June 13, 2012 10:55 am
AUSTIN-Making its second Texas buy in as many months, and standing true to its intention to commit a good portion of its planned $600 million investment to the Lone Star State, MIG Real Estate added the 330-unit Cottages in Austin to its portfolio. The local deal closed on the heels of MIG’s first acquisition, that of the 372-unit Wynhaven at Willlowbrook in Houston.
Though MIG is actively seeking more multifamily properties in which to invest, MIG Real Estate CEO Greg Merage acknowledges that buyer competition for such assets has become fierce. “It’s become more and more challenging,” Merage says, adding that MIG added additional staff to make a push toward buying multifamily properties, not just in Texas but along the west coast and throughout the sunbelt states. “We’ve staffed up to increase acquisition velocity,” he says.
Merage tells GlobeSt.com that MIG likes both the value-add play and assets offering immediate cash flow. For example, Wynhaven at Willowbrook at 9611 Grant Rd. on Houston’s northwest side was acquired from Trammell Crow Co. in May 2012 for its value-add potential.
Meanwhile, Cottages, at 8515 S. Interstate 35, which MIG bought from a private investor in California in conjunction with an Austin developer, was purely a market play. The property is new enough not to need much, if anything, in the way of improvements and its occupancy is at 94%.
Still, Merage says there’s upside in that anticipated rent growth on Austin’s south side will likely be around 15% during the next few years. “That’s benefitting from economic improvement in the city overall, plus the property offers a lot of amenities,” he adds.
Charles Cirar, Michael Wardlaw, Colin Cannata and Darcy Hammar with CBRE represented the seller in The Cottages transaction; MIG was self-represented. Alliance Residential Co. will manage the property.
Merage says MIG is targeting other multifamily properties, which, if all goes according to plan, should close within the next few months. Some of those assets are in Texas; Merage says he’s looking at the four metro areas — Austin, Dallas-Fort Worth, Houston and San Antonio — for likely opportunities.