Mid Month Update-July 15, 2016

As summer continues we at Altus promote balancing work and research with vacations! While some of us in the office take a few days for rest and relaxation some also blend work into their time off. Forrest just returned from a two-week cross country road trip with his wife and kids. While he and the family spent time with friends and relatives he also explored new markets for multi-family opportunities. We are very excited for the possibility of entering new markets to provide more diverse deals for our investors.

Here is what we have accomplished in the last month.

Funds:

Altus Hybrid Growth Fund

  • The last property in this portfolio closed this week. Once the closing paperwork is reviewed distributions for this fund will be sent out. While we don’t yet have the final calculations it is expected the investor returns will end up being a little higher than we anticipated even as recently as March.
  • 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) – Currently 97% occupied. 4 units moved out at the end of June due to rent increases. 3 of the 4 units leased up so quickly that we pushed rents on the 4th to $1050/month up from $1000/month. We are pleased with the management company staying on top of rent increases and leasing up the units efficiently.
  • Shasta View (51 units, Redding) - currently 94% occupied. The onsite manager has 4 units preleased for August which will take our occupancy back up to 98% within the next 30 days.
  • Cedar Hills (124 units, Oklahoma City) – 98% occupied. Our onsite manager has continued to push occupancy and has signed multiple new leases due to her dedication. Currently our focus at this property is lease renewals and tenant retention.

 AE Rockwell

(304 units, Oklahoma City)

  • Overall the last month at Rockwell has gone exceptionally well. The changes to the construction oversight method and property management expectations were successfully implemented.
  •  The onsite management team beat their goal of 30 new leases in a month by 7, for a total of 37 approved applications in a single month.
  • The construction team picked up their speed tremendously and completed 38 remodeled units.
  • The exterior scope of work is 95% complete, with the exception of 4 buildings needing trim paint and just over 100 front doors still needed to be replaced.
  • A ribbon cutting ceremony will take place mid-August to show the community how far this complex has come. We will be sure to include photos in next month’s update.

AE Sunset

(98 units, Edmond OK)

  • The office remodel has begun. This will create a larger updated space for the onsite management team to lease the renovated units to prospective tenants.
  • 20 interior units will be complete by August 1st.
  • Our goal is to begin leasing new units right after the 1st of August.                              

AE Commerce

  • The property remains on the market. We have some continued interest from possible buyers but have yet to secure an offer thus far.

Opportunity Knocks:

Sonoma County:

  • 405 5th Street, West, Sonoma, CA – Construction is in motion onsite. A framing team of 12 people is pushing progress. Final documents from the State have been received allowing us to start pre-selling the units as soon as the documentation is signed by the necessary parties and recorded.
  • 998 Bodega Ave.(11 units, Petaluma) – We are 100% occupied at this property.
  • 1500 Farmers Lane, Santa Rosa – We have received two letters of intent from parties interested in leasing the entire building and are currently negotiating the terms in the LOIs. The proposed upgrades to the exterior of the building were successfully approved by Design Review with no changes, something that is almost unheard of and a feather in the cap of our architect.

Sacramento Area:

  • Rosewood Gardens (33 units, Sacramento) – 100% occupied. Window replacement, the final component in our repositioning plan, has begun. Once the replacement is complete next week we will list this property for resale.  

On the Horizon:

  • We are scheduled to close a 42 unit property in Modesto next week.  We are planning to improve the property by installing new windows, repaving the parking area, and improving the unit interiors. We are also hopeful we can work with the City of Modesto to take over control of an alley that goes through the property so we can gate the parking area.
  • We have an 80 unit complex in Little Rock, Arkansas in contract. Our team is working on the due diligence of this property in preparation to close by the end of September. We are excited about moving into the Arkansas market for many reasons; job growth has accelerated over the last year (outpacing the national average), multi-family building permits have increased after a lull from 2011-2013 and vacancies rates are also dropping as the area is seeing a steady vacancy rate of 7% down from 8.1% at the beginning of this year. We have been trying to get into the Arkansas market for quite some time.
  • Deal flow has increased over the last month and we have LOI’s out on properties in Carmichael, Ca, Kansas City MO, Wichita KS and a portfolio of properties in the Dallas metro area.

Best,

Ali Negus