We are under contract on Tiburon, a 320-unit, 2007-built apartment community in northwest Houston, TX. This is a rare opportunity to acquire a 2007-vintage asset in original condition presenting significant upside through interior & exterior value-add enhancements.
We are acquiring from an out-of-state seller who is primarily an office-focused investor. Tiburon is the only multifamily asset in his portfolio, which he has owned since 2014 under third-party management. Given the seller's lack of multifamily expertise, there is significant meat on the bone for a seasoned operator with over 2,000 units owned within a 10-mile radius of Tiburon.
In over two years of deal flow review, we have not identified a compelling traditional value-add opportunity, until now.
Why This Deal Stands Out
- AAR: 23.9% / EM: 1.72x (3-year projected hold) / Avg CoC: 5% / Yield on Cost: 7.21%
- Loan Assumption: 5.82% fixed rate debt with ~4 years remaining
- 30%+ discount to replacement cost
- No new construction in a 5-mile radius
- 100% classic unit interiors (and the worst exterior paint color you have ever seen)
- 6-property comp set is achieving $115+ higher rents on average ($1,437 comp avg vs. $1,322 in-place)
- 2.5 miles from the new Apple/Nvidia AI supercomputer factory in Houston, set to open in 2026, resulting in 3,000+ new jobs
Business Plan
Tiburon’s strategy is phased:
- Curb Appeal: Repaint the exterior, improve landscaping, and complete high-impact capital upgrades immediately.
- Interior Renovations: Upgrade 80 units to platinum finishes, targeting $125+ monthly rent premiums as units turn.
- Amenity Fees: Add a $110 monthly fee for bulk WiFi and parcel lockers, generating income with minimal capital.
