Reasons behind selling Tower Village

0
613
The entrance to Tower Village Apartments, commonly known as Old Mill, is located on the corner of Northgate and Chemsearch Blvd. Photo by Gabriela McCausland.

In 1994, the University of Dallas purchased Old Mill Stream Apartments on 1700 E. Northgate Dr. from the Department of Housing and Urban Development (HUD) for ten dollars, then sold to UD Property Management Corp the price of a single dollar. Over 20 years later, the university sold the complex for $20 million.

“We invested $9 million into the property,” said Interim President John Plotts. “We owned it from 1994 until August of 2017. The $9 million was recouped from rent over the next 20 years. So, in essence, it was one dollar turned into $20 million, which is a pretty good deal.”

Beginning in 2016, the late Mark Patrick “Pat” Daly, associate vice president of administration, advised the administration on the possible sale of the apartment complex.

“Pat was instrumental in the original purchase in ’94, as well as [initiating] the idea to sell Tower Village,” Plotts said. “Daly and I met with different real estate brokers, and after consulting the board of trustees real estate committee, we decided to go ahead and entertain offers.”

“Daly had recognized [that] the apartments were very old,” Plotts said. “We knew the university would need an exit strategy.”

The buildings at Tower Village have asbestos in the walls and several had foundational issues that resulted in demolition.

In the future, the complex would need more care than the university would be able to provide. Members of the board of trustees who were real estate owners and investors advised that the real estate market was at a peak and it would be a ripe time to sell.

All these factors contributed to the university’s decision.

The school received almost a dozen offers, said Plotts, two of which were for $20 million. “We had been told if we could get $20 million for the complex, that would be amazing.”

The funds of the sale were put into the university endowment. A growing endowment helps UD’s institutional reputation and asset value.

“We are guaranteed an income off of the endowment that we are not promised from owning the apartments,” Plotts said. “The money from the sale raised the endowment overnight from $56 to 77 million, and the recent market has brought [to] UD a total of $82 million.”

After interviews, SB Pacific became the finalist and purchased the property on Aug. 29, 2017. The company was chosen because they advertised adding amenities to the complex, claiming that rent would not fluctuate significantly and promising to make interior apartment updates, Plotts said.

“We also knew this company managed student apartments for University of California, Berkeley, so they had dealt with student housing before, which was a plus,” Plotts said. “They seem to have sensitivity to owning an apartment complex adjacent to a college campus.”

At the time of negotiation, SB Pacific pitched a certain number of projects to be under construction within the following three to six month period of ownership, including a fitness center, internet cafe, 24-hour packaging center and dog park.

“We told them this property is important to us,” Plotts said of the company. “Half of the residents are students … we asked what they [were] going to do to increase the amenities for our students.”

During the university ownership, Pace Realty managed and dealt with residential matters. Currently, under SB Pacific, Centra Partners conducts the business of prospects and tenants.

Centra Partners’ regional supervisor Jana Mobarak was contacted but declined to comment.

Plotts sympathized with recent difficulties students have experienced under the new property management, Centra Partners.

“I understand there have been some challenges in Tower Village, but I’m hoping we get things worked out there,” Plotts said.

Plotts mentioned the possibility that Sheryl Dellinger could maintain an ongoing relationship with the managers at Tower Village, although that is not currently the case.

“I have had no contact with the Tower Village officials since the initial meeting following the sale of the property,” Dellinger said.

Dellinger said that Student Activities Coordinator Marissa Brown has since proposed the idea to build a relationship with the managers of Tower Village by inviting them to campus to be introduced to the UD community.

LEAVE A REPLY

Please enter your comment!
Please enter your name here