Market Rate Case Studies
Enchanted Woods Apartments
Seattle, WA
OVERVIEW
Guardian Management’s acquisition of Enchanted Woods Apartments fit within the company’s core strategy of purchasing opportunistic multifamily investments with upside potential. The 217-unit property was acquired, renovated and syndicated to a group of nine tenancy-in-common co-owners in April 2005 at a price of $16,735,000. Despite appealing physical characteristics and a desirable location within the Seattle Metro area, property operations suffered from mismanagement and poor physical maintenance. Guardian secured the property in a portfolio purchase from an out-of-state private investment group exiting the Seattle market.
OBJECTIVE
Guardian recognized substantial intrinsic value in Enchanted Woods and projected positive dynamics for the Seattle market. Property management issues and mounting deferred maintenance had prevented Enchanted Woods from producing competitive operating incomes. Guardian’s ownership plan included immediate capital investments to update the property and establishing a new site management team that would improve the resident demographic and ultimately, the net income.
EXECUTION
Within weeks of takeover, Guardian began investing its budget for more than $500,000 in physical improvements, including new paint, landscaping and irrigation, washer/dryer installation and a full clubhouse remodel. A new management team quickly implemented higher resident standards while raising rents to market levels and stabilizing occupancy.
OUTCOME
i. The property benefits from consistently high occupancy at market-leading rents
ii. Property value has grown an estimated 13% per year over the two and a half year ownership period
iii. Owners have nearly doubled their equity since the acquisition