Mid Month May 2019

Straight to business this month, here is a snapshot of what we have been working on!

In the Pipeline:

  •  Chico, CA – We are partnering with a builder on the construction of 104 Class A apartment units in Chico, CA. The builder is purchasing an option to purchase the property once complete. Investment in this project will be structured similar to mezzanine debt with a predetermined annual rate of return but will enjoy the tax benefits of equity versus debt. If for some reason the builder doesn’t exercise their option, the deal becomes even better. I’ve overheard Forrest remark that this could be one of the best risk return profile opportunities we have uncovered in quite a while.
  •  The multi-tenant industrial property in Tupelo, MS mentioned over the last few mid-month updates remains under contract. Last month during the site due diligence visit we were pleased to discover that there are two more acres of land for development than originally thought. Working with local contacts we have determined the best use for this land is multi-tenant industrial flex space, so the currently plan is to build an additional 100,000-125,000 SF on the property. Just as a reminder, this property sits in a Qualified Opportunity Zone and this investment will be structured as a QOZ (Qualified Opportunity Fund).  Please contact the office at 707.932.5887 if you have questions about QOZ investment benefits.
  •  The 26,100 SF retail shopping center in NW OKC is still in contract and moving forward. A Phase II was required for the site, so a 45-day extension was exercised to keep the contract in place while due diligence continues. It appears this project is fully funded, and debt is being obtained.
  •  We have submitted several offers in multiple markets that could go under contract at any time.                                                                                                                                                                                                                                                         With consistent and disciplined review, we continue to scour markets for opportunities.

Current Repositioning Projects:

Norman Portfolio
(340 Units, Norman OK)

  • Charleston (160 units)
    • Leased to 91%, an 8% increase from last month. The property is now 80% occupied.
  • Other Complexes (180 units)
    • Leasing has improved at several of the complexes. We are pushing hard to get occupancy up at a few of the complexes that still have outsized vacancies.  

Village on the Lake
(160 Units, Oklahoma City OK)

  •  Currently leased to 89%, a 4% increase over the last two weeks. 

Normandy Place Apartments
(80 Units, Little Rock, AR)

  •  Leased to 71%, a 2% decrease from last month.
  •  The number of leasing inquires from our apartment marketing sites has increased dramatically as the messaging has been fine tuned. Now that the marketing strategy has been implemented, the sales process is the focus and next big push of the asset manager and onsite team.

Items of Note at our Stabilized Properties:

Arrow’s Edge Apartments
(118 Units, Sherwood AR)

  •  Occupied at 90%, a 2% decrease from last month. While this is a dip in occupancy it is also a step towards increasing collections as we removed the residents that were not paying rent timely.
  •  The first round of lease renewals will be going out this week. This is the first step in our management plan of decreasing the loss to lease, which will decrease the margin between market rent rates and the rates that the previous owner was charging.
  •  Construction is almost complete on two units that were considered untenantable at time of purchase. 

Sunridge Townhomes
(133 Units, Enid OK)

  • Occupied at 94%.
  •  The exterior improvement work is complete, residents are thrilled to see the new ownership coming in and making improvements.

AE McDonald
(95,310 SF, McKinney TX)

  •  Occupancy remains at 95%. The vacant space continues to generate interest and two applicants are being reviewed.
  • A two-year lease extension was just signed with a reliable tenant at a 9% increase over their previous rate.

Other:

  • The Altus specific equity raise continues! We have had meetings with most interested parties and the responses have been great. We will continue additional raising in the next couple of weeks as we move toward legal documentation review. If you are interested in receiving more information, please reach out to Forrest at fjinks@altusequity.com
  •  If you are interested in allocating a portion of your investment portfolio to 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.

 

Best,
Ali Negus