Multi-Family Portfolio

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Project Information

Project Type
Multi-Family Rental Portfolio

Location
Florida, Arizona, Washington

Number of Units
1,994

Nature of Assignment
Asset Management and Advisory Services


Results

  • Increased occupancy from 84.2% to 93.2% in severely downward trending market (January to August 2008)
  • Increased occupancy on individual assets by as much as 23%
  • Implemented accurate budgeting and accounting controls to ensure timely payment of debt service and operating expenses
  • Renegotiated existing renovation program, budget savings of $3,000 per unit.

Background

In December of 2007 TM Realty Services was engaged to perform asset management services for a 3 state portfolio of 6 properties, which encompassed a total of 1,994 units. The engagement was made via the special purpose entities owning each property and was implemented by both the operating partner and the institutional partner that provided equity to the venture. The properties were experiencing a wide range of operational and market driven challenges that were affecting occupancy, loan compliance, lender relationships, as well as ongoing renovations and unit turns. The cumulative effect of these issues placed a severe burden on the overall cash flow and debt servicing ability of the individual properties. To complicate matters further, approximately four weeks into the assignment, the operating partner filed for Chapter 11 bankruptcy protection at the corporate level below the special purpose entities.

From the outset TM Realty Services worked closely with the property management companies to provide detailed physical status reports for the properties and established achievable budget projections for ongoing operations and renovations. TMRS worked with the lenders and equity partner to establish a timeline for the needed capital calls and project draws necessary to get remaining units back on line and producing revenue. Furthermore, market studies and cost analyses were completed to evaluate the need for renovations and other planned capital improvements. This resulted in cost reductions of nearly $3,000 per unit for interior renovations. Adjustments were made in rental rates and staffing to bring occupancy levels and operating costs in line with market conditions. Within a short time of TMRS’s involvement operating performance and occupancy increased.