One dartmouth place apartments
In June 2014, OCP acquired One Dartmouth Place Apartments at below replacement cost. With only 30% of the units having been renovated at the time of acquisition, the property was an attractive value-add opportunity which OCP took full advantage of by not only improving the property through our capital expenditure program and operational efficiencies, but also repositioning it to complement the property’s proximity to metro Denver’s major employment centers and light rail access. Under OCP’s management, the property has undergone $2.8 million in capital expenditures, including upgrades to the leasing office, landscaping and repairs to the AC condensers, roof, windows, sliding doors, parking lot, etc.
Non-renovated and partially-renovated units were brought up to the renovated unit standards at an average cost of $4K per unit. These improvements, in addition to OCP’s focus on resident retention and cost savings, resulted in rent premiums and higher income, which enabled OCP to successfully complete the placement of a $10.7 million supplemental loan in December 2015 which returned all of the $10 million of investor’s equity in the deal in only one and a half years of ownership. An exit at current valuations would result in an IRR to the investors of 51.1% with an equity multiple of 1.92x within two and a half years of ownership.
Sunset View Apartments
In March 2014, OCP acquired an attractive value-add opportunity in Sunset View Apartments at approximately half of the replacement cost. The asset is near the SeaTac Airport, major employment centers, and the I-5 & I-405 freeways, and from its vantage point, residents can enjoy unobstructed southward views of the valley and Mount Rainier. Its location, coupled with OCP’s $1.9 million capital expenditure program, quickly positioned the property into a market leader. Major exterior renovations included tennis court removal, asphalt repairs, laundry room renovation, lighting installation and landscaping.
Additionally, OCP implemented an interior renovation program to highlight one of the property’s key advantages –20% larger floor plans than the average competitive property in the area. As a result of OCP’s value-add program, each of the renovated units achieved monthly rent premiums between $70 – 120 per month. $7.1 million of equity was invested in Sunset View, and the property is currently under contract for sale at $33.6 million. The exit will result in an estimated IRR of 24.6% to the investors and an equity multiple of 1.69x in just two and a half years of ownership.
Creekview Place Apartments
In June 2013, OCP acquired Creekview Place Apartments in Sonoma County. A booming job market together with subsequent rent growth at over 5% made the property a perfect investment opportunity. At the time of acquisition, the property was 100% occupied and underleveraged with below market rents. With OCP’s $1.5 million capital expenditure program, which included roof replacement, pool pump replacement, new laundry machine installations, fire alarm repairs, landscaping and interior renovations, OCP achieved over $200 per month of rent premiums.
Additionally, OCP’s implemented quality control measures resulted in the conversion of more than 90 month-to-month leases into long-term leases. OCP successfully transformed this Class C+ asset into a B+ asset with a full reface, remodel and rebranding. The $10.9 million of invested equity has already been returned to the investors through a $27.9 million refinance in May 2015 and a $3 million supplemental loan placement in August 2016. Based on current valuations, the estimated IRR to the investors is 29.5% with an equity multiple of 1.80x in three and a half years of ownership.