price per unit
“Could not have done it without them! Craig and Scott did a great job in marketing and working with both buyer and seller to efficiently make the sale happen. Would definitely work with them in the future.”
The NAI Global Great Lakes Region Team secured an exclusive listing to sell a fractured condominium (160 units out of 168 units), market rate apartment community in a suburb of Grand Rapids, Michigan. The multifamily team consulted with the owner to initiate the buy-back of units previously sold. At the time of sale, 160 of the 168 units had been assembled under common ownership. Unit rents were significantly below market, as the owner had been reluctant to raise rents over many years. The asset, while very well maintained, also had fairly dated interior finishes. The challenge was to maximize the asset value for the owner’s estate, despite the lack of current revenue to support market pricing. The NAI team guided the owner in raising his rents on unit turnovers.
A detailed offering memorandum was created that showed a specific value add/renovation plan, developed with proven market data, that could be implemented by a buyer. Using our extensive property and contact database, we contacted all owners of market rate multifamily assets over 100 units in size. We identified prospects who had purchased both Class B and C properties with a value add component. In addition, we networked with influencers such as CPA’s, attorneys, financial advisors and wealth management groups. Using our strategic marketing plan involving drone video, a custom property-specific website and digital outreach to thousands of investors, the team was able to generate offers from numerous national, regional and local investors. NAI worked closely with both the Buyer’s and Seller’s attorney to draft a purchase agreement that specifically addressed the legal complexities of a fractured condominium sale.
The property sold by an all cash offer to a very well capitalized private equity group for a 5.50% cap rate. The property represented an excellent value-add opportunity, while providing economies of scale and entry into a strong submarket for the buyer’s portfolio. Both Buyer and Seller were able to accomplish their objectives.