Origin Investments, in partnership with F&B Capital, recently completed the disposition of the Ellie Apartments, a 344-unit multifamily property in Austin, in spite of encountering hurdles associated with COVID-19 and the 2021 Texas winter storm. The buyer was a private institutional investor. The purchase price was undisclosed.

Origin and F&B overcame two obstacles during the disposition process. The off-market transaction originally was set to close to a different buyer in March 2020 at the start of the pandemic. The sale contract was terminated. In addition, the 2021 disposition process was impacted and challenged by the Texas winter storm, but eventually closed.

The partnership previously acquired the garden-style multifamily property as a value-add investment in March 2016. Formerly known as Mission Hills Apartments, the complex was built in 2001 and includes a mix of one- and two-bedroom units.

During the ownership’s five-year hold, the firm executed a multi-million dollar renovation and repositioning program that resulted in upgrades to nearly 85 percent of the units. The program also transformed the clubhouse, added new equipment to the fitness center and enhanced the pool area/curb appeal.

“It’s a challenge for value-add multifamily real estate owners to make an appropriate level of improvements that translate into higher occupancies and rents while not eliminating a property’s appeal to a future pool of buyers,” says Marc Turner, managing director, investment management, Origin Investments. “We were able to do this successfully with Ellie Apartments.”

The improvements allowed the partnership to maintain an occupancy level of 92 percent or higher, increase rents and improve net operating income. With the value created through the hold, Origin generated an approximate 13.6 percent gross internal rate of return and a 1.90x gross multiple to Origin Fund II investors.