A California-based real estate investment trust has purchased the 297-unit Deep Deuce at Bricktown apartments for $38.22 million, or $130,000 per unit.
The Deep Deuce complex is the third Oklahoma City metro-area acquisition in the past year for Irvine, Calif.-based Steadfast Income REIT. The real estate investment trust is investing in Oklahoma City because of its strong economy and low unemployment rate, it said in a statement.
“These latest acquisitions exemplify two key facets of our strategy — to invest in apartment communities that are located in strong job growth markets, and to seek concentration in those markets to add synergy to our operating platform, reduce operating costs and increase revenue,” Ella Shaw Neyland, president of Steadfast Income REIT, said in a statement announcing the purchase of the Deep Deuce complex and another in Austin, Texas.
The seller, Omaha-based multifamily investment firm DEI Communities, put the brick apartment complex at 314 NE 2 on the market for $39.75 million in November.
DEI purchased the complex in 2007 for $26.9 million, or $91,496 per unit. The 2007 transaction was considered the peak of the local market at the time, said Aaron Hargrove, a real estate broker for Hendricks-Berkadia, which marketed the property for DEI.
“It was a great price at the time — a lot of people thought it was pioneering on the buyer's part stretching to such a high price per unit — and it paid off for them,” Hargrove said.
The property commanded such a high sale price this time around because of the strength of the downtown Oklahoma City real estate market, said Tim McKay, senior vice president for Hendricks-Berkadia. The nearby Level Urban Apartments is 100 percent leased with a waiting list.
“We think the momentum of downtown Oklahoma City will continue, and we will see rent increases as demand continues to grow,” McKay said.
The Deep Deuce is 99 percent occupied and features one- and two-bedroom units with an average rent of $1,083.
Steadfast also bought the 360-unit Montclair Parc Apartments in Oklahoma City for $35.7 million in August 2012 and the Spring Creek Apartments in Edmond for $19.3 million in March 2012.
We think the momentum of Downtown Oklahoma City will continue, and we will see rent increases as demand continues to grow.”
Senior vice president for Hendricks-Berkadia