Mid Month Update-June15, 2017

Another month, and another busy month at Altus, although I was able to take ten days off and away from thoughts of real estate. I came back energized and excited to continue to push through the projects we have in the works! Here are some highlights of the last month:

On the Horizon:

  • Closing for the 100 unit complex in Tulsa is scheduled for June 23rd, and our team is excited to get started! Minimal interior renovations, a new boiler chiller system, new windows throughout, and an updated clubhouse with give this stabilized complex the refresh it needs. This is a “structured program” purchase. 
  • Woodcrest Apartments in Indianapolis is fully funded (in only three days). This is a 120 unit repositioning project, though not requiring nearly the same level of upgrades compared to what we are accustomed. We are scheduled to close this purchase next week.
  • COMING SOON: The marketing package is now available for a three property syndication located in the growing OKC suburb of Norman, OK. This is the first syndication we have been able to offer in almost two years! The last one was the Rockwell Plaza apartments which has been very successful to date (see below). This project, though smaller in total size, is very similar in attributes. Please contact our office at (707) 932 – 5887 for a copy of the marketing package if interested. Investment opportunity can be reserved by accredited investors on a first come first serve basis.
  •  

Currently Repositioning:

Village on the Lake

(160 units, Oklahoma City)

  • The full exterior improvements were completed at the end of May (the property was purchased in March)
  • We were pushing to have forty units upgraded and ready to rent by the beginning of June but didn’t quite get there. Completed units are coming on line now. Leasing will begin as soon as the staging and photos are complete in the model units, which is scheduled for next week.  

AE Rockwell

(304 units, Oklahoma City)

  • We are down to our last 15 units to upgrade, all of which are in process and expected to be complete before the end of June
  • We are up to 80% occupied and 84% preleased at the new rental rates. Leasing was not as robust as we would have liked in May but we remain well ahead of the pro forma time line.
  • May was the first true month of lease expirations on the upgraded units and we scored an excellent 74% retention rate. With leases now starting to expire while we are still trying to lease up the remaining vacant units strong retention is key.
  • Forrest flew to Kansas City this month and met with the HUD team at their office. The meeting went very well and we have been invited to submit a formal loan package. The package will be submitted as soon as occupancy reaches 85%, hopefully by the end of this month.

AE Sunset

(98 units, Edmond OK)

  • 60% Occupied, preleased to 71%. May continued the strong leasing momentum of the last couple months.  Physical occupancy is up 18% month over month.
  • Only three of the original 98 units remain to be upgraded and are scheduled to be completed by the end of this month.
  • We are well ahead of the pro forma time lines on this project and should begin the refinance process in the next several weeks.

Normandy Place

(80 units, Little Rock AR)

  • 48% Occupied
  • All exterior construction is complete and we are close to 50% done with interior upgrades.
  • After some improvement early in the month leasing has been disappointing at this property. The onsite staff has been replaced but we are not yet seeing the improvements we expected. The rental market in the area remains robust.

Crosswinds and Crosswinds Cove

(194 units, Oklahoma City)

  • 85% Cove, 79% Crosswinds.
  • Crosswinds is preleased to 84%, up considerably from the beginning of May when we were leased at 72% occupancy with 18 additional units scheduled for move out.
  • Occupancy at the Cove property, which shares a leasing office with Crosswinds, has suffered a little bit due to the focus on Crosswinds leasing. Ownership owns both buildings and is on board with the strategy to get increased occupancy at the Crosswinds property.
  • Construction is nearly done on this project. We are waiting for some punch list items to be completed on the exterior, are upgrading a few additional interior units as they become available, and are waiting on the childrens’ play equipment to be installed.

Stabilized Properties:

Crosswinds and Crosswinds Cove

(194 units, Oklahoma City)

  • 85% Cove, 79% Crosswinds.
  • Crosswinds is preleased to 84%, up considerably from the beginning of May when we were leased at 72% occupancy with 18 additional units scheduled for move out.
  • Occupancy at the Cove property, which shares a leasing office with Crosswinds, has suffered a little bit due to the focus on Crosswinds leasing. Ownership owns both buildings and is on board with the strategy to get increased occupancy at the Crosswinds property.
  • Construction is nearly done on this project. We are waiting for some punch list items to be completed on the exterior, are upgrading a few additional interior units as they become available, and are waiting on the childrens’ play equipment to be installed.

AE Bodega

 (11 units, Petaluma)

  • 100% occupied.
  • The property is currently listed for sale at a 70% increase over our cost basis over only 18 months.

AE Commerce

(20,000 SF Commercial Space, Rohnert Park)

  • The property remains on the market for sale. We have struggled with getting our heads around what needs to be done with this property and continue to work on it.

AE Three -1500 Farmers Lane

(17,400 SF Commercial Space, Santa Rosa)

  • Construction continues to move along for completion in mid-July.
  • The refinance process has commenced and we are now soliciting for financing from banks. We will move forward with a bank as soon as the construction is complete.

405 5th Street, West, Sonoma, CA

 (7 townhomes, Sonoma)

  • 1 of the 7 units remains for sale. The property was restaged last week to give it a fresh look and traffic has picked back up, check out the new listing HERE.
    • See the property website HERE.

Other:

  • Lending activity remains elevated from previous years despite the amount of effort being put into our equity projects. We currently have four loans in process. Please call our office at 707-932-5887 if you have any interest or would like more information. 

 

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