Category: German projects

We were able to finance both the property itself and the necessary investments in the subsequent years entirely through external capital, making it nearly impossible to calculate a return on equity.

Within three years, we successfully raised previously neglected rents by almost one hundred percent, thus ensuring sustainable refinancing.

To convey a strong message to the tenants, we promptly dispatched a craftsman to the property on the very day the purchase agreement was signed. The purpose of this immediate action was to have the aging fence freshly painted prior to our first on-site visit.

This proactive measure aimed to demonstrate our commitment to the tenants and their well-being. Our efforts were met with positive responses.

In friendly cooperation with the tenants, we were able to steadily improve both the standard of the property and the rental rates over the years.

Eventually, after nearly 15 years, we possessed an asset that had appreciated in value by more than fourfold.

Continuing our activities as Whitestone Capital in the USA led to the sale of the property at the end of 2018.

This project, too, inspired us to implement our strategy and methods in different market conditions. We were confident that we would achieve even greater success within the legal, jurisdictional, and political framework of the United States.

Today, we know that our confidence was well-founded.

Nonetheless, we shall never forget our humble roots in Hohefeldstraße, which gave us the confidence for our great leap forward.

Leveraging the low initial rents, we were able to negotiate favorable terms with tenants and implement the renovation of the exterior spaces and individual apartments in a phased manner.

This allowed us to continuously reinvest the ongoing rental income and essentially grow the property organically without the need for further equity or external financing. This approach enabled us to cultivate the necessary patience and composure to observe the developments in Buch and Wandlitz.

Thus, we continuously enhanced the property, culminating in the complete renovation of the facade, serving as the building’s calling card.

With this comprehensive refurbishment, we were able to sell the property, albeit after 12 years of patience, at a profit of over 350%.

While this initial project was situated in a price range below one million euros, it served as a catalyst for our firm, not least in terms of percentage return.

We gained the confidence to identify sound investment opportunities and learned valuable lessons in assessing the viability of a property’s location.The decision to focus on future projects in more attractive locations also stems from the lessons learned in this seemingly unassuming suburb.

The Schönerlinde project exemplifies our ability to identify undervalued assets, implement a patient and strategic investment approach, and capitalize on long-term value creation.

This success instilled confidence in our ability to find sound investments and underscored the importance of careful location assessment.

While the location was undeniably desirable, the existing structure required a comprehensive rehabilitation to fully unlock its value. However, the presence of established tenants presented a crucial challenge. Recognizing the inevitable disruption that significant improvements would cause, we prioritized open communication and actively addressed tenant concerns, fostering a collaborative environment from the outset.

Our vision for the property was ambitious. The once-weathered facade would be meticulously restored to its former glory, regaining its architectural dignity. The building’s internal infrastructure, the unseen lifeblood of functionality, would undergo a complete overhaul of its utility lines, ensuring optimal performance for years to come.

Functionality and aesthetics would be equally emphasized in the renovation of the stairwell, transforming it from a utilitarian passage to a visually pleasing element within the building. 

However, the most transformative aspect of the project would occur within each individual apartment. Outdated and potentially dysfunctional bathrooms would be replaced with modern havens, substantially elevating the overall living experience for residents.

One final obstacle remained – a bustling Asian takeaway restaurant occupying the ground floor. While the vibrant atmosphere and enticing aromas held a certain charm, they didn’t align with the envisioned upscale aesthetic. We negotiated a relocation of the restaurant, minimizing disruption to the building’s operations and paving the way for a more suitable tenant. A real estate brokerage firm was ultimately selected, acting as a silent partner that would seamlessly integrate with the residential community.

The rehabilitation process itself presented its own set of challenges. The integration of an elevator into the existing structure of the older building proved to be a complex undertaking, requiring innovative solutions and unwavering determination. Nevertheless, we successfully achieved our goal, ensuring accessibility for all residents.

Upon completion, the results spoke for themselves. The once-tired property was revitalized, transformed into a vibrant addition to the neighborhood. Initial tenant apprehension was replaced with genuine satisfaction regarding their upgraded apartments and the overall improved living environment. The commercial unit, now occupied by the real estate brokerage firm, fostered a newfound synergy with the residential atmosphere.

The true test, however, lay in the market’s response. We strategically offered the rehabilitated units, encompassing a mix of apartment sizes and configurations, to both investors and owner-occupiers.

The response was overwhelmingly positive, with units selling at exceptional prices that exceeded our initial projections. While the rehabilitation had been a considerable undertaking, both in terms of cost and labor, the favorable purchase price we secured and the booming demand for renovated properties within the Berlin market ultimately tilted the scales in our favor.

The project yielded a remarkable return on investment, solidifying the efficacy of strategically implemented rehabilitation coupled with a commitment to tenant well-being.

While some investment projects present formidable challenges, the Wildenbruchstraße/Kiefholzstraße property proved to be a relatively smooth operation.

Building trust and rapport with the tenants was crucial to their satisfaction and cooperation. We achieved this through consistent, open communication and a commitment to delivering on our promises. In contrast to the previous management’s shortcomings, our approach was met with relief and appreciation from many tenants.

To further enhance the property’s value and attract potential buyers, we installed additional balconies, effectively increasing both rental income and overall return on investment.

This subsequent installation on the existing structure presented significant legal challenges and demanded considerable negotiation skills and assertiveness. Despite these obstacles, that endeavour was ultimately successful as well.

In 2012, we recognized the growing importance of digital marketing and created an in-house website to showcase the property. This website was then promoted through various popular real estate portals.

Our marketing strategy also emphasized transparency, providing potential investors with detailed information about the property and the investment opportunity.

While we engaged external partners to assist with the sales process, we ensured that they were well-equipped with comprehensive digital and analog marketing materials. This combination of transparency and effective marketing enabled us to sell the apartments and attic shell spaces within a short timeframe.

The Wildenbruchstraße/Kiefholzstraße property investment demonstrates the importance of fostering positive tenant relationships, embracing digital marketing strategies, and leveraging external partnerships.

By prioritizing transparency and open communication, we were able to secure tenant satisfaction, enhance property value, and achieve a successful sale of the property, ultimately delivering a substantial return on investment.

A Tale of Speed and Targeted Marketing

This project’s success hinged on a strategic combination of swift execution and targeted marketing. While our rental consulting team navigated legal and financial aspects, handled tenant terminations, and resolved conflicts, we simultaneously coordinated with various trades to renovate the building and vacant apartments as quickly as possible.

We ventured into uncharted marketing territory, directing traffic from major real estate portals to a custom-designed website featuring detailed property descriptions, floor plans, and continuously updated photographs.

This strategy revealed a significant demand from West Germans and Europeans seeking homes for job relocations or their adult children. These out-of-towners, drawn by the prime location and first-occupancy status, were willing to make pricing concessions.

As a result of our synchronized efforts, the time between completion, listing, and buyer reservation was reduced to a remarkable 10-14 days.

The installation of additional balconies on the historic garden house undoubtedly represented the most challenging phase of the entire project. The approval process alone proved to be extremely complex and time-consuming. For the actual installation of the balconies, it was essential to have Danziger Strasse temporarily closed.

This was necessary as the components had to be lifted over the front building using a crane. Since Danziger Strasse is a federal highway, approval for the measure lay not with the local authority but with the responsible state authority.

Despite an additional investment of approximately half a million euros, within 18 months, we not only established a vibrant, international community of residents from countries like France, Sweden or Italy, but also achieved a near doubling of the investment. Moreover, we left behind a transformed piece of Berlin.