Case Studies
Austin Value-Add Portfolio + Re-Zone
1,308 Units / 3,700 beds (5 Assets) Multifamily | Austin TX
2014 - 2016
Acquisition Date
3 - 6 Years
Hold Period
$131.6M
Total Capitalization
42.3%
Net IRR
$43.8M
Equity
3.3x
Net Equity Multiple
Description
The Austin Value-add portfolio “The Ballpark Portfolio”is an assemblage of 5 contiguous student housing communities (Ballpark North, Ballpark South, Ballpark East, Ballpark West, Town Lake) located in the explosive growth corridor of East Riverside in Austin Texas. Together, the portfolio consists of 1,308 units or 3,700 student housing beds. Each property is equipped with a full suite of student housing amenities including gated access, resort-style swimming pools, outdoor sporting facilities, grill/picnic areas, fitness center, and study lounges.
Location
Ballpark North: 4600 Elmont Dr, Austin, TX 78741
Ballpark West: 1600 Wickersham Ln, Austin, TX 78741
Ballpark East: 1515 Wickersham Ln, Austin, TX 78741
Ballpark South: 4700 E Riverside Dr. Austin, TX 78741
Towne Lake: 1109 S Pleasant Valley Rd, Austin, TX 78741
Opportunity & Execution
Execution: Value Add + Re-zone
Deal Source: Off-market
- Part of a long-term investment strategy to acquire contiguous property in an area well positioned to capitalize on Austin’s explosive growth and path of gentrification
- Acquired off-market through proprietary relationships at a price below market levels
- Designed and executed capital improvement plan focused on unit interiors and exterior/infrastructure rehabilitation
- The team on the ground shadow property-managed the portfolio – very hands-on investment style with in-house construction management
- Realized value-creation (Improved operational cash flow by 80%) provided for the ability to re-finance out a significant portion of the invested equity in less than 3 years
- Part of a 100-acre assemblage adjacent to downtown Austin that the team re-zoned from 1M SF to 9M SF
Re-zone & Value Creation
- The asset acquisitions were part of a strategic 100-acre land assemblage
- Area adjacent to downtown Austin and Oracle HQ; minutes away from Austin-Bergstrom International Airport
- Re-zoned from 1M SF of existing residential to 9M SF of mixed-use developable space
- It was recorded as the largest re-zone in the urban core of Austin at the time
- Envisioned & marketed opportunity for a large-scale mixed-use redevelopment opportunity
- Realized value-creation + re-zone allowed the team flexibility to exit to a broader pool of buyers (value-add + developers) – project was ultimately sold as a cash-flowing covered land play, and today is a $4B re-development
Urban Palms
659 Unit Multifamily | Houston TX
Jul 2016
Acquisition Date
3 Years
Hold Period
$41.1M
Total Capitalization
25.0%
Net IRR
$11.6M
Equity
1.9x
Net Equity Multiple
Description
Urban Palms is a 659-unit multifamily asset located in the Sharpstown submarket of Houston, Texas near the intersection of Gessner Road and Westpark Tollway (inside the Beltway). The asset consists of 52 two-story garden style residential buildings and includes a diversified set of community amenities including gated access, 2 swimming pools, a playground, grill/picnic area, fitness center, and business center.
Location
8701 Town Park Dr, Houston, TX 77036
Opportunity & Execution
Execution: Value Add
Deal Source: Off-market
- The depth of experience and relationships inside and in the surrounding submarkets lead to an off-market acquisition at a significant discount to an otherwise fully marketed value.
- The asset presented a unique value-add opportunity with 75% of the units unimproved, infrastructure deficiencies, and poor in-place management.
- Capitalized on untapped upside by implementing CAPEX plan including replacing floors, countertops, appliances, light/fan fixtures, and upgrading cabinets
- Leveraged the asset’s location near major employment centers and in the expected path of improvement to consistently drive rent growth
- Replace existing management with an experienced operator to better manage leasing operations and improve property’s online and offline perception through effective management
Three Corners Portfolio
3 Asset - 1,103 Unit Multifamily | Houston TX
Apr 2015
Acquisition Date
3.3 Years
Hold Period
$82.4M
Total Capitalization
26.6%
Net IRR
$16.0M
Equity
2.0x
Net Equity Multiple
Description
The “Three Corners Portfolio” is comprised of 3 adjacent multifamily assets (Three Corners North, West, East) totaling 1,103 units located in the Spring Branch neighborhood in Northwest Houston inside the beltway, north of I-10 and just 3.5 miles north of the City Center, a residential/retail/hospitality mixed-use project. The portfolio assets offer a balanced blend of urban and suburban surroundings. Each asset provides a convenient set of community amenities including gated access, 2 swimming pools, a playground, grill/picnic area, dog park, fitness center, and business center.
Location
9999, 10010, 10105 Kempwood Drive, Houston, TX 77080
Opportunity & Execution
Execution: Value Add
Deal Source: Relationship based (fully marketed)
- Opportunistically acquired 3 adjacent assets from an institutional seller at a price well below replacement cost during a temporary market decline after short-term drop in oil prices
- Designed and executed capital improvement plan focused on unit interiors and exterior/infrastructure rehabilitation producing outsized ROI on invested CAPEX
- Implemented an aggressive shadow property management initiative resulting in entirely re-staffing the property and overhauling the leasing & maintenance protocols
- Sold the portfolio into a recovered market 3.3 years, achieving above market average annual cash on cash yield over the life of the hold.