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Zangwood Villa Apartments is a 51-unit, two story apartment community with 43,850 leasable square feet located in the Oak Cliff submarket of Dallas. Oak Cliff is located just 5 minutes southwest of downtown Dallas and the subject is immediately off of I-35E, one of Dallas’ main thoroughfares. The subject's location offers quick and convenient access to employment in the Dallas Metro area which is comprised of more than 6.3 million people and over 100,000 business establishments. The subject sits near the intersection of W. Illinois Ave. & S Zang Blvd. with a total average traffic count of 48,920 cars per day between the two streets. Zangwood Villa is less than one quarter mile away from Wynnewood Shopping Center, a 426,942SF shopping center whose key tenants include Kroger and Ross as well as many other retailers and restaurants.
Zangwood Villa was constructed in of brick veneer and wood siding with a slightly pitched roof (replaced in 2007) on a pier and beam foundation. The apartment community features 23 one bedroom and 28 two bedroom units with an average unit size of 860 square feet. All units are serviced with individual HVAC units and hot water is supplied via individual water heaters. The property is individually metered for electricity. Exterior amenities include a laundry room, separate workshop, standalone leasing office and a spacious courtyard. Zangwood was taken into receivership on November 1st, 2011 and was approximately 70% occupied at the time. The receivership has caused little disruption to the operations of the property.
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Oak Cliff is a popular revitalization area which is receiving renewed interest because of its historic atmosphere, current redevelopment projects, and close proximity to downtown Dallas. These projects include the addition of new schools, the estimated $1.7 billion Trinity River Corridor Project and a great deal of restaurant and retail development. Recent teardowns in Oak Cliff have resulted in upward pressure in rents & occupancy.
ALN defines the submarket for Zangwood Villa as, “Southwest Dallas, west of I-35 and south of I-30”. The submarket contains 82 multifamily properties that are individually metered for electricity with a total of 18,570 units. The average physical occupancy is currently 88.7% at an average rental rate of $640/unit. The area experienced positive absorption of 1,038 units over the past 12 months. Occupancy increased from 86.9% to 88.7% over the same time. For the purposes of our valuation we only considered rent comparables constructed prior to 1970, individually metered for electric, located within a 1.5 mile radius of the subject property. Upon applying these adjustments the attached rent survey shows an average physical occupancy of 99% and an average rent of $553/unit and $0.62/SF.
Zangwood Villa Apartments is an excellent opportunity for an investor looking for a well located asset with good structural and mechanical fundamentals like individual meters, HVAC units and individual electric water heaters. Upon stabilization of the asset to market occupancy and rents, a buyer should be able to realize a substantial return on their investment.
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