AEW Capital Management has sold Broadstone Memorial, a 401-unit luxury apartment community in Houston, to Boca Raton, Fla.-based Atlantic | Pacific Cos. While the sale price was not disclosed, the buyer received $49.8 million in financing from CIBC, according to public records.
Berkadia secured the financing for the deal. AEW had acquired the property back in 2012, assuming a $26.5 million CMBS loan from the developer, Forestar Group.
The community, located at 875 N. Eldridge Parkway in western Houston's Energy Corridor, has one- to three-bedroom floor plans between 628 and 1,766 square feet. The property's website shows the new owner has rebranded it as The Atlantic Memorial. Built in 2007, the Class A community has a 24-hour fitness center, a business lounge, a multi-level parking structure enclosed within the building, and a fenced dog park.
Houston's multifamily market has shown some signs of life after nearly a decade of sluggish growth. Yardi Matrix's latest report on the metro pegged Houston's rent growth at 10.9% for the year ending in January. While this would be incredible growth during any other year, it doesn't compare favorably to the 13.9% growth nationwide during the same time frame.
That said, there are some strong indications of a future upside within the market. Multifamily absorption within Houston hit its highest level in two decades, according to Marcus & Millichap's 2022 forecast. This comes alongside a record number of people migrating to the area, much of which has been in the 20- to 34-year-old cohort, which is proportionally one of the largest renter age groups.
Investors have taken note of the shift in dynamics, with many moving to pick up smaller, lower-end assets in value-add plays. However, there is evident appeal for upscale communities like The Atlantic Memorial, particularly in the growing Energy Corridor. The Marcus & Millichap report points to increased transaction volume in the submarket, particularly for luxury assets with more than 300 units.