The Claridge Apartments | Better World Companies

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

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

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.