Back in November 2016, we invested in the Enclave at Lake Ellenor Apartments, a 296-unit stabilized apartment complex in Orlando, Florida. We purchased the property with the intention of completing renovations to boost rents, and subsequently the property value.

Last fall, our partner successfully completed renovations to modernize all of the apartments and improve the community amenities, including two resort-style pools, summer kitchens, a dog park, and a fitness center.

We’re pleased to report that due to all of the hard work, we’ve been able to command higher rents for the renovated units. As of June 30, 2018, trailing 12-month net operating income (“NOI”) had increased 24% compared to the trailing 12-month performance prior to acquisition.

With the improvements to the property and the increases in income, we were able to refinance earlier this month and pull roughly $5.5 million out of the deal to invest elsewhere.

According to the appraisal ordered by our lender as part of the refinancing, we have increased the value of the property by roughly 39% over the purchase price.

What this means for your portfolio

As an investor, you can expect to see the benefits of this success in two ways. First, we expect rental income from this property will continue to support quarterly dividend distributions. Second, the increase in property value should be partially captured in the growing Net Asset Value (NAV) of your shares in the near term. If the asset is sold in a future liquidation event, you would capture the remaining value via a) an additional NAV increase or b) a distribution.

Looking ahead

While the results of this value-add investment strategy have been strong, we believe the market dynamics continue to support the long-term potential of the property. Anchored by Disney, Orlando has seen exceptional growth in both population and jobs. A 2018 Forbes report named the Orlando-Kissimmee-Sanford area as the fourth fastest-growing city in the country, which lead the country in rent growth with a 6.3% rise in rents in the year ending May 2018. We believe these trends will continue as major new developments are slated to add job opportunities throughout the city.

We look forward to providing you with additional updates on the Lake Ellenor Apartments throughout the course of our investment.