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Case Studies

February 5, 2020

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Multifamily Case Study: 90 Units in Orlando, FL

This is a 90-unit garden-style community located in the MSA of Orlando...

90 Units

Highlights: This is a 90-unit garden-style community located in the MSA of Orlando, Florida. The location offers easy access to downtown Orlando as well as to Disney and Universal. It also provides easy access to the I-4 corridor which provides direct access to both the Tampa Bay area as well as the Daytona Beach area. Built in 1996 and partially renovated in 2018, the property consists of ten two-story apartment buildings sitting on 5 acres. The neighborhood has a relaxed atmosphere with grounds that are covered with large, mature trees creating shaded courtyards between the buildings. The property has a desirable unit mix consisting of 6 studios, 74 one-bedroom/one-bathroom, (10) two-bedroom/one-bathroom. The property has an on-site office and a coin-operated laundry facility both in need of renovation.

Repositioning: The property will be acquired $11,840,000. An additional $500,000 will be invested into property improvements. The (2) two-bedrooms/one-bathroom are vacant and will be fully renovated. In addition, all buildings need to be repainted, new landscaping and signage is also required. The pool needs cosmetic improvements. The property has an on-site office and a coin-operated laundry facility both in need of renovation. The property is under managed and the rent roll is substantially below the market average. The improvements to the grounds, laundry and pool combined with the renovations of the (10) two-bedroom units will allow our professional management to increase rents over year one to market level. This will increase NOI by $132,000 or more which will raise the value by over $2,000,000.

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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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