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Apartment Articles

"Trammell Crow’s rapid New Mexico Expansion"

Originally appeared inNew Mexico Apartment Report Vol. 5.1 - Q1’98
Once considered the godfather of the 1980s apartment boom, Trammell Crow Residential (TCR)s lack of presence in Albuquerque in the early 1990s indicated that they may have been another victim of the late 80s real estate bust. Not so, says Bob Hutt, Senior Partner for TCR operations in the Southwest. Based in Phoenix, Hutt and Chief Operating Officer, Jay Hiemenz have overseen the construction of some 3,000 units in Phoenix, Tucson, Denver, Salt Lake, and Albuquerque. The recent completion of Pinnacle at High Desert, purchase of an older apartment complex, Cimmaron Village and two multifamily land parcels will ensure TCRs continued presence in New Mexico. In competition with other national players, TCR has been able to build, lease-up and manage their assets on a level rivaled by few. To understand their success, one should take a tour of their current projects. Pinnacle at High Desert Located at Albuquerques most prestigious address, Pinnacle at High Desert is an A+ community. Featuring 430 units on a low density site of 30 acres, the property offers incredible amenities, architectural details, and has witnessed unparalleled tenant satisfaction. TCR obtained the site in a competitive bid process, from the High Desert Corporation, a for profit corporation controlled by the non-profit Albuquerque Academy in 1995 for an unheard of price in excess of $13,000 per unit. When other communities where leasing units at an average rate of 8 to 12 apartments per month, Pinnacle at High Desert was leasing at 45 per month. Today stabilized occupancy remains in the high 90s, with average rents in excess of $.92 per square foot. Amenities include: Vaulted ceilings, swimming pool, workout room, theatre, detached garages, and much more. Pinnacle View Formally known as Cimmaron Village, TCR recently purchase and ongoing renovation will turn this tired but well located, 1974, grade B- into the community it deserves. The properties good location, low density, and under performance attracted our interest. Our ability to pump in much need renovation capital along with a cohesive management plan led us to believe that this was not being maximized to its fullest extent. Pinnacle at High Resort What began as an ideal complement to an upscale neighborhood, turned into a three ring circus with a local city councilor and neighborhood association abusing the legal process in a three year long battle. Last month, TCR closed on this 315 unit, 18 acre Luxury Apartment site. Construction is set to begin almost immediately on this sister to Pinnacle at High Desert. According to Todd Clarke, TCR and the Seller AMREP Southwest, acted as a team in designing a community that would add value to the area, but 18 shortsighted home owners who lived 1/10 of a mile west of the community, resorted to political black mail and pulled every trick in the book to delay closing and development of the site. (Please call our office if you want the full details on how a local neighborhood group can delay development with no substance, and almost no funds.) Pinnacle Estates Located at 8300 Wyoming Blvd, just north of Paseo del Norte, this 310 unit community is also set to start construction this quarter. Riding on the success of Pinnacle at High Desert, Pinnacle Estates will appeal to the same tenant profile that made Pinnacle at High Desert such a success. TCRs development advantage shines through in more than this marketplace. During their Market Watch 1997 hosted in Portland, TCR showed attendees their new design guidelines and communities in the Pacific Northwest. Stunning and innovative architecture and amenities have allowed these communities to fly past their competition in the same sub-markets. What secret does TCR hold that others lack? TCRs long development history and unique corporate structure encourages its employees to benchmark, assess, review, redevelop and analyze their developing communities on a faster basis than the competition. Sensing the shift in housing demand from single family ownership to multi-family renting, TCR implemented an aggressive plan to offer single family amenities in upscale apartment communities. What does the future hold? As of this writing, TCR's Western United States Assets of 7,231 apartment units have just been acquired by BRE (a San Francisco based REIT). BREs purchase signals an ongoing trend of mergers and consilidations in the multifamily marketplace. BRE will allow TCR to develop more units, while BREs portfolio has grown to 18,329 units. Bob Hutt has been appointed the development director for BRE, while the managing partner, Bruce Ward will head up the acquisition department. Based on this news of the merger, BREs stock has increased from its early 1997 price of $24/share to todays range of $27/share to $30/share. BREs acquisition makes them the 6th largest apartment owner in the country with a total market capitalization value of $1.2 Billion.

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by Todd Clarke CCIM (www.nmcomreal.com/nmcomreal)
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