RENOVATION ROCKSTAR
MULTIFAMILY EDITION
Exterior after Photos courtesy of Brandroids Media
The Park at LeBlanc A GREAT DEAL COMES THROUGH IN THE DETAILS.
by Carole VanSickle Ellis | Featured investors: Mike Becker & Carl Dean, SPI Advisory LLC (Dallas office)
M
aking over a 168-unit apartment complex is no simple task, even when you have more than a dozen deals under your belt. When Michael Becker, Principal at SPI Advisory LLC in Dallas, Texas, first encountered The Villas at LeBlanc Park (part of the renovation included a new name), he took a close look at the details before taking on the project. “Fortunately, the deal was off-market from a broker who already knew us as a solid buyer,” said Carl Dean, an as- set manager for SPI who was involved in both the physical renovation of the property and the operations “upgrade.” He added, “We were able to identify a number of issues that would allow us to add value to the property by making some changes, including management issues, deferred maintenance in the common areas, and outdated units leased under market rates. We saw the property had close proximity to a high-end shopping center with lots of employment and a number of close comparable properties that had recently been renovated and brought up to market and believed we could compete with this property.” Once the property was purchased, he said, “We just had to execute.” Part of execution on this type of project involves something difficult: waiting. Dean reported the investors decided to up- grade about 40 percent of the units in the building in order to judge how effective the upgrades were and maintain leasing momentum during the renovation.
COST BREAKDOWN:
In-place rent at purchase: $0.92/square foot
In-place rent (estimated) at end of Y3 based on current performance: $1.14/square foot
Approximate rent increase: 24%
Approximate Net Operating Income (NOI) increase: 40%
Timeline for first subset of units: September 2017-April 2018 (common area items) April 2018-June 2018 (unit upgrades) Note: The investors used the winter months when most units were occupied to renovate the common areas, then shifted to units as they became available.
Renovation Budget: $756,000
Funding: Fannie Mae/Hunt
12 | think realty magazine :: september 2018
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