URS’ first apartment deal was in Cincinnati, and this market will always hold a special place in my heart.

We have worked long and hard to develop relationships in this market. Our first multifamily acquisition in Cincinnati was an off-market 40-unit building for $260,000 in 2009. In 2015, in the same city (but different submarket, Fairfield) we closed on a $12,400,000 apartment community, Pinnacle on Pleasant. To date URS has acquired over $110M of multifamily properties and raised over $50M of private capital.

THE “STORY” OF PINNACLE

One of our broker contacts in the market brought Creekside Apartments (Pinnacle’s former name) to our attention in the beginning of 2015.  This was a deal not getting huge attention as it was listed by a smaller commercial broker.  The partners were successful fix and flippers and this was their first apartment building. They bought the property severely distressed and spent a few million dollars curing major issues.  While they did a nice job producing beautiful units, they ultimately over-improved the units. Their experience was in the single-family world, and they treated each unit upgrade like a single-family home.

Without having real multifamily experience, they were making significant operational mistakes and that was our opportunity. Knowing the inside story of this deal’s history, we knew that the sellers had to get out.

WHY WE LOVED THIS DEAL

  • STRONG submarket. The location is on a main road in very desirable submarket of Cincinnati, with excellent schools and higher level retail.
  • Upgrade possibilities. Because the submarket was so strong, we knew that if improved the amenities, we could pair those exterior enhancements with the very nice interiors and command higher rents with an improved tenant base.
  • Operational Efficiency. We have a relationship with a very sophisticated property management company, and we knew that by putting their systems to work for us, we could maximize the property’s performance – this property now has a steady 95% occupancy.

WHY THIS DEAL WAS DIFFERENT

Our bread and butter has been rough value-add deals, where we come in and do some heavy renovations to rebrand and reposition the property.  Although this deal had some value creation components to it, the heavy lifting was already done.

This plan for this property was primarily operational.  We rebranded to Pinnacle on Pleasant, did some landscape design work, and added amenities (an outdoor kitchen area and a dog run). We knew that these amenities would appeal to our target demographic, elevating the tenant profile.

THE OUTCOME FOR OUR INVESTORS

After 29 months of ownership of the property, we have made seven distributions, the first of which was 6 months prior to our initial forecast. As the end of the first quarter of 2017, Class B investors have earned a 20.7% return (annualized 8.6%), and Class C investors have earned 18.4% return (annualized 7.6%). Occupancy as of Q1 was 95%, and we have maintained steady rent increases of 2.6%.  The hold period for this investment was projected to be 5-7 years; our investors are presented with a thorough business plan prior to any investment.

The value that we create is providing access to deals like this that the general public does not have access to. URS provides complete oversight and mitigates our investor’s risk, offering only heavily vetted opportunities. We have provided over 200 investors an average net investor return of 21%/yr. To create an income producing, diversified multifamily real estate portfolio of your own through direct investments with URS Capital Partners, click here to get started.