Mid Month July 2019

Happy Summer! While many Altus employees are just returning from vacation or heading out on their adventures, the business must go on!

Here is a snapshot of everything we’ve been up to in the last month. 

In the Pipeline:

  • In previous months we mentioned the apartment project we are working on in Chico. 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. The project is fully reserved and back up reservations are being taken. The close date has been set for the week of August 6th.
  • Due to changes to the QOZ guidelines since we went into contract, the Westpark multi-tenant industrial property in Tupelo, MS won’t work in the QOZ structure we originally had targeted. However, through some renegotiation with the seller we will be able to do this project as a non-QOZ investment that will provide excellent and stable cashflow from the date of purchase while still maintaining a possible benefit from future development on the bare land included in the purchase. We are finalizing the new contract with the seller now and anticipate closing the purchase by the end of August.
  • We have received verbal contract approval from the seller of eleven medical office condos in San Marcos, TX totaling 12,000 square feet. We have long loved the Austin MSA but rarely have been able to find properties with returns that fit our profile.   
  • We have reached the best and final round for a multifamily project in Chattanooga, TN one of our target markets that we have been focused on.  
  • The 26,100 SF retail shopping center in NW OKC is scheduled to close at the end of this month.  The project is fully funded, and debt is being obtained.
  • We have multiple off market opportunities we are investigating in AL and TX markets that we hope to have more updates on next month.  

Current Repositioning Projects:

Norman Portfolio

(340 Units, Norman OK)

  • Charleston (160 units)
    • Occupied at 87%, a 4% increase from last month and preleased to 95%. We anticipate hitting 95% occupancy mid-August with the current move in and move outs planned.
    • We are beginning to explore refinancing options for this property and will have more to report next month on progress.
  • Other Complexes (180 units)
    • Leasing movement at these properties has finally picked up. Joan has been working diligently with the property managers to increase traffic to the properties along with ensuring the properties look great.
    • Over 6 approved applications across the portfolio in the last week.

Normandy Place Apartments

(80 Units, Little Rock, AR)

  • Leased to 70%, a 3% decrease in the last month.  
  • This property continues to be difficult to get our hands around. The third-party asset manager is continually changing up marketing, trying different concessions and providing additional training for the onsite staff. We are continuing to work hand in hand with him to improve traffic and leasing.

Items of Note at our Stabilized Properties:

McDonald Plaza (McKinney Tx)

  • We have two prospective tenants for the vacant spaces at this industrial plaza. Lease rates are still in negotiations but look to be between 3-6% over proforma.

Other:

  • The Altus specific equity raise first round of funding closed July 1st. There are a few additional investment trickling as paperwork is completed in that will be included in a second round of funding. 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. Loan opportunities have been a bit slow over the past few months but leads have picked up over the past couple weeks.

If you have any interest in discussing 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