News from Arcadian Real Estate Group

The professionals at Arcadian Real Estate Group bring an unsurpassed level of focus and experience to both commercial and multifamily management. Our team has the skills, experience, and dedication required to meet performance challenges--even in difficult markets. Properties we operate have an edge on the competition from our owner-managed effort, which provides every client with the most attentive and engaged service possible. The application of our advantages in strategic planning, resource commitment, and market knowledge results in improved cash flow and value creation.

At Arcadian, we recognize that success is earned daily and is only possible through the committed efforts of our people.

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MEET THE TEAM

Multifamily Property Management

Gina Erwin leads Arcadian's multifamily operations toward its goals of asset preservation, rental rate growth, expense control, and resident satisfaction.

As a key member of Arcadian's executive team, Gina skillfully directs her management team with a focus on promoting superior performance at each community through Arcadian's approach of comprehensive management. Gina designs the operational guidelines for each community and directs the training and oversight of all personnel. She also devises revenue growth opportunities, and identifies new manpower efficiencies, which combine to elevate overall property performance compared to the general market.

Gina has over twenty years' experience in the multifamily industry, including over seven years overseeing Equity Residential's Houston portfolio. Gina consistently achieves superior results in an ever-changing rental market through her excellent communication skills and organizational abilities, with focused attention to every detail.

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Commercial Property Management

Sam Hansen directs commercial management for Arcadian Real Estate Group by providing effective, efficient, and engaged property management services. Sam's diverse background has enabled him to achieve average tenant retention rates of 93%. With twelve years' experience in Houston real estate, Sam has managed Class A and B office, retail, and industrial properties with tenant rosters including both Fortune 100 and smaller, local companies.

Sam's strength is focusing on tenant satisfaction while not losing sight of budgetary constraints and ownership objectives. He excels in problem-solving and has a knack for mediating tenant lease issues as they arise.

Sam's unique interpersonal skills enable him to develop successful relationships with both owners and tenants, which provide opportunities for better service in all aspects of commercial management.

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Project Management Services

Austin Ware manages the Project Services operations for Arcadian Real Estate Group. With more than 10 years' experience in the real estate business, Austin's proven track record of leadership and in-depth perspective provide the expertise to direct the organization's project development, construction, and moving management operations.

Austin is responsible for capital improvements, tenant improvements, and multifamily projects throughout Houston, Austin, and Dallas.

Austin's stellar reputation in the industry allows him to establish and maintain an excellent rapport with vendors. As a result, Arcadian's clients benefit directly through reliable and consistent quality of service, increased construction cost savings, and value enhancement to the asset.

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Arcadian Real Estate Group
1900 West Loop South, Suite 500
Houston TX 77027
Tel (281) 276-8800
Fax (281) 276-8830

Key Clans Back Real Estate Deal

BY JENNIFER DAWSON
HOUSTON BUSINESS JOURNAL
Houston’s prominent Cullen and Brown families are among the partners in a new company created to acquire and manage commercial real estate. The Cullens and Browns are the highest profile investors of the bunch, but they are only two of 16 partners in the newly established Arcadian Real Estate Group LLC. Another key partner is NAI Houston, a well-established real estate brokerage firm.

This is the newest investment vehicle for the old-money families, whose ancestors made their fortunes in energy and construction and left their marks on Houston through a multitude of business and philanthropic endeavors.

Arcadian plans to invest as much as $50 million in commercial assets this year, as well as offer a wide range of real estate services in connection with those acquired properties.

The Arcadian umbrella organization consists of three companies:
• NAI Houston;
• Arcadian Real Estate Services LLC, a commercial property management firm; and
• Arcadian Real Estate Capital LLC, which will acquire properties and provide asset management.

The three companies have a total work force of 83 — a number that is expected to climb over the next year as assets are acquired.

Arcadian’s 16 partners own an interest in all three companies.

DIVERSE INVESTMENTS
The unique blend of partners is an offshoot of Preferred Communities LP, which is no longer in operation since its functions have been rolled into the new group. Preferred Communities was formed in 2005 by Mark Kurtz to handle apartment investments for the Cullen and Brown families.

Preferred Communities helped the families acquire multifamily complexes and operate them. The families wanted to manage their investment risk by having their own property manager, says Kurtz, a local real estate veteran.

Since 2005, the families have purchased $250 million worth of multifamily properties in Houston through Preferred Communities, Kurtz says. Properties include the 596-unit Promenade Jersey Village, the 404-unit Promenade Champions Forest and the 263-unit Arcadian Kirby.

The Cullens and Browns have co-invested quite a bit, he adds.

By combining Preferred Communities with NAI under the Arcadian umbrella, the families will be able to funnel investment dollars into additional commercial product types. They will keep a close eye on the management of those assets through NAI, which has the capability to manage o+ ce, retail and industrial assets.

Each of Arcadian’s partners will participate in acquisitions on a deal-by-deal basis. Additional individual and institutional investors will be brought into some acquisitions.

Arcadian will acquire assets ranging in price from $2 million to $50 million, and obtain 50 percent to 70 percent debt on each deal depending on the product type.

The group anticipates spending $25 million to $50 million this year for as much as 1,000 apartment units and 100,000 square feet to 200,000 square feet of commercial properties.

Most of the value-add acquisitions will be in Houston, although some will be located in Dallas and Austin.

Arcadian Real Estate Group’s operating partners include Kurtz and NAI Co-Managing Partners Jon Silberman and Randy Wilhelm. Kurtz is primarily responsible for the real estate services and capital companies.

No properties changed ownership as part of the merger, but new capital was invested to fund the entity.

Arcadian banks on local foreclosure deals

BY JENNIFER DAWSON
HOUSTON BUSINESS JOURNAL

One function at Arcadian Real Estate Group LLC addresses the rise in foreclosures that has become part of the current financial climate.

Arcadian will act as a special servicer for regional banks that need to manage and sell commercial properties they have taken ownership of through foreclosure.

The company can act as an outsourced real estate owned, or REO, department for lenders too small to manage the slew of commercial properties expected to go into default.

Arcadian has secured a deal with an undisclosed regional bank to handle its REO assets. The bank has approximately 40 branches and less than $1 billion in assets. Arcadian is dealing with smaller foreclosures, on properties valued at $1.5 million or less.

Randy Wilhelm, co-managing partner at NAI Houston, says banks often need help with distressed properties in the areas of repairs, management, leasing and disposition.

“We can literally walk in and take over an REO department,” Wilhelm says. “It’s very much a full-service type of deal.”

Jon Silberman, co-managing partner at NAI Houston, says the demand for such a service will grow because a lot of office buildings need to go through the foreclosure process. While foreclosures are a negative, Silberman says they are necessary for the market to heal.

“It’s like a root canal,” he says. “The sooner they go through it, the better.”