Suburban Houston Multifamily Buys Are Deal-Saving Case Study

Lynd recently acquired two apartment communities, the 372-unit Paramount at Kingwood and the 312-unit Villas of Valley Ranch, both located in northeastern Houston. The purchase price was $84 million.

The seller is Sy Li, a private Texas-based real estate investor. The two parties went to contract in March 2020, but the pandemic threatened the deal. In September, Lynd took over management of the assets, spent $600,000 on renovations, significantly boosted rents and occupancy, and finally brought the transaction to the closing table.

“This is basically a case study in what can be done to save a deal when big unforeseen problems arise,” said A. David Lynd, Lynd CEO. “After we went to contract, the properties started tanking, but we did not cut bait and run. Instead, we persuaded the owner to hire us to manage the assets and try to right the ship. Our Houston team sprang into action and just five months later, turned them around completely and got them ready for sale. Now, three years after first pursuing the purchase, we closed the deal.”

Paramount at Kingwood features one-, two- and three-bedroom units with a clubhouse, pool and fitness center. The Villas at Valley Ranch located in Porter offers one- and two-bedroom units, a pool, outdoor fireplace, dog walk and walking trails.

“It’s never comfortable handing over management to a potential buyer,” said Li. “However, since we sold a different portfolio to Lynd weeks prior to the pandemic for $161 million, I trusted David to do exactly what he said he would do this go-around, and that’s close.”

With the addition of Paramount at Kingwood and the Villas at Valley Ranch, Lynd now owns three apartment communities in metro Houston.

“We are bullish on this particular submarket given some of the infrastructure improvements,” said Constantine Scurtis, president of Lynd Acquisition Group. “With the upgrades we have already made coupled with our acquisition basis, we are excited about this opportunity.”