ONE MAN’S THRIVING GAYBORHOOD IS ANOTHER’S MONTROSE VALUE-ADD PORTFOLIO 
What is the Montrose Value-Add Portfolio? “48 apartment-units, 13 townhomes, 1 quadraplex and 5 rental homes with 8-units that include 2 garage apartments; for a total of 73 units, 67,960 rentable square feet, with a land tract of 2.09 acres.” Writes a reader who came across the listing: “This is where I live. I love the phrase ‘The Montrose Value Add Portfolio,’ it practically screams ‘knock it down!’ So much for my old gayborhood!” The properties are all within walking distance of the MVAP’s listed address: 409 Stratford St., a stone’s throw from the always-hopping cluster of bars and clubs on Pacific St. to the north and but a little farther from Numbers and Indika to the south. No asking price is indicated in the marketing materials. [Loopnet; brochure (PDF)] Photo: Transwestern.
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Really such a shame; this is a nicely maintained property (at least, on the outside).
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I’m all about increasing urban density, but is it possible to do it in a way that isn’t so ugly?
I suppose it is worth mentioning that “value add,” with respect to multifamily and rental properties in general, more often means a property you acquire and make improvements to, whether that be interior or exterior finishes, capex, or new amenities, to achieve a higher rental rate, and thus, a higher overall value. It doesn’t really mean “knock it down.” That is referred to as a covered land play. Considering this is a historic area, I really doubt it is a knock down deal.
Interesting assortment of properties, but I have a hard time believing that a bulk sale will generate more proceeds than individual sales.
“Gayborhood” , who’s the NIMBY now eh?
I lived in Avondale, once, where all these units are located. From the description I conjecture that these properties belong to Bob Herolz or his assigns. He is a pretty good landlord and takes really good care of his property.
I remember when Arthur Talk owned this property. If I am not mistaken, his nephew got greedy and somehow wrested control of the property from his uncle and at the same time evicted him from his home in the Lamar Tower and Mr. Talk passed away shortly thereafter.
Montrose may indeed be “historic” but COH certainly doesn’t see it that way. If the developer wanted to level this entire portfolio once the leases have expired he could, he could do it in a day and they’d say nothing. The developers completely control Houston, they pretty much do exactly how they please, unfettered. It’s that kind of arrogance that leads to advertisements on park land and clear cutting of trees on COH property. They’re so used to doing whatever they please that they’re stunned when citizens actually MAKE the city enforce the laws. I’m sure this entire portfolio’s days are numbered, start looking for a new place to live and forget the COH helping even with the Mayor (what a joke) as a neighbor.
There is no “value add” with the pricing they’re trying to get. They’re pricing at top of the market, full “retail”.
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“Value add” suggests you’re getting blow market and can put in some capital improvements to add value (value that would exceed the cost to add that value).
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This will be a target for someone that wants a super conservate investment with a corrosponding conservative return.
Cody, what are they asking for the property?
This is historically zoned, so no developer is going to pay the $$$/psf of land the marketing firm who was hired to sell this deal themselves…as in they are not co-oping and have zero experience in Montrose selling this type of property. The question is about density – our glorious mayor and her swat team has handicapped the property rights of owners who own deals like this in the historical designated areas of Houston Montrose and Heights…so basically there is no plan “B” for these assets – they will be C level apartments offering the cheapest rental rates in the Montrose catering to the most affordable tenant type that wants to live close in. It is extremely hard to take an old property like this to the next level – and the COH does not make it any easier. I heard price expectations are high, but he market of experts who understand these properties realize how much work is required with essentially no return going in. What a deal. I can’t wait till I get the call asking me to bring them a buyer.
chifafa, you’re correct. It’s the properties formerly owned by Arthur Talk. I don’t know the relationship of the brothers now owning/managing to Mr. Talk, but can say that the lack of maintenance in the last few years has been an indicator of what is now happening. I would like to think someone would buy and renovate, but don’t hold much hope and have already started the relocation process. As far as the asking price, there is one website that has quoted between 645K and 735K for just the 409 building (16 one bedroom units total), I’ve not seen a price on the others at this point.
Brian knows of what he speaks. My only exception would be that someone will likely pay an overly inflated price just to get something in Montrose. I say that because each time I’ve laughed at a Montrose multifamily listing price, I’ve seen it sell.
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We’ll wait a bit till they realize it was a bad buy and get it at a reasonable price. And buy some $20k/door stuff just a few miles east in the meantime.
The 5 rental homes are protected from demolition or alteration by the Avondale West Historic District. As Brian mentioned, the apartments and townhomes are within the district, as well. They can be torn down, but whatever replaces them must be compatible with the original houses in the district. So that means single-family homes or something that looks like a single-family home. 10 of them to be exact. That’s how many were lost at that location in the 1960s.