By: Robin Shannon, Reporter, December 16, 2014
A local investment group led by developer Joshua Bruno has acquired the 336-unit Oakmont Apartments complex in Algiers from an Illinois-based real estate trust.
The deal is part of an ongoing trend of multi-family acquisitions throughout the New Orleans metro area and the Gulf South Region, according to local market analysts.
Bruno, along with attorney Rajan Pandit, purchased the 16-acre property for $10 million through an entity known as Westbank Holdings, LLC. An $11.3 million mortgage through First NBC Bank was part of the financing package, according to Orleans Parish conveyance records. The deal was finalized in September.
Parish records list the seller as IMCC Oakmont, LLC, a subsidiary of Chicago-based Inland Real Estate Group. The company purchased the complex in 2011 for $15.2 million.
Bruno said Oakmont’s location, at 2200 Westbend Parkway just off Gen. DeGaulle Drive in Algiers, helped make the property an attractive purchase. He said he is hoping to make the units attractive to those working in the downtown service industry and the growing Tulane Avenue medical corridor.
“This acquisition is ripe for repositioning at a time where New Orleans is under increased housing demands with an inadequate supply for the metro area workforce,” Bruno said. “It’s also in an area near the growing Federal City complex.”
Bruno’s own MetroWide Apartments has been retained to manage Oakmont. The company manages more than 2,200 units across the greater New Orleans area. MetroWide takes over for Latter and Blum, which managed the property for Inland.
Multi-family real estate broker Larry Schedler, who represented the seller, said the Oakmont property garnered lots of interest and multiple bids when it hit the market. He said the deal is a good indicator of the strong demand for properties in the region.
“There is a lot of capital chasing good solid assets,” Schedler said. “The issue is the shortage of supply, not just in the New Orleans area, but across the region.”
Schedler said some sellers are still a little cautious with assets because of a lack of confidence in getting the return on investment that they want. He said some owners could loosen up if demand continues to grow.
“With 336 units, Oakmont was kind of in a sweet spot for investors,” Schedler said. “It sold for about $29,700 per unit.”
From a rental standpoint, Schedler said the Algiers submarket has seen substantial growth. Average rental rates have grown from $733 per month in April to $743 per month in October. Occupancy is about 95 percent across the market.
The Oakmont property is composed of one- and two-bedroom units with rents ranging from $650 per month to $950 per month. Bruno said the property is currently 98 percent occupied, which is up from about 80 percent when he acquired the units.
Bruno said he is planning a series of improvements to the property, including upgraded community areas, covered bike racks, heightened security features and cosmetic and landscape improvements.