Multi-Million-Dollar Renovation Results in Record Price Per Unit
Well-located suburban multifamily assets with value-add potential remain highly sought-after and are difficult to find, says an MD for Origin Investments. Origin in partnership with Aegon Real Assets US parlayed a multi-million-dollar renovation program into a record per-unit sale price for Fletcher Southlands, a 320-unit multifamily asset in Aurora, CO.
With a sale price that exceeded $320,000 per unit, the sale established a new per-unit sale price record for 2002-vintage product in the Aurora marketplace. Based on the sale price, the investment in Fletcher Southlands produced an approximate 30.2 percent gross IRR and a 2.25x gross multiple to Origin’s Fund III investors.
The property at 22959 E. Smoky Hill Rd. was acquired by CBRE Investment Advisors. At the time of the sale, Fletcher Southlands was 98 percent leased.
“The acquisition of Fletcher Southlands represented a tremendous value-add opportunity; an opportunity we were able to realize in a significantly shorter hold period,” said Marc Turner, managing director of investment management, Origin Investments. “We determined it would be in the best interest of our partner and Fund III investors to accelerate our exit strategy while being able to position the asset with further opportunity to create value by finishing the program we had started.”
Turner noted that the partnership’s original strategy was to complete the common area renovation and amenity package along with unit updates at eight per month. Given the ongoing steady performance of the asset, a lower rate of unit turnover and a potential early exit strategy, only 59 percent of the units ultimately were improved.
Jordan Robbins and Pamela Koster, both with JLL’s capital markets division, represented the Origin-Aegon partnership in the disposition.
Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM.
In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.