July 15, 2018

You know summer is in full effect when the calendar fills up with vacations for the Altus team. While everyone is getting a much needed refresh, there is still a steady flow of deals coming in the door and we are excited to find the next opportunity to present to our investors. See below for what we have been up to! 

In the Pipeline:

  • We currently have a loan opportunity available where we are facilitating the purchase and resale of a note, creating an impressive return of over 12%.  The note is a 2nd on an estate property in Cloverdale and will be closing at the end of the month.  Please contact Kristy at kbrooks@altusequity.com for details.  
  • Hollywood, FL – This industrial warehouse property is scheduled to close on July 23rd. A difficult lender has created some challenges with getting this one across the finish line, but we are happy that it will be part of our portfolio.  This was deal was funded primarily through 1031 proceeds. 
  • McKinney, TX –McDonald Plaza is a 95,300 SF commercial industrial space that is 100% occupied. This opportunity is scheduled to close before the end of this month. Funded primarily with Altus’ 1031 funds additional investors who reached out to express their interest after last month’s update rounded out our fundraising efforts.  If the timing didn’t work for you for this investment but you would like to see the marketing package, please reach out to the office at 707.932.5887 and we would be happy to send you a copy.
  • 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.
  • Have you heard of QOZs? Most investors haven’t, but investment in QOZs provides a huge opportunity. Altus has one in the pipeline and will have a marketing package available in early August. Make sure you take a read through the July 31st Altus Insight for an overview of QOZs and how you can benefit.

Current Repositioning Projects:

Norman Portfolio

(340 Units, Norman OK)

  • Charleston (160 units) – Currently leased to 45%, a 9% increase from last month.
    • We took 18 new applications in June for Charleston alone. While not overly impressive for a property on its own, the portfolio took 37 applications in total, 10 more than in May.
    • Construction has completed 56 units in total with 46 in process that will be complete by the end of July.
  • Other Complexes (180 units) –
    • Cherry Stone and Stratford have officially been put on the market for sale.
    • Across the remaining 7 properties we are in various phases of construction and leasing.

Village on the Lake

(160 Units, Oklahoma City OK)

  • Currently occupied at 57% and preleased to 67.5%. A 9% improvement in occupancy and 17% increase in preleased units from last month. The onsite team has been working extremely hard to ensure the improved performance of this property and we are very happy with the results.
  • The refinance to move from the bridge loan to permanent financing is scheduled to close the end of July or early August. We were able to secure a fixed rate below 4.5% for 15 years (thirty-year amortization). This is an excellent loan.
  • By the end of June construction will have only 3 units remaining to renovate, due to lease expirations these are the last of the original residents.

Normandy Place Apartments

(80 Units, Little Rock, AR)

  • Currently leased to 66%.  
  • A new onsite manager started mid-June andwith only a few weeks under her belt she has already leased more units than the previous onsite manager did over four months, a good reminder of how important having the right people is in this business.  

Magnolia Apartments

(40 Units, Redding CA)

  • Interior renovations continue with 2 units in process and another 3 planned for the end of the month.
  • 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 91%, leased to 98%. This is a 5% decrease from last month but is ultimately due to timing. We had move outs at the end of June and those units that are already leased have not moved in yet.   

AE Rockwell

(304 Units, Oklahoma City OK)

  • 92% occupied, 94% preleased.
  • We are approaching the 6 month mark from closing the HUD refinance. We anticipate a full release of the $1.4 Million in funds held back by the lender since we have met all requirements for the release to occur.

AE Commerce

(20,000 SF Commercial Space, Rohnert Park CA)

  • We have received an offer on one of the buildings. While not an offer that we would have originally been excited about it, we are glad to have some interest in the property.

Villaggio (Altus Multi Tenant Income Fund)

(33 Units, Sacramento CA)

  • We are in contract for the sale of this property and the buyers are finalizing inspections this week with full contingency removal scheduled for next week. This offer is almost a 60% increase in price over where we purchased the property four years ago. 

Woodcrest

(120 Units, Indianapolis IN)

  • Leasing has accelerated, and we are hopeful we can be stabilized by late August or September. Rents being achieved are beating pro forma.

Other:

  • We funded three asset backed 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 the office.

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