Station at Mason Creek :

Total number of units: 291

21500 Park Row Drive
Katy, Texas 77449

PROPERTY DESCRIPTION

ACQUISITION PROCESS
Panther and Allen Harrison Company acquired The Stations at Mason Creek on September 13, 2017, for an all-in purchase price of $125,719 per unit. The property was built in 2001 and is located directly north of I-10 and east of Highway 99 in Katy.  The plan for the property was to upgrade a large percentage of the unit interiors to Allen Harrison’s Platinum upgrade package, improve the common areas, and drive additional income through addition of 75 new carports and expansion of patio areas on ground floor units.

PROPERTY HISTORY
The property commenced paying distributions after the first full quarter of ownership (3 months ahead of schedule) and has been a consistent payer over the hold period with the exception of one quarter (1st quarter 2020, due to COVID). Over the first 3.75 years of the hold period, Allen Harrison upgraded 139 units (48%). In-place rents have grown from $974 to $1,044 (7%) while occupancy averaged 91-97%. At the end of 2020, Allen Harrison and Panther decided to hire a new 3rd party property manager, ZRS (replacing Internacional), with a plan to more aggressively market the property online and to drive rent growth through emphasis on rent increases at renewal. Since taking over in January 2021, ZRS has improved the common areas, successfully increased renewal premiums by low to mid-teens rates, and significantly reduced outstanding delinquencies.

Beginning in early 2021, market fundamentals in the Katy submarket began improving, consistent with those of the greater Houston market. Since then, we have witnessed significant investor interest for multifamily properties in Houston. In July 2021, we received an unsolicited bid for the property in the amount of $41,000,000 or $151,000 per unit. This bid exceeded our planned underwritten 5-year exit price of $149,236 per unit. Encouraged by the unsolicited offer and the growing investor appetite in Houston, Panther and Allen Harrison marketed the property for sale on August 19, 2021, with a call for offers on September 21, 2021. The property received very strong interest and was ultimately awarded to Westmount Realty for $170,447 per unit ($49,600,000).

EXECUTION AND SALE
Panther LP’s received an 16.3% average annual return or a 1.67x multiple on invested capital (MOIC) over the 4.13-year holding period. These returns compare to our original underwriting which projected a +/-15% average annual return over a 5-year holding period. At closing, Panther LP’s received a distribution equivalent to 1.46x of their original investment (previous distributions amount to 0.21x original investment – thus the total of 1.67x).

This sale exceeded our pro-forma projections providing a 1.67x multiple to Panther FW Investors and an annual average return on investment of 16.3% over the 4.13-year holding period.