Mid Month December 2018

The holidays are upon us and I hope that each of you has the opportunity to spend time with family and friends over the next few weeks reflecting on 2018 and looking ahead to 2019 and all of its exciting possibilities!

As mentioned in last month’s mid-month and the Altus Insight, Altus and the advisory board have pledged to match up to $25,000 in donations from our readers to benefit the Paradise fire victims.  There are still match funds remaining!

If you can help, please email Forrest at fjinks@altusequity.com with what we are calling a “commitment amount”.  We can then send you a list of non-profits we have found that are helping the fire victims.  You make a donation, we make a donation. And, if you prefer, you can send your checks made out to the non-profit to us and we will work with the non-profit to ensure the paperwork for your tax deduction is obtained correctly.

Here’s how we’re wrapping up 2018 at Altus:

In the Pipeline:

  •  We in contract on a 117-unit property in the Little Rock, AR MSA. Historically the property has held stable occupancy, but the economic occupancy, or collections, have been below market standards. We are hoping to close in the first couple weeks of January. The property pro forma shows strong anticipated returns. We will be bringing this opportunity to our investor database within the next couple weeks once we get some questions answered about the roofs on the property.  If you are interested in being included in the first look at the opportunity please contact our office.
  • We remain in contract on a 133-unit townhome project in a community north of Oklahoma City. We are working towards the closing of this acquisition in late January.  
  • Using 1031s can be a great way to defer capital gains taxes and benefit from returns on a large capital base. Not only can Altus fill an investors’ 1031 needs while allowing the investor to take a passive role in the identification, purchase, financing, and asset management processes, in most cases the investor can obtain similar to or better returns than if they would have done the 1031 reinvestment on their own.  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) – Leased to 62%.
    • The first two weeks of December have been great for leasing! We have taken 19 leases or which 11 have been approved. Seasonally adjusted, this is the best stretch of leasing we have seen at property since the project began.
  • Other Complexes (180 units) –
    • Cherry Stone and Stratford remain on the market for sale.  

Village on the Lake

(160 Units, Oklahoma City OK)

  • Currently occupied at 77% and leased to 77%, this is a 4% decrease from last month in preleased units.
  • Leasing has slowed at the property and while there have been 7 units leased in the last month there were also 7 move outs resulting in no improvements to occupancy.
  •  

Normandy Place Apartments

(80 Units, Little Rock, AR)

  • Currently leased to 71%, a 1% increase from last month.

Magnolia Apartments

(40 Units, Redding CA)

  • Still working through the refinance of this property, we are hoping for a closing before the end of the month.

Art House

(36 Hospitality Suites, Santa Rosa, CA)

  • We had to make some changes to the ownership structure due to changes to the Treasury guidelines surrounding Qualified Opportunities Zones. Our developer partner had to reduce his investment in the project by $150,000 and we had to increase our investment by the same amount to make sure he doesn’t own over 20% of the project. The additional investment was quickly snatched up by the existing investors in the project. Qualified Opportunities Zones are wonderful opportunity to defer and reduce existing capital gains and possibly even benefit from tax free future capital gains. Contact us for more information.

Items of Note at our Stabilized Properties:

Shasta View Apartments

(51 Units, Redding CA)

  • We have an off-market offer on Shasta View Apartments in excess of $5 Mil. That is a 53% increase on our cost basis in 4 years. Due to a refinance a year after purchase we have less than $100k of original investment still in the property.

AE Hollywood

(33,580 SF Commercial Space, Hollywood FL)

  • The tenant base continues to improve.

McDonald Plaza

(95,300 SF Commercial Space, McKinney TX)

  • We have two lease extensions out to the largest tenants.

CH Apartments

(124 Units, Oklahoma City OK)

  • We closed on the sale of this property yesterday at an ~25% increase on our cost basis in three and a half years. Combined with the (minimum) 8% yield the investors earned during the ownership period, total annual investor returns are in excess of 20% for this investment.  
  • The funds from this sale are slated to be used as the purchase equity for the 133 units mentioned above through the use of a 1031 exchange.

Other:

  • We closed another three loans this past month as loan volume continues to grow. If you are interested in allocating a portion of your investment portfolio to investment in secured deeds of trust please give us a call and we will add you to the list on investors who receive the first look at new opportunities.

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