Wimberly at Deerwood

The Opportunity: Wimberly at Deerwood was acquired in February 2013 for approximately $35.6 million. The original investment strategy was to acquire the asset significantly below replacement cost, upgrade the unit interiors over a 3-year period and renovate the clubhouse and pool area, increase rental rates by $30–$80 per month for the rehab, then sell the asset on a stabilized basis after a 5-year hold period.

Result: Renovation was completed in November 2014 at a cost of approximately $3.4 million. The property was 96.5% occupied at sale, achieving average rents of $1,110 per month ($1.21/sf) compared to underwriting of $1,070 per month ($1.17/sf). The property was sold in September 2015 for $43.5 million in net proceeds, resulting in an average annual return on investment of 18%, excluding fees, after just two-and-a-half years.

Investment Summary

Asset Type:    Multifamily Community
Asset Size:    322 units with average unit size of 914 square feet
Year of Construction: 2000
Acquired: 95% ownership in February 2013
Sold: September 2015

Property Highlights

• Class B multifamily property with stable cash flow
• Hold period of 2.5 years
• Acquired asset at $110,000 per unit
• Invested $11,000 per unit for exterior and interior improvements, elevating asset to Class A- / B+
• Raised rates from an average of $0.99/sf at acquisition to an average of $1.21/sf at disposition
• Sold asset for $135,000 per unit