Case Study 1: Alexandria Apartments
Ownership
HJS Realty, LLC
Alexandria Apartments is a 55-unit apartment community in downtown Kansas City, Missouri. The property is 100% subsidized by Section 8, and included several apartments in a 1 and 2 bedroom floor plan.
Problem
Property had severe deferred maintenance that was causing issues with the state regulatory agencies as well as the U.S. Department of Housing and Urban Development. It was in need of rehabilitation and renovation financing as well as re-tenanting.
Solution
Cohen-Esrey Communities, LLC, (CEC) was in control of the property prior to acquisition. HJS Realty, LLC, a partner of Cohen-Esrey, was awarded Tax Credits and Tax Exempt Bonds through the Missouri Housing Development Commission (MHDC). CEC was charged with relocation of the resident base, construction management, leasing efforts and general oversight of the project.
Results
Within 10 months, the construction project was completed. CEC delivered the buildings ahead of schedule, netting the ownership an additional $50,000 in developer fee that was not forecast in the original estimates. The property has maintained 100% occupancy and continues to run ahead of proforma projections.
Case Study 2: Jefferson Place Apartments
Ownership
CASA II Partners, L.P. – An affiliate of Henderson Global Investors, (NA) Inc.
Jefferson Place Apartments is a 352-Unit apartment community located in Olathe, Kansas off of the busy intersection of 119th Street and I-35. The property consists of 16, 3-story buildings with slab on grade construction and stucco exterior. In addition, this community has a clubhouse with swimming pool, hot tub, exercise facility, stocked pond and numerous fountains and superior landscaping.
Problem
Property was showing underperformance as a result of an un-desirable resident profile and deteriorating exterior structure.
Solution
Cohen-Esrey Communities, LLC, (CEC) assumed control of the property after purchase by the ownership. Immediately, management began a $1,000,000 upgrade plan for the exterior of the property. This plan included painting and repair of the stucco exterior, laundry room upgrades, clubhouse upgrades, parking lot resurfacing and landscape enhancement. CEC directed the contractors and provided project bidding and oversight during this process. An aggressive marketing campaign was put in place to include For Rent, Apartment Guide, Rent.com, Apartments.com, massive flyer distribution, major employer contact and discounts, as well as monthly open houses.
Results
Within 18 months, the property was stabilized and has maintained 92% or higher. With the combined efforts of increased rental rates, dropping concessions and strong expense management, NOI results are up 25% from 2004 and continue to rise.
Case Study 3: Grant Park Commons
Ownership
Zurich Structured Finance
Grant Park Commons Apartments is a 344-unit apartment community in the heart of Atlanta, Georgia. The property sits off of Moreland Avenue with fast access to I-285 and is just minutes away from Hartsfield-Jackson International Airport. The property was renovated using Section 42 Tax Credit Equity Funding in 1998 and consists of all 2 bedroom units. Amenities include a pool, clubhouse, 24 hour maintenance, playground, volleyball court mixed with lush landscaping.
Problem
The initial renovation of the project was done below standard, creating several construction issues that needed to be corrected. In 2002, the ownership began to vacate the property to begin a second rehabilitation and discovered that their renovation of the property had not taken into account a unit air circulation device. The project required lease up and continued monitoring once construction was completed. In addition, the location of this property is poor and lease up of a large complex would prove challenging.
Solution
Cohen-Esrey Communities, LLC, (CEC) assumed this property management assignment in 2004. CEC’s roving maintenance crew designed and installed the unit circulation device system, which took them approximately 60 days. A full and aggressive marketing campaign was put into position to lease up the property, which included online advertising, significant outreach marketing and proper staffing. In addition, a non-profit partner called “Kid’s Tune Up,” was drafted to assist with community activities designed around helping children. This program proved to be instrumental in the lease up as it provides after school activities, full schedules in the summer and meals during these time frames from local school grants.
Results
The property stabilized at 85% occupancy, and is back in a positive cash flow position for the first time since 2002.