Two Norman apartments fetch almost $25M

Journal Record, The (Oklahoma City), Mar 21, 2008 by Kelley Chambers

Two multifamily sales in Norman together accounted for nearly $25 million - and that was for 1980s properties.

Mike Buhl, with Commercial Realty Resources Co., handled the sales. Both properties sold to the same entity.

Post Oak, with 304 units, at 705 Ridgecrest Ct., sold for $13.85 million. Less than two miles away, Hampton Woods, at 3001 Oak Tree, sold for $10.6 million. The seller was also the same in both deals.

The breakdown for the properties was about $46,000 per unit for Post Oak, and about $43,000 per unit for Hampton Woods.

"Hampton Woods and Post Oak represent almost $10,000-per-unit higher prices than the average for this category, 1980s vintage, over the past two years," Buhl said. "At over $44,000-per-unit average, I think this shows the separation we are seeing in the multifamily market."

Buhl said the disconnect in the market appears to be between asking prices and the fundamentals to support those values.

He said the two sales represent an active market in Norman.

Judy Hatfield, with Norman-based Equity Realty, said a strong economy in the state, and in Norman, has led to the need for more multifamily housing, and competitive selling prices for multifamily properties.

"The University of Oklahoma is growing and buildings are being constructing like at no time in the history of the university," she said. "As we bring more people in there's a need for people to live and for convenient services."

Hatfield said entities looking to purchase multifamily properties in Norman recognize the costs to construct new properties would be higher than buying an existing property. Coupled with the challenges of finding and purchasing land, existing properties become very appealing.

"We've got a lot of demand and very little supply," she said.

Hatfield said Norman's growth over the last four decades, from about 25,000 to more than 100,000 now, is also an indicator that Norman is a desirable address, and prime for commercial investment.

"People love to live in university towns and many people have moved here or come back," she said.

Buhl said there is still value to be created in the multifamily market that will come through several channels including improvement of properties and expense control.