The Waller Group is proud to present the 87.5% occupied, 112- unit value-add portfolio in Hitchcock, TX. The portfolio consists of 3 properties: Bayou Gardens (8010 Hwy 6), Highland Pointe Apartments (5809 Delany Rd), and Delany Court Apartments (5825 Delany Rd). The portfolio was recently substantially rehabbed and has been repositioned and leased up since. The portfolio is available because current ownership is retiring.
There are currently LURA contracts in-place at each property. The following timeline applies to TDHCA LURA contracts: expires in 2023 at Bayou Gardens (so rents are restricted until 2026), totally expired at Highland Pointe, and expired in November 2020 at Delany Court (so rents are restricted until 2023). As the rehabs were completed with CDGB funds, new 15 year LURAs were placed on each property. The existing contracts require 51% of units to be set aside for tenants making 80% AMHI. The high AMHI of $68,169 means the AMHI restrictions on the LURA contracts never comes into play in practice.
Current ownership is achieving $511,401 in annual NOI. New ownership, based upon area rent comps, can raise rents by $143 / unit, which is a $0.19 / sqft bump. With this bump, new ownership can achieve an annual NOI of $694,103. Additionally, there is the opportunity to implement additional income fees through implementing a ratio utility billing system (billing back for water/trash), application fees, month-to-month fees, and pet deposits. The portfolio is currently managed by a professional management company, and management fees equate to roughly 3.4% of EGI. Proforma financials were underwritten with a 5.0% management fee.