» 251 NORTH
251 North, formerly known as City Scape at Midtown, was acquired off-market in 2014. Vista monitored the 192-unit property for nearly a year before deciding on the right time to make the acquisition. The deal presented a lot of upside in Vista’s eyes; a purchase-price that was a significant discount to replacement costs, large amounts of deferred maintenance, rents that trailed competitors by hundreds of dollars per month, and a boutique asset with desirable floor plans that will never be replicated in an urban environment.
Over $1,000,000 was spent on improving the property; including new roofs, exterior paint and siding repairs, parking lot repairs, and clubhouse remodeling. Focus and capital was also spent on upgrading the interior of the units, which had been neglected by previous ownership. By upgrading select units, Vista was able to close the rent gap between the property and the newer, Class A competition nearby.
The investment was hugely successful, as evidenced the triple digit IRRs returned to the investors. Opportunities like 251 North do not present themselves frequently, but when they do, Vista has the knowledge, skills, and vision to recognize them and successfully execute.
» AUTUMN VISTA
Autumn Vista, a 280-unit garden style property built in Duluth, Georgia, was a highly desirable acquisition for Vista Realty Partners for a number of reasons. Vista’s CEO, Eduard de Guardiola, was the original developer of the property when he was with his prior company so we felt extremely comfortable with the high-quality construction. At the time of acquisition, the asset was under-performing the market due to a lack of focused management and slightly dated look, feel, and appearance.
The strategy to upgrade the appearance and amenities of the property was quickly implemented, executing an exterior paint job with modern color scheme, new roofs, fitness center and clubhouse renovation, new playground, installation of a dog park, and installing a built-in grilling station at the pool. Unit interiors were also upgraded with a new, black appliance package. The combination of all the work completed by Vista, which totaled nearly $1,000,000, was well received by the current residents as well as the new tenants.
Revenue and NOI at the property were both increased by over 10% within the first year of ownership. Vista’s successful development and asset management background were able to quickly transform the property back to competing with the top assets in the submarket. The property was sold in September 2015 generating a nearly 30% IRR for the investors.
» HIGHLAND PARK VISTA
Highland Park Vista, a 188-unit property located in the Sandy Springs submarket of Atlanta, was acquired in early 2013. The acquisition represented an opportunity to invest in a well-located, mid-1990’s construction suburban garden-style community. The asset required minimal capital infusion, with a focus on sprucing up the exterior and amenities of the property and driving rents through improved leasing and asset management.
The investment was able to generate double digit cash-on-cash returns to the investors during the investment life-cycle. This was achieved due to a combination of the low interest rate financing, but also due to the fact we were able to increase total revenue at the property over 18% and NOI by 38% during the first two years of ownership.
The story had been shaped for the next investor. Vista began the process of upgrading roughly 10% of unit interiors to prove the potential rent increases for a new buyer. The upgrades were successful, and in the fall of 2015 the property was sold, generating a 30% IRR to the investors.
» LAKEFRONT VISTA
The property formerly known as Garrison Lakes, located in Marietta, Georgia, was acquired and re-branded as Lakefront Vista in January 2012. The garden-style property was built in 1986 and consisted of 222 units. At the time of purchase the property had fallen in class and suffered from deferred maintenance, which in-turn was negatively impacting performance. Vista came in and successfully turned around the property in less than a year and a half.
Capital improvements included full exterior repainting and vinyl siding repair, window replacements, and the addition of window shutters. A new lighted monument sign was built to increase visibility of the entrance to the property for residents and prospects. Major landscaping and parking lot improvements were also made. Upgrades to the amenities included repairs to the swimming pool to make it operational. In addition, the unused tennis court was repurposed to create a new amenity area with a playground and a gazebo with seating and grilling areas, new playground equipment, and the addition of grills and a picnic area with gazebo. Vista also remodeled the clubhouse pool bathrooms and the model unit, bringing in a fresh design that helped to make the property more marketable to prospective residents.
These improvements were evidenced on the bottom line as the property saw a significant increase in operating income. The property was refinanced in the Fall of 2012 with a low-interest rate agency loan. At this point in time, Vista began to think of an exit strategy. The property was marketed in the Spring of 2013 and sold in May, generating a double digit return-on-investment.
» MOUNTAIN VISTA
The property formerly known as Chimney Trace, located in Stone Mountain, Georgia, was acquired by Vista Realty Partners and re-branded as Mountain Vista in October 2011. The garden-style property was built in 1984 and consisted of 144 units and was purchased from a special servicer. At the time of purchase the property was financially and physically distressed. The property was incurring significant monthly water bills due to leaking polybutylene pipes. The property was also operating the leasing and management office out of one of the units due to the fact the leasing office had burned down and was not rebuilt.
Vista came in and successfully turned around the property in less than two years. The property was suffering from exterior deferred maintenance and a dated painting scheme. We focused our efforts on replacing the poly pipes and improving the exterior appearance of the property.
The one million dollar capital expenditures program included building a new leasing office, swimming pool repairs, exterior painting and siding repairs, as well the replacement of all of the polybutylene water pipes and the installation of low-flow toilets, faucets, and shower heads. With the implementation of the water saving measures, Vista saw a nearly 50% decrease in water bills resulting in a 25% return on cost.
The improvements were positively received by the residents who were now able to utilize the new amenities. The rebuilt leasing office provided the management team with a facility to conduct resident business and was visible to prospective residents. These improvements were evidenced as the property saw occupancy increased over 5% since it was purchased. At this point in time, Vista decided it was time for the next owner to come in and implement the next stage of rehabilitation of the unit interiors. The property was marketed in the Spring of 2013 and sold in June, generating a double digit return on investment.
» SOUTHWOOD VISTA
Southwood Vista, a 300-unit Class A property completed during 2008, was acquired in 2012. Vista saw an opportunity to acquire one the newest assets in the Southwest Atlanta submarket at a significant discount to replacement cost. Lubert-Adler, a long-established Vista equity partner, saw the opportunity as well and was quick to form a partnership.
Through improving operations and leasing, low interest rate financing, and an improving overall submarket, the investment was able to generate cash-on-cash yields greater than 20% to the investors during the ownership period. In late 2014, the property was freshly painted, and along with landscaping improvements, the property was ready to be marketed for sale. After increasing average rents at the property by 10%, the property was sold in early 2015 to a national apartment investor for a profit of over $15,000 per unit, generating an IRR of 63% for Lubert-Adler.
» SANDTOWN VISTA
Vista Realty closed on the successful disposition of Sandtown Vista apartments in November 2016. The property is located in a Fulton County suburb of Atlanta, GA. Vista re-acquired the 350 unit community in June 2014 with a strong knowledge of the asset as the original developer. The equity partner for the transaction was a long-standing, repeat investor with Vista Realty Partners.
The property was still in excellent physical condition upon acquisition, as construction was just completed in 2009. However, the asset was due for a fresh, modern exterior paint job as well as a remodeling of the clubhouse and fitness center to bring the amenities closer to current standards for Class A garden construction. The existing laundry room was converted to a spin studio and washers and dryers were offered to be installed in individual units. Strong property and asset management drove the increase in revenue by 17% annually along with a decrease in operating expenses to yield an overall increase in NOI of 33% annually.
Average rents were increased by over $100 per month in the two-plus years of ownership. Strong rent growth and efficient property operations allowed for strong recurring cash-flow to be paid to investors during the life of the investment. As the property was being positioned for sale, several units were upgraded to demonstrate the potential demand, and the premiums that could be achieved with higher-end finishes. The successful investment generated an IRR of over 40%.
» PARKWAY VISTA AND OAKWOOD VISTA
Parkway and Oakwood Vista reflect the latest successful turnaround of assets that were originally developed by Vista during a previous cycle. The properties are located in the northeast quadrant of Atlanta, GA, just north and I-285 and east of I-85. Vista re-acquired the communities in October 2015. Parkway Vista (224 units) and Oakwood Vista (312 units) were developed in 2002 and 2003 and were still among the top tier assets in their submarkets.
When Vista repurchased the properties, they were in near original condition and were in need of some light capital improvements in order to bring them up to current standards. Fresh, modern exterior paint jobs, landscaping improvements, as well as remodeling of the clubhouses and fitness centers reenergized the properties and brought a renewed vigor to the property operations and leasing momentum. These changes along with strong asset management drove the increase in revenue by 14% in just over 12 months.
NOI was increased by nearly 30% and average rents were increased by nearly $100/month at both properties during Vista’s quick turnaround of the investments. Flexible financing used at the projects allowed for an easy disposition to two different buyers, allowing Vista to command maximum sales proceeds. The successful investments generated a combined average IRR of over 90%.
» WATER VISTA
Vista Realty closed on the successful disposition of Water Vista apartments during February 2015. The property is located in a Gwinnett County suburb of Atlanta, GA. The property had been foreclosed on during 2011 and Vista acquired the deal as an REO in early 2012. The 170 unit property was built in 1981 and suffered from numerous deferred maintenance and operational issues at the time of purchase.
Immediately upon acquisition Vista began the renovation process including replacing the roofs; painting the exteriors; remodeling the clubhouse; significant pool repairs; parking lot repairs; and numerous landscaping and drainage projects. A water savings program was also completed, where all of the old toilets were replaced with new low-flow toilets, which led to a significant decrease in overall water usage at the property.
Vista achieved strong cash flow and achieved a 20% increase in average in-place rents during the course of ownership, as evidenced by the ability to obtain a supplemental loan from Freddie Mac after two years of ownership; allowing a significant portion of the equity to be returned. As the property was being positioned for sale, several units were upgraded to demonstrate the potential demand, and the premiums that could be achieved with higher-end finishes. The strategy was successful, as the investment generated an overall IRR of 33% and a more than 2x equity multiple to the ownership entity which included a large NYSE publically traded mortgage REIT.