Mid Month Update-June 15, 2016

The summer months are quickly filling up at Altus with planned vacations, property visits and continuing education. The multifamily market is extremely tight right now with most properties trading at prices we don’t feel provide a high enough return. We are continuously reviewing new opportunities while staying firm on our requirements and approach.

In the meantime our current projects are as follows…

 

Funds:

Altus Hybrid Growth Fund

  • We have two properties left in this portfolio until liquidation is complete. Both properties are expected to close by the end of the month.
  • Many of the Hybrid investors chose to roll their investment forward into the purchase of the Sunset Ridge Apartments, thereby deferring taxes on their capital gains.

 

Altus Multi Tenant Income Fund

  • Villaggio (33 units, Sacramento) – We are currently 100% occupied with four units moving out in June due to the rent increases from April taking affect. While turnover is not usually desirable we will be able to re-rent these units at $1000/door verses the $850 the units were previously bringing in. The units have been very well maintained and these turns will happen with minimal down time.
  • Shasta View (51 units, Redding) - currently 94% occupied.
    • With the school year ending the few remaining student tenants have moved out. Our onsite manager is thoroughly vetting new applicants daily in order to fill the vacancies and create a tenant base that should provide less turnover.
    • A parking lot expansion is in the works for July. We will be utilizing a gravel area next to the complex. Parking has been the most requested improvement by prospective and current tenants.
  • Cedar Hills (124 units, Oklahoma City) - We had a fantastic month at Cedar. After a few slow weeks our onsite manager was able to push leasing hard and lease 3 units in the last week of May. Traffic has continued to pick up and we are currently 93% occupied.  

 

AE Rockwell

(304 units, Oklahoma City)

  • We dealt with some new management challenges over the last month specific to the type of repositioning we are doing for this project but thankfully were able to work through them in conjunction with the property and construction managers. Overall the remodeled units are receiving rave reviews and have begun to lease at a rapid pace (6 in the last week alone). We are 80% finished with the exterior improvements and should have 90 of the interior remodels complete by the end of June. A property manager in the area called our new units the nicest in class, which is a great pat on the back for the project team.  
  • Fencing repair and replacement is complete around the property.
  • The new entry gate with electronic pass system is slated to be complete by the end of the month.

 

AE Sunset

(98 units, Edmond OK)

  • Exterior work began the day after take over. The entry concrete has been torn out and the new pergola and stamped concrete entry have begun.
  • Ten interior units have gone through demolition and flooring is being installed.
  • Our leasing plan for this complex is different than what we have previously done. We will complete the front two buildings’ exteriors before we begin to lease at all. This will give us enough time to complete at least 30 of the interior units - giving the management team a great supply for lease ups.

                                

AE Commerce

  • The property remains on the market but with a recent increase in parties interested in purchasing the front building. While it doesn’t mean anything until it is in writing we are hopeful we will have an offer in hand within the next week.

 

Opportunity Knocks:

Sonoma County:

  • 405 5th Street, West, Sonoma, CA – We are starting to gain momentum on this project. Concrete work has begun, interior design work is in full swing and our estimated completion date is the end of October 2016.
  • 998 Bodega Ave., Petaluma, CA (11 units) – We are 100% occupied at this property. We were able to rent these out 10% above proforma, which at the market CAP rate of 5.5 is an additional $450,000 in value.
  • 1500 Farmers Lane, Santa Rosa – We continue to negotiate with our strong tenant prospect. Exterior renovations for the exterior are scheduled for design review the first week in July.

 

Sacramento Area:

  • Rosewood Gardens (33 units in Sacramento) – We are currently 100% occupied at this property. Window replacement should be complete by the end of July, once that is finalized we will put this on the market to sell.

 

On the Horizon:

  • We are in contract on a 42-unit complex in Modesto, CA. With minimal interior and exterior upgrades, we will be able to increase rents 15-20%. This will be a short term hold.
  • We are currently reviewing opportunities across several markets with some of the most promising being in Oklahoma City, Little Rock, Tulsa, and Kansas City.

 

If you do not currently receive our Opportunity Knocks emails with specific investment opportunities or if you have any interest in discussing any of the above opportunities in greater detail, please reply to this email or call our office at (707) 932-5887.  We will gladly add you to our distribution list and/or schedule an appointment to discuss your investing needs further.

Best,

 

Ali Negus