Passco Companies, a privately held California-based commercial real estate company that specializes in acquisition, development, and property and asset management throughout the U.S., has acquired Boterra Bay Apartments in Baytown, Texas.
The firm is rebranding the 384-unit, Class A+ multifamily community as Sapphire Bay Apartments. This is Passco’s third multifamily acquisition in the state, and second within the Houston MSA, in less than four months, according to Jake Niles, Director of Acquisitions – West at Passco Companies.
“While we’ve been bullish on the greater Houston area for some time due to its solid fundamentals, the Baytown submarket also uniquely benefits from a strong economic and employment base driven by the largest petrochemical hub in the world,” explains Niles. “Several company expansions totaling over $12.5 billion, including those of ExxonMobil and Covestro, are currently underway or were recently completed within 10 miles of the asset. This growth will bring more than 650 new jobs – and many potential residents – to the immediate area.”
Niles also points to continuing increases in the volume of petroleum and other chemical exports from the Port of Houston, the second busiest port in the United States, as indicators of future growth.
“The opportunity to acquire a best-in-class multifamily asset in this thriving and expanding economy was one that we could not pass up,” continues Niles. “Despite its reputation as an industrial base, Baytown is also seeing growth throughout diverse sectors including hospitality and healthcare, for a total of more than 6,000 jobs projected to be added over the next five years.”
Niles adds: “Further, the city has a thriving suburban community and local leaders dedicated to maintaining a high quality of life for their residents. For example, Baytown is served by the Goose Creek Consolidated Independent School District, which was recently granted a nearly $500 million bond for school improvements.”
He also notes that the $100 million redevelopment of the San Jacinto Mall into the San Jacinto Marketplace, which will be a 1 million square-foot open-air shopping center, as well as a revitalization of Baytown’s downtown area, further drive the appeal of the city as a place to not only work, but to live and play as well.
“This asset was also attractive to our team because it experienced a rapid lease-up following its 2018 construction,” Niles says. “While projected apartment absorption in Baytown is nearly 1,300 units over the next five years, there are only 336 units currently under construction, so we anticipate resident demand for the property will only increase.”
According to Niles, the multifamily development pipeline is likely to remain limited due to tight zoning restrictions. Apartment communities in Baytown cannot occupy more than 15 acres and must be at least a half mile from each other.
Thomas Alleman and Brandon Miller of Newmark Knight Frank represented the sellers in this transaction: A joint venture between Houston-based The Boterra Group and Dallas-based Edison Capital Holdings.
Alleman notes: “We were excited to play a role in the sale of this best-in-class asset located in one of the strongest performing submarkets of Houston. It was a pleasure to work with the Passco team, who ran the process very professionally.”
On the property level, the three-story, garden-style Sapphire Bay Apartments offers luxury amenities including a large lounge pool with in-water tanning deck and private poolside cabanas, fully equipped fitness center with top-of-the-line Precor fitness equipment, yoga and spin studio with Fitness On-Demand technology, outdoor kitchen with gas and charcoal grilling stations, courtyard fire pits, an expansive dog park with puppy pool, a pet grooming station, a business center, a clubhouse with large kitchen for entertaining, and 24-hour resident package lockers.
The community’s one-, two-, and three-bedroom units feature smooth gray kitchen cabinetry, granite countertops in kitchens and bathrooms, Whirlpool stainless steel appliances, large side-by-side Whirlpool refrigerators with water and ice dispensers, single basin kitchen sinks with goose-neck faucets, sleek tile backsplash, gray plank style wood flooring, cut Berber carpet in bedrooms, ceiling fans with overhead lighting, and large walk-in closets.
The property is located at 99 W. Cedar Bayou Lynchburg Road in Baytown, Texas.
Chris Black and Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing on behalf of Passco Companies.
About Passco Companies, LLC
Passco Companies, LLC is a nationally recognized market leader in the acquisition, development, and management of multifamily and commercial properties throughout the U.S.
Passco offers a full set of real estate services including asset and property management, leasing, as well as property development and construction.
Headquartered in Irvine, California, Passco currently has $2.98 billion assets under management across the country and is actively growing its portfolio in primary and secondary markets throughout the United States.
About Newmark Knight Frank
Newmark Knight Frank (“NKF”), operated by Newmark Group, Inc., is one of the world’s leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 16,000 professionals operate from approximately 430 offices on six continents. NKF’s investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management.
