Sunbelt Fund II Updates > Coleman Place Apartments Closing Update
Coleman Place Apartments
Coleman Place Apartments is a 95-unit complex in Anniston, AL. The property is a 1973 build that has little deferred maintenance, allowing us to finish repositioning the asset by way of the $100+ per month proven rental premium value-add program. As with all our acquisitions, we will leverage our highly experienced in-house property management team to maximize the property’s performance and returns.
Transaction highlights for the Coleman Place Apartments Acquisition
- Coleman is located just minutes from premier retailers like Sam’s Club, Best Buy, Target, Dick’s Sporting Goods, and Publix, and dining such as Chick-fil-A, Dunkin’, Panda Express, Five Guys, Moe’s, Olive Garden, and Longhorn Steakhouse. Additionally, the location offers convenient access to Jacksonville State, the Quinard Mall, and the Exchange. Anniston is almost equidistant to both Birmingham AL and Atlanta GA and commutable to both.
- Along with the increase in revenue, we are set to benefit from a 2+ year repositioning effort started by the prior owners. At the time of prior ownership’s take-over, the average rents were in the $500s, the property had a bad reputation in the area for rude management and poor maintenance response times, and much of the resident base was non-paying. After cleaning house, rebranding the property, and hiring competent management and maintenance personnel, the property has increased average rents to the low $700’s, boasts strong Google and Apartments.com reviews, and is recognized as the nicest community in the immediate area.
- Coleman Place’s location features strong 1- and 3-mile annual median incomes (“AMI”) despite being located in a tertiary market in Alabama. Coleman Place’s 1-mile AMI is $53,628 and the 3-mile AMI is $38,788.
- At the time of first pass underwriting in early November 2020, the property’s average trailing-12 (T12) month income was $55,755 while the average trailing-3 (T3) month income was $67,335, a 20.7% increase. Recognizing and capitalizing on this trend, a trend driven by an improved occupancy and collections, we underwrote to this higher level while keeping a close eye on the collections during the initial stages of our contract period. By February 2021, the property’s average T3 revenue had risen to $70,160, a 4.2% increase from the prior T3 level or a 25.8% increase from the initial T12 level. By identifying the positive trend, we were able to acquire the asset below where it would have traded this Spring 2021.