ADDRESS | PURCHASE DATE | SALE DATE | AVG. RENT AT PURCHASE |
|---|---|---|---|
1545 Spruce Terrace, Tampa | 11/2020 | 01/2023 | $1,184 |
AVG. RENT AT SALE | RENT INCREASE | NOI | IRR REALIZED |
|---|---|---|---|
$1,610 | 36% | 73% | 45% |
Past performance and statements regarding earnings are no guarantee of future results.
At a glance
1545 Spruce Terrace, Tampa | |
|---|---|
Purchase Date | 11/2020 |
Sale Date | 01/2023 |
Avg. rent at purchase | $1,184 |
Avg. rent at sale | $1,610 |
Rent increase | 36% |
NOI | 73% |
IRR realized | 45% |
Why we invested
West River Flats challenged us on even different levels than other projects. Intrigued by the relatively good state of the 135 apartments, we had to deal with a few situations uncommon to our usual work.
Opportunities and challenges
- Being conceived during the COVID crisis, it became troublesome to meet lenders in person and secure financing.
- The previous owner had maintained a relatively high state of renovation. Kitchens were mostly renewed, had black appliances, granite countertops, shaker cabinets, tile flooring, and shiplap siding.
- Regarding rent-increasing amenities, a swimming pool put West River Flats well above average.
- While the treatment of the premises was rather diligent, the administration lacked discipline and sustainability. We found a significant amount of back rents as well as unoccupied apartments.
- It became obvious that marketing and management would be crucial to success here, where usually building measures are needed in advance to release a project’s potential.
Results
Although circumstances were unusual, we managed to acquire West River Flats in November of 2020.
Aside from our regular activities to improve the premises as a whole, we set our focus on marketing the vacant apartments since their state was flawless.
After circa six months, every single apartment was rented out, already improving the cash flow greatly while several apartments were renovated in a higher standard.
Further Improvements like the remodeling of the exterior walls along with considerate management allowed us to increase rent for current tenants, further improving revenues.
Our effective and enduring improvements lifted revenue expectations greatly, thus enabling us to yield a greatly increased sales price. In a short 18 months, the asset exceeded the proforma estimates and the property was listed for sale well ahead of schedule.
