NEW NORTH MONTROSE APARTMENTS LEAVE HANOVER, MOVE TO RIVER OAKS 
Residents of the recently opened Hanover West Gray apartments at 1340 West Gray got an unexpected notice in their mailboxes this month: Their new homes at the corner of West Gray and Waugh (replacing the Tavern on Gray and some neighboring structures) now feature a River Oaks address. Hanover sold the 275-unit structures effective March 13 to AMLI. And the new owner is calling the complex AMLI River Oaks, after the tony no-apartments-please neighborhood whose eastern border is three-quarters of a mile to the west. [Houston Chronicle; previously on Swamplot] Photo: Hanover Company
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I guess “AMLI River Oaks Adjacent” didn’t have the same ring to it.
I wonder why Hanover sold to AMLI?
I always chuckle at how many businesses and apartment complexes have River Oaks in their name and they’re nowhere near RO. Sorry, but if you’re east of Kirby (or Shepherd if you’re being generous), west of the RR tracks and south of Westheimer, you ain’t in River Oaks.
Joey: My guess is AMLI was willing to buy at a stupid low CAP based on future financials, which allowed Hanover to pull out $$$ to fund other deals, so they could rinse-wash-repeat
I’m pretty sure the Hogg Bros didn’t include this in their River Oaks footprint. I get the reason they changed the name, however, an apartment in a prefab mid rise isn’t exactly a mansion on Lazy Lane backing up to the RO Country Club. When I think of living in River Oaks I assure you the AMLI “River Oaks” is hardly what I have in mind.
Parameters of River Oaks—Buffalo Bayou to the North, Shepherd (not Kirby) to the East, Westheimer to the South (removing the Oaks Estates and some of the area around The Huntingdon) and the rail tracks to the West—anything else NOT River Oaks–it’s not rocket science.
I live in the Hanover West Gray… ooops, Amli River Oaks & most of the people here were surprised to say the least. Everybody got a wine bag hanging on their doors with just a little note about the change, no detail at all and no wine!
Realtor who works the area told me Hanover has a rep for building apts. and then selling them off. Who knows? It’s a nice place to live but everybody’s a little nervous here.
Hanover is a fee developer. Their share of total capital contribution toward a new project might be in the neighborhood of 5%, with the balance comprised of capital raised from institutional investors desiring be limited partners in the deal and from banks providing debt; for handling the nitty-gritty, their limited partner(s) pay them a substantial fee. Their business model is strictly to get something built, lease it up, burn off concessions, sell, and start over again in order to go after a new fee. Their investors like the deal because it offers much higher ROI than buying an already-built totally stabilized Class A+ asset in a top-tier market.
AMLI is approaching this from a different perspective. They’ve been able to raise capital that wants safety more than anything, and a complex like this in this location is very very safe. AMLI is an experienced operator. They know what they’re doing. Anybody that was going to be in a position to deploy safe capital is going to have that kind of track record. They’ll probably hold it for a reasonably long time and dump it as an A- asset that needs some updating, years and years after any of the original tenants have moved out.
There is nothing to worry about. It’s not a special case.
Of course we all know whats next. Can’t have ‘River Oaks’ in the title without having a rent increase to match the panache of the name.
AMLI River Oaks sounds like a movie theatre. I imagine they’re thinking they can charge more rent now as newcomers to Houston will be gently duped.
@ The Niche – 100% correct on all fronts. Anybody know the per door price and/or occupancy at time of sale? AMLI is a very good and highly aggressive operator, they know what they are doing. All it does is show that AMLI is going long and has positive outlook about Houston. From the last two deal in Houston that would be close to 600+/- doors, and somewhere around 200MM worth of assets acquired.
Right. The geography is a stretch. However, after a recent apartment search, I can say that the AMLI properties seemed well-run and maintained. I don’t think the tenants have anything to worry about. The only thing that bothers me is that they tore down The Tavern. Best Steak Night ever.
@ theniche –
Accurate description of AMLI – they buy these babies when they are hot, shiny, and new then dump them on some schmuck desperate for their sloppy seconds. All you have to do is travel a few blocks to the former AMLI Towne Square now “Standard” on West Dallas for evidence. I think AMLI’s 2121 is probably next on the selling block.
Oh nooooo… the wifey and I had taken to calling this place the Hangover West Gray. There’s just no chortle-inducing way to make fun of “AMLI”.
I attended the Planning Commission meeting on the variance request. The developer promised to add benches and street lighting to assuage neighborhood concerns about traffic… so they added, what two benches and two lamps. Cheap.
Nonetheless, infinitely preferable to the dumpy bar it replaced…
@ JB3: I wouldn’t describe the eventual buyer from AMLI exactly as a “schmuck”. They’ll be what’s called a value-add buyer that does some refreshing work to units as they turn over in order to bump the rents; and then they’ll sell to yet another long-term buyer looking for a safe spot to park some capital. That’s pretty much the multifamily life cycle.
The only guys that I might describe as schmucks are the ones that buy at the end of an appreciation cycle or that never manage to keep a sufficient pool of operating reserves for contingencies such as paying an insurance deductible. They’re certainly out there; although really, anybody can become a schmuck. You often don’t anticipate being one until you are one.