470 Maxey Road, Houston, TX
Completion Date: 2013
Net Rentable Area: 205,004 S.F.
Number of Buildings: 20
Asset Type: Multifamily
Pine Creek Apartments is a 300-unit, garden-style apartment complex located in Houston, Texas. The property consists of 20 two-story buildings situated on 9.5 acres, with parking for 453 vehicles, resulting in a parking ratio of 1.51 spaces per unit. The property is well located along the west side of Maxey Road, a major north/south thoroughfare, just north of Wood Forest Drive, a major east/west thoroughfare, in east Houston. It is approximately 1.25 miles north of Interstate 10 and nine miles east of the Houston central business district, within the Northshore/Wood Forest submarket.
Ytech realized that ongoing expansion of the port and shipping channel, as well as new healthcare development, would encourage more investment in the eastern and southern portions of the Houston metro area. Demand in the Houston multi-housing market has been robust, driven by improving fundamentals of phenomenal job growth throughout the region.
Multi-housing demand gained real traction in 2013, especially in coastal technology hubs and the Texas energy markets. Additionally, Houston ranked among the top 15 markets in the U.S. in terms of net absorption of multi-housing units from 2012 to 2013. As a result, Ytech targeted this property, which is located in a working-class neighborhood near a growing employment hub.
Ytech International acquired this property through the purchase of a portfolio from an institutional hedge fund and secured a commercial mortgage backed securites (CMBS) loan for the asset.
Upon acquisition, Ytech completely redeveloped the property through capex infusion of more than $2 million and leased the units until stabilized occupancy was achieved. Its redevelopment plan involved structural, façade and roof repairs and unit rehabilitation, which was completed in November 2013. Currently, the property is at 98 percent occupancy.
The former management team had been struggling with tenant retention due to the poor site conditions. To overcome this challenge, Ytech collaborated with the Houston Water & Sewer Department to resolve ongoing drainage issues. In addition, Ytech led a community initiative to beautify the backyards of all the surrounding homes, which greatly contributed to the increase of the property’s net operating income (NOI) by 34 percent.