SOL@Christown
PURCHASE PRICE $530,000, SALE PRICE $1.69 MILLION
Building Description
Unit Mix: 1 BR, 1 BA (23) and 2 BR, 1 BA (1)
Number of Units: 24
Building Size: 14,297 SqFt
Lot Size: 0.97
Acre Year Built: 1964
Strategy
- Evict delinquent tenants
- Complete rebranding and renovation of property:
- New brand name and signage (from Kings Apartments to Sol@Christown)
- Complete exterior overhaul, including new accent colors, pool, deck, BBQ area, and desert landscaping (reducing utility costs)
- Contemporary, hip interior design
- Electric car gates and repaved parking lot
- Market to young professionals
the opportunity
- Single story garden-style apartment community
- Located in a desirable Central Phoenix submarket, near large mall, university and major transportation options
- Growing submarket (demonstrated by consistent increase in occupancy levels above those of the metropolitan Phoenix area)
- Higher average rents in submarket compared to target property ($1.00/SF vs. $0.72/SF)
- Significant Value-Add/Reposition potential through extensive renovation
- Opportunity to purchase at a fraction of replacement cost
Results
Within 8 months, 17 units were renovated with the remaining 7 being renovated within 3 days of becoming available using operating cash flow (thus decreasing out of pocket costs).
In under 2 years, we increased property value by 136%.
Delivering UNLEVERED IRR of 45% to our investors.
Deal Metrics
At Purchase
Purchased Apr 2013
Purchase Price $530,000 (All cash)
Price per Door - $22,083
Price per SqFt - $37.03
Avg. Rent at Purchase - $433/Mo.
Occupancy Rate - 54%
Capital Expenses - $172,000
Total Investment - $702,000
At Sale
Sold in Aug 2016
Sale Price - $1,695,000
Price per Door - $70,625
Price per SqFt - $118.55
Rent Increased to $725/Mo. (highest)
Occupancy Increased to 96%
Appreciation Rate - 141%
Unlevered IRR - 44.96%
Trailing 12 prior to sale, Cash-on-Cash - 17.43%