Multi-Family Apartment Complex

This asset (multi-family) is a well-located asset in the North Central area of a top 20 MSA. It is directly adjacent to the well-traveled boulevard and between two major highways. The Property was built in 1963 and is comprised primarily of 1BR/1BA units. We forecasted investor demand for apartments to continue to rise prior to acquiring the community as the MSA had maintained its position as a leader in job creation. Elevated demand in this segment drove cap rates to the low-5 percent range. Stiff competition also shifted attention to large, well-located Class B assets during the period, which traded at the time in the low-6 percent range.

Private in-state investors, meanwhile, were targeting smaller Class B-C deals like this asset, though a sizable amount of this buyer demand remained unfulfilled. Fat acquisition, the Property was only 10% occupied and required significant improvement. We invested over $7,250/unit to replace the Property’s roofs, repair the parking areas, renovate unit interiors, and resolve over fifty code violations. After successfully improving and re-positioning the asset, we realized an outsized return via sale.