Eastham Capital and Mosaic Residential facilitate the purchase of a two-property Houston multifamily portfolio, Amber Oaks in Pearland and Park Place in downtown Houston. The terms of the transaction along with seller/buyer information was undisclosed.
“In general, we have been participating on more and more broker calls to back up our local partners so that the sellers know that the Eastham partners have the equity ready to close the deals,” said Matthew Rosenthal, founder and managing director of Eastham Capital. “Because of those efforts, we have won deals where our partners weren’t even the highest bidder.”
Providing certainty of closing helped when Eastham and its Houston-based multifamily owner-operator Mosaic Residential acquired Amber Oaks and Park Place in the Houston suburb of Pearland earlier this month.
“Our local partner, Mosaic, has an excellent history with the broker, and the broker knew that if Mosaic was awarded the deal, Mosaic would close,” Rosenthal said. “In addition, one of the Mosaic partners was acquainted with the seller. That always helps as well.”
Eastham Capital invested in the deal through its current fund, Eastham Capital Fund VI, LP. Mosaic, which has partnered with Eastham on multiple projects, will oversee the day-to-day management.
Eastham and Mosaic have a renovation budget of over $1 million to improve the finishes and features in units, including upgrading the appliances to stainless steel, modernizing the flooring and fixtures, updating the paint and installing smart home packages.
Amber Oaks and Park Place sit adjacent to each other and have shared amenities, including a pool, playground, picnic area, grilling station and laundry facility. Rosenthal expects to share maintenance, office and leasing staff between the communities once renovations are complete.
“We are hoping that the ability to staff share will be accretive to net operating income and eventually cash flow,” he said.
Both leasing teams will market both properties to potential residents at the same time. “This will give them more choices at varying rental rates, which should help us obtain the tenant as a customer,” Rosenthal said.
Eastham should remain busy in 2024, putting more properties under contract, according to Rosenthal. However, they will probably close next year.
“The closing window has elongated in the past few years, so we don’t see it possible to squeeze in any more closings for 2024,” he said.
