The Westwood Village Apartment Portfolio

Andrews, Texas

In June of 2005 S/B XIII pur­chased the Westwood Village Apart­ments in Andrews, Texas. Andrews is located about an hour’s drive north of Midland/Odessa, near the south­east corner of New Mexico. While Andrews is not the end of the world, you can see it from there.

Westwood Village originally consisted of 88 units on four parcels, plus a vacant lot, all in close proximity to each other and under common management. We were fortunate in being able to retain the previous management team, who were on the verge of quitting because of the previous owner’s abuse. In retaining them, we became their California saviors, and now enjoy a very good, trusting and profitable relationship. We are also becoming known as good guys in the small and gossipy town of Andrews. Those managers have since, however, been replaced by a loyal and hardworking onsite mangager, Cheryl Bloom and, most recently, by Vicki and Paul Moranville, a manager/maintenance combination with is working quite well for us all.

Andrews sits in oil field country in west Texas’s Permian Basin. For some time, the oil industry there was in the midst of resurgence. Employment increased, which is improved occu­pancy. Andrews further benefited from the opening of a small University of Texas campus (which has 400 students plus staff).

Westwood has for many years been an excellent investment. Initially occupancy was approximately 90%. With the economy improving and the influx of students and staff into town, Westwood reached 100% occupied, with a waiting list. The upgrade in occupancy ushered in a similar improvement regarding investor distributions. At purchase we began distributions at the pre­ferred 7% level. We since increased the investor return to 17.8%. at one point, Westwood had over $100,000 in reserves—approxi­mate­ly three times more than needed. We used reserves to purchase an additional twelve units in two other locations in Andrews.

Andrews was our most lucrative investment in terms of cash flow for many years. At this point, however, the loss of local employment due to the sudden plummet in oil prices has resulted in a spike in vacancy, to as many at seventeen unoccupied units.  We are slowly beginning to re-fill units; we are currently 87% occupied.  We are currently producing cashflow and hope to restore distributions in a quarter or two.  We feel that Andrews will be a challenging environment for years to come but with our new management we are hopeful about the investment.