Archway Equities (Archway) has acquired from HLC Equity, the 192-unit Toscana Apartments, in Carrolton, Texas, one of the fastest growing suburbs in Dallas. The purchase represents Archway’s second apartment investment in the immediate submarket and increases the Beverly Hills, Calif. real estate investment firm’s Texas holdings to approximately 3,000 units.
“We strongly believe in the fundamentals in Texas, particularly for multifamily investments,” said Archway Vice President Jeffrey Moghavem. “With the Lone Star State’s business-friendly approach, coupled with the impressive growth of Dallas-Fort Worth, one of the most populous metros in the country, we remain very bullish on the market and will continue expand our already significant presence here.”
Archway was able to secure the deal by pre-empting the traditional marketing process due to their track record, reputation and the relationship that was built with HLC Equity.
This is Archway’s 8th transaction in the last 18 months.
Built in 1986 Toscana Apartments is a multi-family community with amenities that include a clubhouse with fitness and business center, resort style pool, picnic areas with barbecues, and a pet play area. Located at 17910 Kelly Blvd., Toscana Apartments is just minutes from the Dallas North Tollway and President George Bush Turnpike and is in walking distance or a short drive to numerous recreational, retail and restaurant options.
Archway plans to execute a capital improvement program which will include renovating the interiors of more than 50 percent of the units and enhancing common area amenities including the leasing office. The community was 99 percent leased at closing.
“When we originally purchased Toscana, we recognized the solid value proposition that the property offered given its strong location, and our ability to execute a value-add business plan. We are happy to have been able to deliver above market returns to our investors and to HLC Equity principals,” said Daniel Farber, CEO of HLC Equity. “Not only are we pleased to have exceeded our investment goals, but Toscana has also helped solidify the business case for our hybrid Layers model, showing that there is significant demand in the market for mid- to long term serviced apartments in traditional multifamily assets.”
Despite the sale, HLC Equity’s portfolio remains strong in the Dallas market, including a newly developed Class-A multifamily community called Southgate Apartments that HLC acquired in Q2 of 2022.
“Dallas has consistently delivered strong returns to HLC Equity and our investment partners, and will continue to be a focal point as we look to acquire new properties and expand our footprint,” added Farber.
Under the management of Dave Molitor, HLC Equity’s Head of Operations, Toscana’s average monthly occupancy rate was over 94 percent where it became the first to implement Layers, HLC’s operating model offering both serviced and conventional apartments to the growing mid- to long-term rental market.
The acquisition was leveraged with attractive bank financing.
David Austin and Rob Key of JLL brokered the transaction.