INVESTMENT STRATEGY
As an exclusive advisor, MMG Real Estate Advisors is pleased to offer the opportunity to purchase The Bradshaw, a 404-unit, very well-maintained multifamily community located in Baton Rouge, Louisiana, directly across the street from LSU, one of the largest public universities in the country. Previously operated as a student property, the current owner has converted the community to a nearly 100% market rate while in the middle of a pandemic. The covid shutdown led to high vacancy followed by extremely quick lease-up in 2021 at very low rents, providing new ownership a tremendous opportunity to capture loss to lease upside easily. Additionally, the Bradshaw opportunity offers significant upside through renovation and has the best location of any market-rate competitor nearby leaving no ceiling for potential rent levels.
TREMENDOUS VALUE-ADD THROUGH LOSS-TO-LEASE BURN-OFF
The Bradshaw opportunity offers over $1 million in additional annual revenue through a loss to lease burn-off value-add strategy which is proven in recent months. By bringing the very low current average rent of $727 to the recently achieved lease rate average of $936, new ownership will add $1,011,983 in additional revenue. The demand for market-rate apartments is clear due to the high lease-up velocity during Q1 2021 when current ownership leased 94 units (1.54 per working day) with a very low average rent of $597. Furthermore, the top recent lease rate average of $936 is still below market offering additional upside through interior renovation.
$154/MONTH UPSIDE THROUGH INTERIOR VALUE-ADD STRATEGY
The proposed overall target rent of $1,089 ($1.30/SF) is conservatively in-line with inferior located rent comparables and represents a $362/month rent increase compared to current average rents and a $153/month increase compared to top recent lease rates already achieved!! The Bradshaw was developed in two phases creating multiple levels of renovation upside:
- Phase I consists of 296 units. All 296 units were renovated to condo-level in 2009 including granite countertops, stainless steel appliances, brand new cabinets, flooring, light fixtures, and more. Current ownership has kept these units very well maintained.
- Phase II consists of 108 units. Over the last two years, current ownership has renovated 68 Phase II units with flooring, appliances, light fixtures, window treatments, and paint. Additional upgrades were made on an as-needed basis including new countertops, vanity’s, HVAC, and water heaters. New ownership can continue the interior value-add program on the remaining 40 units and also take all units to the next renovation level.
By bringing the current max achieved average rent of $936 to the stabilized target rent of $1,089, new ownership will add $154/month or $746,184 in renovation upside which is proven in the market.
