Tennis Court Conversion Increases Return Multiple for Apartment Sale

A case study emerges in Atlanta on how to achieve outsized investor returns. By David Wilkening

RESIZED-southwindsATLANTA—A value-add strategy that included details such as a tennis court conversion that was a model for others led to a return multiple of 2.5 times the total equity invested with the recent sale of an apartment community.

PointOne Holdings announced the $28.35 million sale of Southwinds Point Apartments, a 240-unit garden-style multifamily apartment community located in Metro Atlanta’s city of Stockbridge. The property sold in January, generating a return multiple of 2.5 times the total equity invested in a period of three and a half years.

Southwinds Point was successfully marketed and sold by David Gutting of JLL.

“What made this transaction a tremendous success for both buyer and seller was PointOne Holding’s success in establishing a well-proven value-add strategy that the buyer could easily expand upon” said Gutting. “That strategy, coupled with Point One’s strategic onsite amenity improvements, paved the path for the property to remain competitive in this dynamic logistics corridor.”

“Our initial strategy to spend $1.25 million on a major capital improvement campaign had a substantial impact on the net operating income growth at the property” said Ben Colonomos, PointOne Holdings’ Managing Partner.

Key improvement was a tennis court conversion

He added a keystone project was to convert the tennis courts onto an amenity area that featured a large green space with outdoor kitchens, grilling stations, a central fireplace, walking paths and other popular amenities.

During the period in which PointOne Holdings owned and operated the property:

  • Occupancy increased from 92 to 99 percent.
  • Average effective rents increased by 37 percent.
  • PointOne Holdings drove the property’s quarterly net operating income from $302,000 to $421,000, a 40 percent increase.

Southwinds Point was successfully managed by Pegasus Residential.

“PointOne Holdings targeted execution strategy, our driven focus to improve the community, as well as our attention to detail at Southwinds Point resulted in outsized investor returns in a very short period of time” said Leo Peicher, PointOne Holdings’ Managing Partner.

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