Ashton Park Apartments
Politics & Profits, Focus on the End Game
Acquisition, property management, value-add, rehabilitation, reposition, disposition
- Ashton Park Apartments
- 240 Units – Class B Apartments
- Texas City, Texas
- Built in 1975
- Advised purchase in 2008 to private investment group at $26,875 per unit
- Repositioned asset and resident profile over 18 month time period
- Provided regular cash distributions to investors
- Relieved as manager in 2014 to appease activist investors after significant tax increases required suspension of distributions. Continued to advise managing partner
- Rehired 12 months later after acting management allowed occupancy dip to 65% and payables to increase $200K+
- Arranged funding for recovery efforts
- Guided $781K of interior and exterior renovations in 2016
- Increased effective rents 65% over 10 years – ultimately, 18% higher than the submarket
Positioned for sale. Sold 2016 for $42,000 per unit.
Cap rate: 7.00%
The Claridge Apartments- The Art of Hidden Value and Million Dollar Water
Property management, process analysis and improvement, bridge loan financing, rehabilitation, value-add, business development, reposition and disposition
- Claridge Apartments
- Houston, Texas
- 173 Units – Built in 1983
- In 2007 the City of Houston was contemplating condemnation and the property was foreclosed.
- 230 code violations
- 30% of the property out of service due to flood damage
- Rents were deeply discounted, and new residents were required to do their own make-ready.
- Terri Clifton was engaged to clear up liens, citations and other liabilities to position the property for sale. This was accomplished over 24 month period with minimal additional investment.
- Terri Clifton identified and pitched the deal to a private investment group.
- Given the history of the property, investors had reservations. Identifying the hidden asset value, Terri confidently offered funding and assumed a percentage of ownership interest.
- Acquisition was completed in September of 2009 for $3,924,851 ($22,687 per unit).
- An additional $2.3 million was invested to rehabilitate the entire property.
- Reuven Bisk arranged bridge loan financing.
- The property was brought back to life over the next three years.
- Completed extensive processes review
- Identified extensive water usage
- Implemented RUBS (Ratio Utility Billing System)
- Detected and repaired leaks. Installed water conservation devices reducing water costs by 30%.
- Water use was still extensive
- Persisted with investigations
- Properly maintained systems and with persistent management, convinced the City that metering was faulty. After meter change in January of 2014, water billing went down by another 43% to an average of $6,199 per month.
- Improved water management (savings + RUBS) added $163,356/year in NOI.
- Increased occupancy to 97%
- Increased rents by 14%
- Initiated regular monthly distributions
As a Result…
The Claridge was sold in April of 2015 for $9,149,970 ($52,890 per unit) Cap rate: 9.64% for a 47% gain.
These hands-on, management-directed changes added $1,694,564 to the value of the property, or $9,795 per door
The property continues to provide healthy returns for current owners and is now upgraded to a B+ asset.
Eagle Heights Apartments- From the Ground Up, An Original Concept
New development, construction management, financing, & new construction lease-up.
- Eagle Heights Apartments
- New Development Class A
- Pleasanton, Texas
- 98 units opened in 2016
- Greenfield Development
- Privately financed
- Custom architecture
- Interior hallways
- Two bedroom units able to be subdivided
- Electronic lock system
- Texas shaped swimming pool
- Private Wi-Fi in each unit
- Tiered Services Apartment Concept
- 3-Level Service Option Available – standard apartments to fully furnished with concierge-level service
- Cable and internet service provided with gigabit speed included
- Oversize parking with vehicle wash station
- Grand Opening gala included a live bald eagle
Vista Gardens Apartments
Rehab, Rebrand & Reposition
- 116 Units in Pasadena, Texas
- YOC 1978
- Acquired December 2017
- Beginning Average Rents $0.84/SF, or $659/Unit
- Name changed – All new signage
- Fully Remodeled Office/Clubhouse Building
- Relocated pool equipment
- Rewired to add electrical grounding
- Added fitness center and children’s play area
- New roofs
- Full wood & paint
- Revamped pool area
- Extensive ironwork repairs
- Upgraded landscaping
- Plumbing & lighting upgrades to achieve Green Program compliance
- Converted from manual to computerized management system
- Ongoing unit upgrades
- Total CapEx $900K
Results, Nine Months After Acquisition:
Average rents increased 18% to $0.99/SF or $761/Unit
Average rents continue to rise as renewals cycle and unit upgrades continue