We’ve invested roughly $6 million in the Siena Apartments, a 292-unit apartment community in Plantation, Florida, just west of Fort Lauderdale. This is the latest example of our broader strategy to invest in existing, reasonably-priced apartments at a low cost basis, and performing renovations aimed at increasing property values.
Business plan
Our partner, American Landmark Apartments, intends to execute on a value-add business plan including both in-unit and community improvements — from upgrading appliances to renovating the pool area and leasing office.
Following the completion of renovations, they plan to actively manage the property for roughly ten years before seeking opportunities for an exit via sale or refinance. Our goal is to earn consistent income over the duration of our hold period.
Why we invested
- Strong relationship with experienced partner: American Landmark Apartments (ALA) currently owns and operates over 23,000 units with a diverse real estate portfolio valued in excess of $2 billion. Prior to this acquisition, we have invested in seven other value-add projects with ALA, including The Enclave at Lake Ellenor in Orlando, which experienced a 39% appreciation in appraised value in just 21 months.
- Income-generating asset: The apartment complex was 97% occupied at the time of our investment, generating consistent cash flow through rental income.
- Attractive margin of safety: Our investment, along with the senior loan, makes up roughly 76% of the value of the property. Since our position is senior to the sponsor, their equity provides a cushion against potential loss.
