.

Arlene Colbert, a longtime resident of the area, says the apartments are welcome for the most part.

"The apartments definitely improved the looks of the area, even though the apartment buildings are rather stark-looking," she said.

"We are worried about the traffic, particularly in the first two blocks of Henderson, east of Central.

"It is already really bad with no solution in sight."

Brook Furniture Rental Joins Houston Apartment Association


As part of its overall plans in Houston Texas, Brook Furniture Rental has joined the Houston Apartment Association. "The Houston Apartment Association is an important organization in Texas, and we are proud to have joined it" said Rob Pruim, Manager of Brook Furniture Rental in Houston. "We have already attended one event and we were able to meet some great people who work in many apartment communities and property management companies across the greater Houston geography.

These individuals are excited to have a new choice for their furniture rental needs, especially a company focused on high quality furniture and reliable service. Our rental furniture services are perfectly situated for the needs of the Houston apartments and housing market." Brook Furniture Rental operates throughout many markets across the country including the major Texas cities of Dallas, Fort Worth, and Austin. The company is proud to be a member of local apartment associations across the country, including in Texas the Apartment Association of Greater Dallas, as well as the Austin Texas Apartment Association.

"Apartment communities play a critical role in moments of transition for many people" said Bob Crawford, President of Brook Furniture Rental. "We have found that building strong relationships with apartment communities and apartment associations enables apartment communities to be responsive to individuals that find themselves requiring short term housing immediately. These occasions can be business related or personal related, and include traveling business executives, those people working on short term projects that are IT related or involve restructuring or integrating business units, professional athletes or those who have suffered a home loss due to natural disasters. In Houston, we are ready to collaborate with apartment communities to assist people in their individual transitions. We have a proven track record of meeting the discerning requirements of our customers."

Founded over 30 years ago in the Chicago area, Brook Furniture Rental expanded into Texas  apartments in 1999 first to the Dallas / Fort Worth Metroplex and later into Austin Texas. As the largest city in Texas, and with a large diverse economy, Houston is one of the larger furniture rental markets in the US. 

Brook Furniture Rental specializes in providing temporary furniture for individuals who are moving to new locations, have been displaced through fire or water damage and have lost their homes, or who are in the process of staging their homes.

18 November 2009

AHF, Happy State Court Case A Tangled Mess

from Amarillo.com

A second attempt by Happy State Bank to collect $1.7 million from an entity affiliated with American Housing Foundation proved just as fruitless as the first.

"After hearing your explanations, it's an even more complicated issue than the complicated one I thought it was," U.S. Bankruptcy Judge Robert Jones told attorneys in the case Monday.

Previously, a Thursday hearing ended when some of the complexity was made clear as attorneys on video feed, speaker phone and in the courtroom started to make their cases. The hearing Monday had all the parties in court, but it ended with Jones saying he'd consider it a preliminary hearing and scheduling a December hearing.

Happy State Bank lent Multi-Family Rehab Partners - it's a partnership consisting of AHF, Catherine Koehler, Mary and Maurice Schooler, Louise Conley and their personal trusts - $2 million in 2008.

The members formed Multi-Family Rehab Partners in 2004 and guaranteed loans for a variety of projects, including Three Fountains and River Falls apartments in Amarillo. The partnership didn't own any properties but would funnel money into ailing projects as a way of keeping them in operation, said John Ben Blanchard, an attorney for Happy State Bank.

AHF founder Steve Sterquell put up $1 million in 30 certificates of deposit as collateral for the $2 million loan. He signed bank agreements as a representative of AHF, which was a minority partner in five partnerships and limited corporations. Those entities funded the CDs with the security deposits of residents of their properties.

The picture is further clouded because Happy State originally lent Multi-Family Rehab $500,000 secured by 13 CDs, many owned by the different entities. In April 2008, AHF used the CDs and other money to create 30 CDs, and Happy State Bank lent Multi-Family Rehab the $2 million in exchange for the CDs as collateral.

The CDs have continued to earn interest, and the bank wants to foreclose on them, but federal laws require it to seek permission because bankruptcy proceedings freeze the collection of debts, and AHF, now in bankruptcy, guaranteed payment of Multi-Family Rehab's loan.

The various partnerships and corporations that funded the CDs object to Happy State's move, claiming the CDs belong to them. The U.S. Department of Housing and Urban Development also objects, because federal housing money that went to the projects are not to be used to benefit other projects. The entities own the Amarillo Bel Aire Apartments and other apartments in Austin, College Station and Waco.

AHF is an Amarillo-based nonprofit that buys, renovates and manages affordable housing projects across the country through hundreds of partnerships and corporations registered with the Texas Secretary of State's Office and in other states.

According to the foundation's Web site, it operates 14,000 units - including Texas apartments, plus housing for university students and senior citizens.

Court records show more than $90 million in claims against AHF by creditors and investors.

Sterquell used some of the $2 million in loan proceeds to pay off notes for other entities and sent $1.3 million to the Wells Fargo account of AHF Development, which court papers have described as a "bank" for various AHF projects.

The loan was due April 1, the same day Sterquell died in an auto wreck investigators have called a suicide.

AHF has filed for bankruptcy, claiming less than $50,000 in assets.

Texas Apartments Offering Incentives To Attract Renters

from News West 9

MIDLAND/ODESSA - From a lack of housing in the Permian Basin to a lack of renters, thanks to the economy.

Many apartment complexes across West Texas are seeing empty apartments stay that way.

In fact, some apartments are offering deals and incentives to attract tenants, including free rent.

Some managers tell NewsWest 9 that people are tripling up in one bed room units.

The President of the Permian Basin Apartment Association says they manage Texas apartments from several counties, but there is one city that has been more affected than others, and it all has to do with the bad economy.

 “Right now, Odessa is the one that is hurting worse than anyone, because we are so geared to the oil industry,” David Pope, Permian Basin Apartment Association President,, said.

Sunset Apartments is holding a raffle, just to get people to come and look at their apartments.

All you have to do to get your name in the hopper is enter the drawing.

The winner will be announced in November.

13 November 2009

Texans Re-Tweak State Constitution

from the Wall Street Journal

For the 467th time, Texans voted on Tuesday to modify the state's constitution.  But that doesn't mean all the voters were quite sure what they were approving.

Since the state adopted its constitution in 1876, the legislature has frequently tinkered with the document, making changes that require approval by voters.

This year, most of the propositions passed by a wide margin, as they usually do. Only about one million of the state's 13 million voters showed up at the polls, and turnout was low even in Houston, where residents were voting for a new mayor.

In Dallas, Rene Martinez, 62 years old, found the proposition section of his ballot "very confusing." At his polling place, he rushed through that section so he could vote for his wife, who was running for school board (but didn't win).

Gaylan Burden, a 57-year-old teacher from Dallas, said she showed up at her polling place to "enforce her right as a voter," but wasn't familiar with some of the propositions. She followed to the letter her local newspaper's advice and voted yes on all 11.

The constant rewriting of the constitution has led to revisions of previous revisions. One of the changes approved Tuesday, for example, modifies a section of the constitution that bars civil servants from holding more than one civil post to make an exception for members of the Texas State Guard.

The volunteer force had been left out of earlier, piecemeal changes that had exempted other branches of the military, such as the Texas National Guard, from the rule. With the approval of the amendment, school board members and other civil servants will be able to volunteer to the state guard.

Local political mavens don't blame befuddled voters a bit. "The amendment language is too complicated and too arcane for even sensible people to spend time to figure out what's going on," said Calvin Jillson, a political scientist at Southern Methodist University.

Voters approved 11 changes on issues including beach access, property rights, texas apartments and university finances.

12 November 2009

Home Inspection -- NOT a DIY Project

from Deseret News

Question: When purchasing a home, what are some of the most common problems you find? I really would like to have the home I'm buying inspected, but money is the biggest problem right now, and we can't afford to pay an inspector. If we do the inspection ourselves, what should we be looking for?

Answer: As a Certified Master Inspector and a member of the American Society of Home Inspectors, my answer is that you cannot afford to simply pass on the home inspection. If you decide to do it yourself, you may not find major defects that would be obvious to an experienced home inspector. Depending on where you live, a home inspection should cost around $300, but the savings reaped from the inspection report is often in the thousands of dollars.

I personally have performed over 10,000 home inspections and know of inspectors who have inspected more than double that number. All those I've talked to agree that the home inspection is the purchaser's last chance to ask the seller to correct the major defects listed in the report. After taking possession of the home, the seller is out of the picture, even if you later discover you need a new furnace ($2,000 plus) or an upgrade of the electrical system ($1,200 plus). Over the years, I can recall only two occasions where the inspection report listed defects with the repairs costing less than $100.

Invest the $300. Sounds like a good investment to me. You might also consider that a DIY inspection may not be accepted by the seller as an accurate description of what needs to be done. Hiring a professional home inspector, who can explain what the defects are and how they should be repaired, leaves little room for disagreement. You should also consider that a professional home inspector is unbiased and is disconnected from the emotional issues associated with purchasing the home. The home inspector gets paid for his services whether or not you follow through with the purchase and repairs of the home. If you are determined to do the inspection yourself, here are several things to look for:

1. Grading and drainage. Make sure the home's foundation sits high and dry. The yard and rain gutters should drain away from the foundation for a least 10 feet.

2. Any and all electrical wiring should be either out of reach (6 feet 6 inches above the floor) or the wiring should be in a protective conduit.

3. Metal flue pipes must have a 1-inch clearance to combustibles. There should be a clearance where the pipe passes through the drywall ceiling or through the wood-roof sheathing. The flue pipes must also have a continuous rise from the appliance to the main chimney connection. Rusted or damaged flues need to be replaced.

4. Loose toilet bowls and stopped up sink drains. Operate all plumbing fixtures for 10 to 20 minutes to make sure all drain lines are working, and at the same time check for leaks under the fixture's cabinets and in the basement or crawl space.

5. Purchase an outlet circuit tester and check each and every outlet you can reach. You will be checking for "open grounds and reversed polarity" at the outlets. Test and reset every GFCI (ground fault circuit interrupter) in the home.

6. Operate all home and kitchen appliances (furnace, dishwasher, range, etc. Do not operate an air conditioner when the outside temperature is below 60 F).

7. Operate the garage-door opener and check the auto reverse features and the photo cells to make sure the door automatically opens if there is an obstruction in its path.

8. Natural gas and LP gas pipes require a sediment trap, also known as a dirt trap or a drip leg, on each gas pipe just before the pipe connects to the gas appliance's main gas valve. Replace any and all copper gas pipe.

9.Stairways and handrails. Make sure all stair risers are the same height (seven to eight inches) and that stair treads are at least 9 to 10 inches deep. Where there are three or more steps, a handrail is required for safety. Longer handrails and guardrails also require baluster posts set at a minimum of four to six inches apart to keep children from slipping through the railings.

10. Tempered safety glass. Windows over bathtubs, shower enclosures, patio and French doors and larger windows that are easily accessible should be tempered or protected against accidental human impact. The glass should be marked "tempered" in one corner of each piece of glass.

While these are just a portion of the components of the home, a professional home inspector will check many more details too numerous to list and has a trained eye to spot problems the DIY'er may not be able to identify.

09 November 2009

Post Investment Group, LLC, Acquires Distressed Apartment Units

PR Newswire

HOUSTON, Post Investment Group, LLC, a Los Angeles based opportunistic real estate investment firm recently announced the acquisition of two distressed multi-family projects: the 438 unit Serrano Apartments in Houston, Texas and the 300 unit Longhorn Station Apartments in Austin, Texas. These latest acquisitions serve to expand Post's distressed real estate platform. Post acquired the assets through separate joint ventures with two existing equity partners.

The two assets, though purchased separately, carried similar transaction structures characteristic of both the current real estate environment and Post's strategic directive. The properties were acquired directly from or through the special servicers, in both circumstances requiring the lender to substantially discount the outstanding principal balance of the notes and amend financing terms in favor of Post. In each case, Post will infuse significant rehabilitation and renovation capital through a focused, individualized investment thesis tailored toward short term stabilization and long term operational viability.

This method of distressed investment is a transactional direction Post has been pursuing over the past calendar year. However, until recently lenders were either unwilling or unable to discount the outstanding balance of their holdings to levels that were both in-line with market and operationally accretive. "These two acquisitions signify a discernible shift in lender expectations," remarks Jack Ehrman, Principal of Post, "in that expanded consideration is now given to the active preservation of remaining equity in lieu of blindly pursing an exit at par, an argument we have been touting for some time." In contrast to the bandwagon flock to direct note acquisition, Post has identified the foregoing as a way to capitalize on the depressed real estate market while avoiding the intangibility of loan purchases consistently void of solid underlying collateral and absent of direct operational oversight at the entity level. Mr. Ehrman goes on to add that, "While this approach may not be as lucrative on exceptional assets, it enables us to significantly reduce an investments risk-coefficient and still attain market leading returns."

The acquisitions of Houston apartments and Austin apartments increase Post's collective holdings to over 6,200 units, 1,400 of which were acquired in the second half of 2009. Jason Post, President of Post comments, "The next two to three year period will provide multiple unique and opportunistic prospects for our company." He went on to emphasize the increased importance of developing strategic relationships with lending institutions and special servicers, stating, "The processes and protections Post employs from both an operational and transactional standpoint have enabled us to further access these entities and produce constructive conversations unthinkable in prior years".

About Post Investment Group, LLC

Post Investment Group is an opportunistic real estate investment firm focused on the acquisition of multi-family assets nationwide. The company specializes is both core plus and distressed investment opportunities capitalized through private and institutional investors.

04 November 2009

Galaxy Builders Wins Awards For Texas Apartments

San Antonio Business Journal

Galaxy Builders Ltd. earned construction awards for two apartment complexes the company completed earlier this year.

San Antonio-based Galaxy earned a first place award in the Multifamily Residential category by the Associated General Contractors Texas Building Branch for its work on the Town Square Apartments project in Converse. The company also won an “Excellence in Construction” Eagle Award for the Associated Builders and Contractors (ABC) South Texas Chapter for The Park at Brushy Creek, a complex of Round Rock apartments.

Galaxy earns its two awards based on project safety, ingenuity and scope of work.

“These projects directly reflect our company and staffs’ commitment to quality and attention to detail,” says Arun Verma, president of Galaxy Builders.

Galaxy is a privately owned general contracting firm. The company has specialized in the building of multi-family and commercial construction projects since 1991.

03 November 2009

MC Companies Aquires Saddle Creek Apartments


MC Companies continues to attract new investors and acquires Saddle Creek Apartments in Carrollton, Texas. The acquisition adds 238 Carrollton apartments, bringing the investment and management portfolio total to nearly 7,000 units. 

Ross McCallister, Co-Principal and Partner of MC Companies said the company continues to favor Texas for its pro-business climate, job creation and population growth. McCallister said, "The property was acquired significantly below replacement cost making it attractive to our investors. The acquisition was financed by PNC ARCS who provided FHLMC (Federal Home Loan Mortgage Corporation) financing at an attractive rate."

About the Deal
Saddle Creek, a 238 unit, class B, garden style apartment community is a perfect fit in MC's portfolio of work force housing. The Dallas apartments are located in the suburb of Carrollton.

MC's Co-Principal and Partner, Ken McElroy said, "We were seeking a stable cash flow investment. We bought this property from Equity Residential (EQR) because the property is in excellent condition, well managed and in a great location. Employing our own management strategies will increase its operational value over the long term."

MC Residential will manage the apartment community.