Vero Green

  • Year Built: 2001
  • Total Units: 172
  • Class: B Acquisition
  • Cost: $5.7 million
  • Renovation: $250,000

Opportunity:

With their extensive knowledge of and contacts in the Florida multifamily market, the principals of Lloyd Jones Capital (“LJC”) located an opportunistic purchase opportunity in early 2010. This particular apartment community would require repositioning from an affordable (under IRC Section 42, Low Income Housing Tax Credit “LIHTC”) to a market rate rent driven apartment community. The acquisition due diligence identified a good quality asset in a steady tertiary Florida market.

Execution:

Based on 20+ years of active involvement in LIHTC development and management, Finlay Management (FMI, property management agent and sister company of LJC) brought a key component to the table in allowing property ownership to navigate the three year transition from a LIHTC rent restricted property to a market rate property. Moderate value-add renovations to both the interior and exterior of the property positioned the deal to compete well in the market with market driven rents.

Results:

The property was fully converted to market rate within the guidelines of the three-year transition. The net operating income grew 323% during this period. Fifteen months after the initial purchase, ownership refinanced the property and received 144% of its initial equity. The projected five-year hold shows a compounded annual return of 24% and a 2.90X equity multiple upon exit.