MULTIFAMILY VALUE-ADD
RENOVATIONS
Increasing Value Through Renovations
Multifamily value-add strategies require a careful balance of improvements, cost considerations, and market dynamics. Successful execution involves a deep understanding of the local market, thorough planning, and effective communication with both current and prospective residents. Our clients regularly contact us for assistance in developing and implementing strategies to increase the value of investment properties by making strategic improvements or changes. This can involve renovating units, upgrading common areas, improving management efficiency, and implementing other enhancements to attract higher-paying tenants.
Gates Hudson Construction Services specializes in managing value-add renovation and capex projects, which allows us to streamline communications between construction, management, and our clients.
OUR
APPROACH
Property Assessment
– Due Diligence: Conduct thorough due diligence before acquiring a property to identify areas for improvement and estimate potential renovation costs.
– Physical Inspection: Evaluate the physical condition of the property, including the condition of individual units, common areas, and exterior spaces.
Market Analysis
– Rent Comparisons: Analyze rent levels in the local market to understand the potential for rent increase premiums after improvements.
– Resident Demographics: Analyze the preferences and needs of the target resident demographic in the area.
Renovation and Upgrades
– Unit Upgrades: Work with clients to calculate ROI for renovating individual units with modern fixtures, appliances, flooring, and other attractive features. It is critical to define the project scope that delivers the best return.
– Common Area Improvements: Work with clients to plan enhancements to common areas, such as lobbies, fitness centers, and outdoor spaces, to create a more appealing and competitive living environment.
Technology Integration
– Modern Software: Implement modern property management software programs to improve the living experience for residents, streamline operations, and improve overall efficiency.
Operational Improvements
– Efficient Management Practices: Evaluate and improve property management practices to enhance efficiency and resident satisfaction.
– Expense Reduction: Identify opportunities to reduce operational expenses without compromising the quality of services.
Resident Communication
– Communication Strategy: Develop a communication strategy to keep residents informed about renovations, improvements, and any disruptions to their daily lives.
– Feedback Mechanisms: Establish channels for receiving feedback from residents, address their concerns, and make adjustments as needed.
Marketing and Branding
– Repositioning: Develop a repositioning strategy to market the property as an upgraded and desirable living option in the area. This may include the development of a new name, logo, and brand if appropriate.
– Digital Marketing: Utilize digital marketing channels to showcase the improvements and attract potential residents.
Financial Analysis
– Budgeting: Develop a detailed budget for the renovation and improvement process.
– Return on Investment (ROI): Conduct a thorough financial analysis to understand the expected ROI and timeline for realizing increased property value.
Legal and Regulatory Compliance
– Permitting: Ensure all renovation and improvement activities comply with local building codes and regulations.
– Lease Agreements: Review and update lease agreements to reflect any changes in terms or policies resulting from the value-add strategy.
Timing and Phasing
– Project Timeline: Develop a realistic timeline for the completion of renovations and improvements.
– Phasing Plan: We partner with our clients to develop a phased renovation plan to minimize disruption to existing residents and allow for a more manageable renovation process.
The goal is to enhance the property’s overall appeal and create a more profitable and sustainable investment. We have honed these skills for many years and are local experts in multifamily value-add real estate programs.
Parc View
Arlington, Virginia
Upon acquisition in 2017, Parc View presented an outdated aesthetic predominantly featuring classic unit layouts, characteristic of its 1962 construction. The floor plans were compartmentalized, and the apartment finishes reflected a bygone era. However, analysis of the Arlington submarket and the property’s target demographics revealed the potential for rent premiums to support a substantial in-unit renovation initiative.
In close collaboration between Gates Hudson and our client, a comprehensive renovation strategy was devised. The objective was to modernize the floor plan layouts, creating open and inviting spaces, while also upgrading the unit finishes. This involved the removal of walls to enhance spaciousness, as well as significant enhancements to kitchens, flooring, bathrooms, lighting fixtures, and appliances. Additionally, strategic additions such as in-unit washer/dryer installations were deemed imperative to realize the rent premium goals.
Implemented as units turned over, this renovation program has yielded remarkable results. Parc View’s net rent potential and net operating income has experienced a notable increase of more than 20%, underscoring the success and efficacy of the renovation efforts.
Haven Mount Vernon
Alexandria, Virginia
In 2016, our client embarked on the acquisition of Haven Mount Vernon for $11.4 million. At the time of purchase, the property’s common areas and amenities exuded a dated charm, while the majority of its units adhered to classic-style designs. Positioned within the vibrant economy and robust rental market of Northern Virginia, a comprehensive analysis revealed a compelling value-add opportunity.
Following the acquisition, Gates Hudson promptly assumed the responsibility of revitalizing the property. This encompassed the refurbishment of common areas and the meticulous renovation of apartments, featuring upgrades such as new flooring, cabinets, countertops, appliances, and fixtures.
Throughout the transformation, our operations and construction services teams operated in seamless harmony, prioritizing occupancy levels while efficiently renovating units as they became available. Fast forward 4-1/2 years from the initial acquisition, and our client’s decision to divest proved immensely rewarding, yielding an impressive annualized return of 16.3% on their investment.
Haven Fort Belvoir
Alexandria, Virginia
In 2016, our client acquired Haven Fort Belvoir for $3.4 million, aiming to enhance 60% of its units and boost the asset’s value. The property’s outdated common areas, amenities, and interiors called for extensive refurbishment. Despite this, the property’s advantageous location in Northern Virginia, near Fort Belvoir, promised a lucrative return on investment.
Gates Hudson promptly took charge of renovating the property, starting with modernizing the common areas and amenities to cater to the target demographic. Working closely with ownership, we devised and executed a comprehensive unit renovation plan, including the installation of new cabinets, countertops, appliances, and fixtures.
Our operations and construction teams orchestrated seamless renovations while maintaining high occupancy levels. The improvements resonated with residents, allowing us to strategically increase rents and maximize ROI. Four and a half years later, our client realized a remarkable annualized return of 16.3% upon selling the asset.
LET US MANAGE
YOUR SUCCESS
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