case study – Huntington Station
AT A GLANCE: 3.5 M Capital Invested // 34% IRR Investor Return
THE ASSET:
Huntington Station is a 330-unit apartment asset located at Interstate 85 and Shallowford Road in Atlanta, Georgia. The asset was built in 1973 and renovated in 2001 and 2010. The community has a clubhouse and 53 residential buildings that feature 1, 2, 3 and 4-bedroom apartments; ranging from 790 square feet to 1690 square feet. Amenities include spacious units, outdoor courtyards, a pool, grills, playground, designated soccer area, and a clubhouse. Mesa acquired the property in July 2010 and sold it in November 2012.
THE CHALLENGE:
- Acquire severely distressed Fannie Mae foreclosure asset.
- Close with Fannie Mae’s first asset recovery REO loan in Atlanta.
- Complete renovation project within 6 months of closing that included restoring 40 ‘down’ units to rent ready condition.
- Stabilize the asset within 12 months of closing.
- Occupancy at closing was 70% and declining.
- Buy, renovate, stabilize and sell asset within 4 years of closing.
THE RESULT:
- Completed $1.2M in capital renovations and completed the rehab project within 4 months of closing - 2 months ahead of schedule.
- Leased and stabilized asset to 95% within 8 months of closing - 4 months ahead of schedule.
- Upon stabilization, paid current cash on cash yields of 15% to investors.
- Sold asset in November 2012, within 2 years of closing.
- Upon sale, Investors earned a return of 34% IRR and 2x of invested capital.
