CARELTON COURTYARD
215 Market St | Galveston, TX 77550
The Opportunity
Carelton Courtyard is a walkable multifamily asset at the front door of UTMB Galveston, the island’s largest and most entrenched employment anchor. It includes a partially restricted component (33% of units subject to a LURA through 2034 with significant headroom to max rent caps), providing both income stability and upside with optionality to increase affordability restrictions in exchange for a property tax abatement. This offering is well-suited for value-add, affordable housing, and income-focused investors. New ownership will benefit from immediate access to UTMB’s 10K+ jobs and 3K+ students, strong projected submarket rent growth, demonstrated renovation potential, and a lack of new supply.
Investment Summary
Investment Highlights
Clear Value-Add with Rent Gaps
- Large capex items, including the replacement of roofs, siding, and leasing office, were completed in 2008. New ownership can focus on modernizing unit interiors to compete more effectively with new construction.
- $153 rent gap versus renovated product of similar vintage, providing a tangible mark-to-market target post-renovation and lease-up.
- More than $1,000 rent gap to nearby Class A asset within one-half mile, providing meaningful post-renovation rent growth runway while
preserving a clear affordability discount to new construction. - Can add washer/dryer connections and machines, implement valet trash, and implement a bulk Wi-Fi agreement to increase ancillary income.
Affordable Income and Rent Growth Upside
- In-place LURA on 84 units (33% of total units) through 2034, with current rents below allowable caps, creating embedded upside as AMIs increase.
- Can increase affordability restrictions in exchange for a property tax abatement yielding a $2M increase in net cash flow over ten years.
- Remaining 67% of units are market-rate, enhancing revenue growth potential.
- No new supply under construction and 93% average occupancy in the submarket.
Strict zoning ordinances provide barriers-to-entry in Galveston. - 2% to 4% projected rent growth in Galveston submarket annually by third parties.
Strategic Location by UTMB and Lifestyle Appeal
- Walking distance to UTMB Galveston, Texas’ oldest medical school and the island’s dominant employer, with five schools, four hospitals, and a major research footprint.
- On Galveston Trolley Seawall route with trolley stop in front of leasing office, offering convenient travel along Seawall Boulevard.
- Within one mile of the Galveston Ferry, a free 24-hour, 2.7 mile marine transportation service between the Bolivar Peninsula and Galveston Island.
- Strong, diversified demand drivers including UTMB, the Port of Galveston, Royal Caribbean and MSC cruise terminals, and expanding resort and hospitality projects.
- Less than one mile from new $700M Margaritaville Resort site (500+ new jobs) and seven miles from new $1B Davie Defense expansion site (2K+ new jobs)
- Attractive live–work–play environment with convenient access to beaches, parks, water
recreation, and the historic Strand District, supporting retention and long-term renter appeal. - Excellent regional connectivity with direct links to Clear Lake’s aerospace and tech corridor and to the broader Houston metro, enhancing the depth and diversity of the employment base.
The Location
THE PROPERTY
Contact Us
Investment Sales
CHRIS YOUNG
Managing Director
972.743-5742
[email protected]
TX CRE #630674
CHRIS CURRY
Senior Managing Director
713.553-0151
[email protected]
TX CRE #566750
JEFFREY SKIPWORTH
Managing Director
214.533-3322
[email protected]
TX CRE #560404
JOEY RIPPEL
Managing Director
601.919-5155
[email protected]
TX CRE #654288
KYLE WHITNEY
Senior Director
713.724-1456
[email protected]
TX CRE #658451
TUCKER FAMA
Associate Director
281.923-3856
tucker.fama@berkadia.com
TX CRE #9002106
ESTEE IBÁÑEZ
AVP, Financial Analysis
713.469-4512
[email protected]
TX CRE #687201
AFFORDABLE HOUSING
MIKE CANORI
Senior Managing Director
949.622.9215
[email protected]
Mortgage Banking
TIM LEONHARD
Senior Managing Director
214.360.3849
[email protected]
CARELTON COURTYARD
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