FEBRUARY 06, 2019|CRAIG DONAHUE
New York Investment Firm Buys Arlington Commons
A New York-based investment firm purchased a 353-unit apartment complex in Arlington, Texas, dubbed Arlington Commons, for an undisclosed price.
The Praedium Group acquired the complex from The Nehemiah Co., which developed Arlington Commons. Nehemiah broke ground on property in 2016 and completed construction this past year.
Located at 425 E. Lamar Blvd., the mid-rise complex consists of a four-story building with an attached parking garage. Arlington Commons offers a mix of one- and two-bedroom floorplans, ranging in size from 580 to 1,418 square feet.
“The acquisition of this property fits well within our strategy of purchasing quality assets in growth markets,” Peter Calatozzo, managing director at The Praedium Group, said in a statement. “The Dallas-Fort Worth metroplex continues to experience substantial population growth and strong employment gains, which have been and continue to be facilitated by a significant number of corporate relocations and expansions within the MSA.”
Bob Helterbran and Lew Wood of Younger Partners Dallas LLC brokered the deal on behalf of the seller.
Younger Partners rang in the New Year by brokering the sale of Arlington Commons — Arlington’s first market-rate Class-A multifamily development (outside of student housing) — for an undisclosed price. The public-private partnership has been almost a decade in the making and is already achieving goals set by City of Arlington leadership, neighborhood groups and developer, The Nehemiah Company.
In 2018, Arlington-based The Nehemiah Company completed the 353-unit first phase of Arlington Commons at 425 E. Lamar Blvd. It was sold to New York City-based national real estate investment firm, Praedium Group. Younger Partners’ Bob Helterbran and Lew Wood negotiated the sale.
“The city and community worked for years to encourage a developer to step up in this area with redevelopment. No developer was willing to take the risk. We live here and believed strongly in Arlington and this submarket,” says The Nehemiah Company President and Partner Robert Kembel.
“It is good for Arlington and our company to demonstrate that Class-A housing works so well in Arlington. We are grateful to the City Council and Tarrant County Commissioners for giving us the tools to make this successful for all of the stakeholders in the region.”
Around the mid-2000s, Arlington City Council saw an opportunity to replace three aging apartment complexes on Lamar Boulevard, with high-quality housing and a goal of increasing the city’s property tax base while spurring additional investment. To achieve the goal, city leaders were willing to provide economic development incentives to the developer and allow higher density units to get the most bang for the buck. Unfortunately, there were no developers willing to take the risk, so city leaders approached the Nehemiah Company to find a solution.Arlington Commons
“With our success with the Viridian housing development along some hard-to-develop land in North Arlington, former Mayor Bob Cluck and the council approached us to consider a redevelopment effort within the Lamar/Collins overlay,” Kembel says. “The assessed valuation of the target properties was $10 million before demolition. After the first phase of Arlington Commons, the property is valued at $40 million and by build-out, we anticipate the value to reach $200 million or higher. We are proud that the project has received unanimous support from the Arlington City Council and a ‘thumbs-up’ from neighborhood groups, the school district, and other stakeholders.”
Prior to this redevelopment, property values were declining in the area; now they’re on the rise with the creation of this pedestrian-friendly project, Kembel says. The traffic study supported a more pedestrian friendly street section allowing for a new linear park in the median adjacent to the project. These types of trails and parks are significant quality of life additions expected today by young professionals.
“Without Younger Partners, this project wouldn’t have happened and have the success it has experienced,” Kembel says. “Early on, Younger Partners was working to assemble this land. We were having difficulty locating owners and convincing them to sell to us. Younger Partners stepped in and made it happen.”
Arlington Commons consists of a four-story elevatored building with an attached structured parking garage, 10- to 12-foot ceilings, and views of the adjacent Rolling Hills Country Club golf course, Downtown Fort Worth, and Downtown Dallas. The property’s unit mix consists of one- and two- bedroom homes ranging from 580 to 1,418 square feet. Unit interiors feature granite or quartz countertops, stainless steel appliances, undermount sinks, designer backsplashes, chrome finishes, electronic door entry, vinyl plank wood flooring, custom track lighting, full size washer/dryers, and balconies or patios. Community amenities include a swimming pool, resident lounge and business center within the clubhouse, wellness center with fitness on demand, valet trash, dog park with dog wash station, electronic parcel lockers, and a lounge deck with barbecue grills.
“Arlington has had a dearth of multifamily deliveries. Excluding student housing, only two new market rent projects other than Arlington Commons have been built since 2004 and no new projects are under construction,” says Helterbran, one of the brokers on the deal. “Arlington
Commons continues to outperform the surrounding multifamily market because of its top-of-class location, quality construction and lack of supply for a demographic group that demands excellence. Leasing velocity continues to accelerate without any rental concessions, confirming the depth of this target market.”
The multifamily complex is 85 percent occupied with approximately 65 percent made up of young professionals, he says.
Helterbran says The Nehemiah Company’s multifamily expertise and historical track record with the City of Arlington and Tarrant County, coupled with the city’s commitment to the revitalization of the Lamar/Collins area of North Arlington, led to the private-public partnership for the development of the property and streetscape improvements along East Lamar Boulevard.
Arlington Commons is centrally located within the Dallas-Fort Worth MSA and roughly equidistant from the major employment centers in both downtown Dallas and downtown Fort Worth. The property provides great accessibility and connectivity throughout the Metroplex, as it is proximate to I-30, SH-360, and SH-161, and sits only 12 miles south of the DFW airport.
North Arlington is proximate to both a growing employment base and an expanding entertainment district. The property benefits from close proximity to a diverse employment base such as GM Financial, D.R. Horton, General Motors, the Great Southwest Industrial District, the University of Texas-Arlington, Texas Health Resources, the Centreport Business Park, American Airlines Group, and UPS. In addition, the property is located less than four miles from Arlington’s Entertainment District, which includes AT&T Stadium (home to the Dallas Cowboys), Globe Life Park/Globe Life Field (home to the Texas Rangers), Texas Live!, and Six Flags Over Texas/Hurricane Harbor.