Prescott Acquires $110 Million Gulf Coast Multi-Family Portfolio

(Multi- Housing News)

February 13, 2006 - Prescott Capital Management, the investment and asset management unit of The Prescott Group, LLC, announced today the acquisition of a nine property, Class A multi-family rental portfolio located across the Gulf Coast region in Texas and Louisiana for $110 million, or $71,000 per unit.

Prescott is a New York-based real estate merchant banking firm that undertakes property investment, asset management, and investment banking activities throughout the U.S., as well as internationally. Prescott is acquiring the assets in partnership with an operating partner active in the multifamily sector, Chicago and El Paso-based TVO Realty Partners. The sellers of the portfolio are affiliates of Houston-based Gross Investments.

The portfolio consists of 1,550 units and includes four parcels of land adjacent to four of the properties totaling 27.7 total acres, which are capable of accommodating an additional 412 multi-family units. The occupancy level of the portfolio is approximately 97 percent.

"This portfolio offers an excellent platform to capitalize on opportunities for growth inherent in this part of the country including the strength of the oil and gas industry and expansion of the area's refining capacity; the importance of Gulf Coast area ports to national commerce; and the economic benefits of NAFTA to the region," said Theodore R. Gamble, Jr., managing director at Prescott. "This portfolio, which offers diversification, stable cash flow and upside potential, should provide for steady cash-on-cash returns with the opportunity to participate in the Texas and Louisiana market multi-family rebound and favorable post-Katrina effects."

Russell Vandenburg, president and CEO of EPT Management Co., TVO's management affiliate, said, "Post-Katrina, this area has seen an influx of evacuees, a reshuffling of business operations to these sub-markets, and a decline in available hotel rooms. These factors, and others, have resulted in an immediate increase in demand for multi-family properties, which is expected to continue as job growth is fueled in the area by post-Katrina rebuilding efforts."