- A Unique, Large Scale, Naturally Occurring Affordable Housing Opportunity
- The Ability to Increase Net Rental Income by $2,300,000+ by Stabilizing Current Operations at the Current Rent
- Opportunity to Unlock Revenue Potential with Additional Capital Improvements
- A Significant Capital Investment of $9,000,000 Made Since 2019
- The Opportunity to Immediately Achieve Critical Mass with 834 Units
- Opportunity to Pursue Future Grants and Public Funding with the Current Ownership
- Opportunity to Recapitalize Existing Ownership or Purchase the Property Free and Clear of Existing Debt
- Unmatched Convenience and Accessibility in Suburban Minneapolis
Boost Net Rental Income by $2,300,000+ by Stabilizing the Operations at the Current Rent
By stabilizing occupancy at 95%, Huntington Place has the potential to generate an additional $2,328,038 in net rental income over the T12 operation. See the “MMG Current Rent Proforma” for comparison. While currently operating at 80.46% occupancy, pre-COVID the property consistently maintained a mid-90% occupancy rate. Comparable properties in Brooklyn Park boast a mid-90% occupancy rate. The opportunity for operational upside via lease-up and stabilization of the asset is immense.
Creative Structure Available to Fund Capital Projects and Reduce Overall Equity Requirements
The current ownership group is open to recapitalization or Joint Venture proposals, allowing a new owner to have access to the in-place funds and future grants. If a new owner creates a partnership with the current owner/Sponsor, they will have the ability to take advantage of the Sponsor’s pre-existing relationships and ability to access and manage public funds. This will allow a new owner to optimize and reduce the overall equity needs to capitalize the acquisition.
One proposed structure would include the current Sponsor transferring operational and management control to a new owner while retaining a role in preserving and securing current and future grants and public funding.
Additionally, the Department of Housing and Urban Development (HUD) has awarded Huntington Place nearly $4,000,000, specifically earmarked for capital expenditure projects at the property. Further, there are additional significant state funding opportunities being pursued by the existing Sponsor that could also be available. Information will be made available as new information is received.
Finally, pending legislation that would significantly reduce real estate tax expense via the 4D Low Income Rental Classification Rate. The proposal calls for a reduction in millage by 66% and from 0.75 mills to 0.25 mills. Information will be made available as new information is received.
Opportunity to Unlock Revenue Potential with Additional Capital Improvements
Huntington Place is well-positioned for additional capital improvements even while continuing to stay below current income restrictions. Based on a strong comp set, the upgraded market rent potential of $1,150 (well below the $1,320 maximum allowable rent) presents a compelling thesis. Additional capital improvements to the interiors and the asset will allow a new owner to capture rents at the top-end rent of the competitive set, while still operating below the maximum allowable levels.
There is significant upside with approximately 76% of its units remaining for potential upgrades. The current owner has already completed upgrades on nearly 200 units, representing 24% of the property’s units, providing a solid foundation for new ownership.
It should also be noted that by implementing simple operational changes the gap between the current rent and market potential can easily be closed with very little capital.
