In February of 2022, an apartment owner contacted the Sweetwater Property Management (SWPM) team about one of his apartment communities. The owner has a long-standing relationship with Sweetwater in North Carolina, but the property in question was in Denver, CO.
THE PROPERTY
The 402-unit property was purchased in 2015 for approximately $117K per door. The property was a value-add opportunity, and the owner was now ready to exit, but the community was not prepared to go to market. The owner was deep into completing the major maintenance and renovations, which had started in 2018 and were delayed to numerous factors.
THE CHALLENGE
By the start of 2022, the renovations were delayed further due to covid and missing deadlines, occupancy was averaging 86%, the delinquency rate was climbing, and financials were impacted.
The owner reached out to Sweetwater Property Management for assistance because of how effectively and efficiently they manage his North Carolina asset. In order to get the highest and best price per door, renovations needed to be completed and the property stabilized.
The SWPM quickly drafted a tailored action plan and presented it with a timeline and resources needed. This specialized plan entailed managing the day to day operations with an emphasis on renovations and team building– He was confident that SWPM could deliver the results.
To understand the size and scope of the situation, Sweetwater sent one of its highly experienced Senior Property managers to tour the site, review operations and evaluate the current property management in place.
Key Issues Identified:
Onsite management team was not effective.
Needed Focus on Delinquency and coordinating with government agencies
In need of coordination of exterior major renovations.
30 units down due to major renovation.
Slow turning of units
Outdated marketing
Outdated Model
Curb appeal in need of refreshing.
Once the property tour and operational review were completed, SWPM returned to the owner and gave him a series of options. Since the owner was preparing to exit the property, the primary recommendation was for Sweetwater to provide consulting services focused on the most pressing issues. In this way, the team could offer the most value to the owner over a short timeframe by tackling the property’s most complex challenges and setting the stage for a successful sales transaction.
THE PLAN
The strategic plan was to relocate one of SWPMs talented property managers onsite to oversee the renovation, property management transition, and sales process. This would include guiding rebranding, marketing improvements, and preleasing.
Key Issue Resolution:
Replace management team and establish clear guidance and expectations.
Reduce vacancy and delinquency rates with expected turn over guidelines
Provide coordination between the renovation teams and new property management.
Refresh units – flooring, paint, appliances.
New branding and updated marketing.
Create a set of incentives for the leasing team and focus on preleasing units.
Coordinate meetings with the City to ensure clear communication
Create consistent action plans for resident retention
THE SOLUTION
On February 10th of, 2022, work began in earnest. Over the next four months, the SWPM consultant in Colorado guided the property’s renovation, rebranding, and preleasing. Work that had been delayed for years and was over budget was finally moving ahead rapidly.
Over the next few months, the 30 units requiring major renovations were completed and preleased, the delinquency rate was effectively eliminated, unit updates were completed between tenant turns, and amenities were added. Renovations included completely redoing the HVAC systems and significant plumbing work.
While all the work was going on, the consultant guided the transition to a new property management team, helped develop new branding, and facilitated property tours during the sales process.
When the SWPM consultant flew out on June 10th, the renovations were complete, the property was rebranded and was 100% preleased, and the sales process was complete. In total, the renovations cost $5MM, but the owner sold the property for approximately $274K per door – more than doubling the original purchase price.
SUMMARY
Not only did the SWPM team solve the owner’s problems, but they also reduced his stress and workload while increasing the property’s value. By leveraging their knowledge and experience, the Sweetwater Property Management team identified critical issues, created a plan, and guided the execution efficiently and professionally.
What issues are you facing with your properties? The Sweetwater Property Management team can specialize in a plan to get the desired results by identifying what needs to be done and what is impactful.
Sweetwater Property Management end
910.965.0668
Sweetwater Property Management Protects Your Investment.
We take a mindful approach to protect the value of your investment by providing unparalleled service to our residents, creating a balanced culture at the property level to deliver achievements of success.
We understand the intricacies of managing a property; from maintaining impeccable curb appeal and brand management to leasing achievements and market trends. Our team consistently maintains high occupancy rates while minimizing rental losses to reach the potential NOI.
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