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Case Studies

January 29, 2020

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Multifamily Case Study: 75 Units in Orlando, FL

This property is situated in a prime residential location within the...

75 Units

Overview: This property is situated in a prime residential location within the desirable northern section of the Orlando MSA.  It offers easy access to downtown Orlando as well as to Disney and Universal.  It also provides easy access to the Route 4 corridor which provides direct access to both the Tampa Bay area as well as the Daytona Beach area.  Four major shopping and entertainment zones are within a five mile radius of the project and several major employment centers, including Amazon’s newest fulfillment center are located within a 10 minute drive making this a highly desirable location.

The property was originally completed in 1999 and consists of 75 two story townhomes situated on a 13 building, 6-acre site.  All units feature a two-bedroom, two bath layouts.  Each unit features a screened lanai as well as a small balcony outside of each bedroom.

The current owner did major improvements to the units in 2016 including new cabinetry, tile flooring, fixtures, mechanical upgrades and new appliances.

Repositioning:  The property will be acquired for $6,250,000. Our research indicates that the community is lacking in certain amenities common to other comparable properties in the area.  This factor combined with substandard management has resulted in a current vacancy rate of 11%. To cure this deficiency, we will invest another $500,000 into light improvements that are designed to dramatically improve demand while also moving the units into a higher rental level. These improvements will include the addition of a resort style pool and deck area that will include a grilling pavilion and expansive sundeck.  Landscaping and hardscaping will be upgraded as well.  These much needed improvements combined with the installation of our professional management team will allow us to restore this community to a superior level of performance within the first year of operation.

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November 29, 2017

5 min read

An Overview of Core, Core Plus, Value-Add and Opportunistic Investments

If you spend any time around commercial real estate...

If you spend any time around commercial real estate, you’re bound to hear the terms core, core plus, value-add and opportunistic real estate thrown around. These terms are used to define the level of risk and return potential of an investment property. Not only are the physical attributes of the property used to define an investment but the amount of debt financing to support the project is also imperative.

To explain why the debt financing has such an important role, I find it easy to understand if you look at a single-family property. If a property has a long-term lease in place, it can sound attractive to a conservative investor who wants to play it safe. However, if the same property has been primarily financed through debt with very little equity, it can paint a very different picture. Should the property value decrease, the owner could end up owing more on the property than it’s worth.

As a commercial real estate investor, you should know about each of these terms. Let us take you through them one by one to help you understand them better.

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