CASE STUDY: VIEUX COULEE APARTMENTS
- Purchased property in 2012
- Very well-located asset was aesthetically inferior to the surrounding competition
- Property upgrade program had been started by previous owner but not completed
Investment Strategy and Process
- Install additional outdoor social spaces and amenities: outdoor poolside cabana, dog park, fire pit, new fitness equipment, resort-style pool furniture, community bicycles
- Hire best-in-market property manager (previous owner self-managed)
- Increase marketing (property website, SEO, outreach marketing)
- Improve property visibility (new monument sign, attractive landscaping)
- Add incremental resident services (valet trash removal) and events (on-site event planners)
- Sold in 2014 to a private equity group after a 25-month hold
- Sold approximately 12 to 18 months earlier than pro forma because the pace of rent increases and below-market legacy lease rollover was occurring at a faster pace than originally projected
Vieux Coulee is another example of AHC’s focused strategy, rigorous asset management and disciplined hold/sell analysis.
AHC made relatively small investments to improve the property’s image and attractiveness to target younger renters who wanted to live in the neighborhood without paying Class A rents. We also implemented a very popular bike rental program to showcase the property’s proximity and direct access to the Trinity River walking/biking trail system. As a result, AHC increased gross revenue by over 30% and net operating income by over 40% during the two-year hold period.