Waller Group is proud to present the 106-unit light value-add Cloverdale Estates property in Montgomery, AL. The subject property consists of 16 multifamily buildings and 3 vacant ancillary buildings, along with 142 parking spots.
Current ownership has renovated 79 out of 106 units (75% of total) for approximately $9,315 per unit, which resulted in an average rent premium of $170 / unit. Rents on most renovated units are still low relative to competitors. Interior renovation upgrades included: LED light fixtures, appliances, painted cabinets (new cabinet doors in select units), refinished laminate countertops (new granite in 11 units), new bathroom vanities, new toilets, new paint, new flooring (wood-lock sheet vinyl in common areas and carpet in bedrooms), new faucets, new HVAC (where needed), and new door hardware. Exterior capital improvements included: new roofs on all buildings in Fall 2021, repaving and restriping asphalt parking areas in May 2022, new LED light fixtures (various pole lights and wall packs), new HVAC systems in 21 units (inside & outside) for $5,900 / unit, new water heaters in 18 units, and aluminum wiring made compliant in all renovated units with aluminum wiring.
New ownership has the opportunity to implement interior upgrade program for remaining 27 classic units. Additionally, new ownership has the opportunity to increase additional income by adding laundry facility (using existing ancillary building) and charging for laundry, utilizing the vacant 1-acre lot fronting Glen Grattan for parking income, adding additional granite countertops to units to boost rents, adding dog park to boost rents and induce more pets to charge more pet fees, charging water/sewer fee to current 20 residents that aren’t being charged, adding a pest control fee, adding a trash valet fee, charging for personal storage units in ancillary building, renting washer/dryer units to existing tenants with connections for $50 / month.
Current ownership is achieving $452,949 in annual NOI. New ownership, based upon area rent comps, can raise rents up to $146 / unit, which is a $0.15 / sqft rent bump. With this bump, new ownership can achieve an annual NOI of $683,348.
The property is currently managed by Bottom Line Property Management. Proforma financials were underwritten with a 3.0% management fee.