Mid Month - June 2018

Another month has flown by, we are still diligently reviewing deals to find more opportunities to present but for now, here is a recap on the past month.

In the Pipeline:

  • AE Shazam – While we are still in contract, the appraisals came back far lower than the seller had expected. We remain hopeful we will be able to still come to an agreement as the seller is motivated to sell, but understandably shaken by the disconnect between expectation and reality.
  • Hollywood, FL - The purchase of this industrial warehouse property is in process and expected to close later this month or in early July. It will be funded primarily with 1031 proceeds with the balance coming from Kristy’s short-list of individuals who had proactively reached out expressing interest.  Despite this opportunity being full, we would be happy to send a marketing package to anyone who would like to take a look.  Please respond to this email for a copy. 
  • McKinney, TX – We have another opportunity coming up in McKinney, TX. McDonald Plaza is 95,300 SF commercial industrial space that is 100% occupied. We are excited to be in a growing submarket of the Dallas metro. Rents are slightly below market due to current owner being more concerned with high occupancy than rent rates. Altus will be investing a large amount of its own capital (via 1031) into this purchase. Be sure to reach out to Kristy so she can place you on the short-list if you would like more information about this purchase. Once we have the required documents in place to allow us to raise investment those that have reached out proactively will be given the first opportunity to review the documents and reserve space in the investment.
  • Using 1031s can be a great way to defer capital gains taxes and benefit from returns on a large capital base. In most cases Altus is able to fill investors’ 1031 needs while allowing the investor to take a passive role in the identification, purchase, financing, and asset management process.  Contact our office if you are considering a 1031. Whether or not you decide to partner with Altus for your 1031 reinvestment, we are happy to provide some guidance that can greatly increase your likelihood of reinvestment success.

Current Repositioning Projects:

Norman Portfolio

(340 units, Norman OK)

  • Charleston (160 units) – Currently occupied at 36%. This is an 11% drop from last month due to planned move outs of original residents.
    • Leasing has slowed from April, we took 13 applications in May versus the 20 in April. The onsite team is monitoring traffic and working hard to pick back up in June.
    • Construction continues to make progress with over 40 units 100% complete and 25 in final punch phase.
  • Other Complexes (180 units) –
    • We took 11 applications across these properties in May versus the 20 in April. Cherrystone is stabilized and will be listed for sale in the next week or so. Construction is close to complete on the remainder of the properties. 

Village on the Lake

(160 units, Oklahoma City)

  • Currently occupied at 48%, leased to 50%.
  • Construction has made great progress and is down to the last 10% of the units plus finalizing all the city inspections.
  • Leasing at this complex is our main priority, with the close of the refinance scheduled for the end of July we have a lot of work in front of us.

Normandy Place Apartments

(80 units, Little Rock, AR

  • Currently leased to 64%, a 4% increase from last month.
  • Leasing has improved, not to the rate we would like to see but we have had steady improvement on occupancy over the last two months.
  • Construction completed another ten units. We are down to the final ten units needing upgrades, all of which are currently occupied.

Magnolia Apartments

(40 units, Redding CA)

  • Interior renovations are in process on 3 units, with 6 additional units complete to date.  
  • We are currently leased to 90%. With the higher rent rates due to the unit improvements we have reached the revenue run rate needed for refinance and have begun exploring refinancing options.

Items of Note at our Stabilized Properties:

AE Sunset

(98 units, Edmond OK)

  • Occupied at 96%, leased at 98%.  

AE Rockwell

(304 units, Oklahoma City)

  • 94% occupied.

AE Commerce

(20,000 SF Commercial Space, Rohnert Park)

  • This property remains on the market for sale.

AE Carousel

(98,000 SF Light Industrial, Redding CA)

  • We successfully negotiated a lease extension with FedEx. This will increase rental income and provide us with several more years of tenant stability.   

Villaggio (Altus Multi Tenant Income Fund)

(33 Units, Sacramento CA)

  • This property was listed for a sale last week and has received great reception thus far. As individual townhome units any purchase/sale transaction is more complicated than standard so we are being selective with potential buyers. We hope to have an accepted offer on the property in the next few weeks.

Other:

  • We funded three asset based loans last month and have several more in the pipeline. The interest rates on the funded loans ranged from 8 – 9.5%. If you are interested in joining our growing list of lenders please contact us.

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