The Claridge Apartments- The Art of Hidden Value and Million Dollar Water
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.