Available as a Portfolio or Individual Sale
Berkadia’s Mid Markets Group is pleased to present the 5-property, 1,028-unit IRET Properties portfolio. All five assets are located in very desirable neighborhoods, along Topeka’s strongest commercial corridor, and all sit within the boundaries of the strongest school district in the city. This portfolio is a truly unique opportunity due to the premier location, strong operational history and proven value-add potential at each and every property.
SOLID MARKET FUNDAMENTALS: As of the first quarter of 2019, apartment rents in the metro have increased by 3.5% year-over-year and have posted an average annual gain of 2.4% over the last 3 years. Fundamental demand drivers such as manufacturing hubs, regional medical centers, and long-standing higher education institutions help create stable renter demand in Topeka. Just over 600 units – total – have been delivered in this market since 2000, and as a result, there is a clear gap at the top end of the market that these assets, particularly Sherwood and Colony Court, can occupy and lead the way for rental increases market-wide.
IMMEDIATE SCALE: With 5 assets consisting of over 1,000 units, this offering provides a buyer new to the Topeka MSA a rare opportunity to gain an immediate and significant foothold; or for an already-existing owner in the market to gain additional efficiencies. In addition to the sheer number of units, the proximity of the assets to one another presents the potential to centralize the leasing and maintenance staffs to prevent redundancies at the property level and create substantial savings to the bottom line. This is the rare opportunity where an ownership group can cut staff without affecting their responsiveness and efficacy, while still managing to continue to drive the NOI.
VALUE ADD THRU INTERIOR UPGRADES: With occupancy at all five assets at or near 100%, all five assets should benefit from organic rent growth even without having to invest substantial capital. That said, current ownership has invested heavily into the physical integrity and condition of the property over the past few years. With the luxury of not having to bury capital into the exteriors or the property systems, new owners can focus their capital on the unit interiors and amenity upgrades that generate the greatest rental increase. Capital infusion and aggressive management will allow new ownership to create value by bringing occupancy and revenue levels up to market norms. In addition, all but one of the assets has successfully implemented an interior renovation program that has produced consistent rental premiums.
ATTRACTIVE FINANCING OPTIONS: All five of these properties are being offered on a free and clear basis, allowing a new investor the ability to access today’s very attractive capital market solutions. New ownership will have the ability to capitalize on the highly competitive debt environment for multifamily assets and, with historically low interest rates and the opportunity for interest-only payments, exceed long-term return thresholds.