Dallas company buys Woodhollow Apartments on Lake Shore | Business

A Dallas-based real estate company has bought Woodhollow Apartments, 4502 Lake Shore Drive, and plans to remodel the interiors of its 220 units. The acquisition is part of Performance Properties’ strategy to acquire 1,500 upscale apartment units around the state.

Woodhollow, which is located near Lake Waco and McLennan Community College, is a mix of one- and two-bedroom units averaging 741 square feet in size. It sits on 11 acres in a wooded setting, is 96 percent occupied, and amenities include a sand volleyball court, hot tub, two swimming pools and a dog park.

Since 2013, partners David McQuaid and Todd White have focused on acquiring older apartments in need of repair. They have completed more than $73 million in transactions, amassing more than 1,000 units in Dallas and creating $10 million in gross annual revenue, according to a company news release.

The company said acquisitions so far generally have required major renovations inside and out, but that Woodhollow received an exterior overhaul under the previous owners about two years ago. That allows Performance Properties “to focus on renovating interiors as the catalyst for increased returns through future rent hikes.”

“After so much heavy lifting with our first 1,105 units, which were older complexes, it will be nice to focus on creating value through significant upgrades to Woodhollow’s interiors,” Performance Properties President Pam Garcia said in a prepared statement released this week.

The company “kind of fell in love with Waco” after being shown several properties by other real estate agents from the Dallas area, Garcia said.

“We see it as a dynamic, growing area, and this submarket off Lake Shore Drive, which is close to the lake, really piqued our interest,” she said in a phone interview.

Garcia said the company hopes to redo countertops, cabinets, flooring and fixtures in the apartments, with work to be performed between occupancies.

“Turnover is rare there, so we realize some of the work may have to involve occupied units. That’s part of the challenge,” Garcia said.

She said rental rates may rise after the improvements, but Performance Properties will keep the prevailing rates of the marketplace in mind when making adjustments. She said the company will keep in mind how long each resident has lived at the complex when adjusting rates.

“We hope those living there will appreciate that we are attempting to make it one of the more premier properties in the sub market,” Garcia said.

She said the company is planning to spend about $800,000 on the upgrades to Woodhollow Luxury Apartments.

Partner David McQuaid, reached by phone, declined to comment on how much he and White spent to acquire Woodhollow.

“We see Waco as a good, solid secondary market, with a high-profile university, good hospitals, everything we like in a community,” McQuaid said.

The partnership likely will keep Woodhollow for three to five years, possibly put it on the market and then pursue other properties in the area, he said.

“We really like Waco, which has become our second level of priority behind only the Dallas-Fort Worth area,” McQuaid said.

Apartments at Woodhollow range in size from 480 to 1,200 square feet, with monthly rates from $590 to more than $815.