Los Angeles, California | October 12, 2018
Apartment Income Investors (Aii) is pleased to announce the $63 million sale of a five-property, 1,368-unit apartment portfolio in Tulsa, Oklahoma. Aii acquired the portfolio in April 2014 in an off-market transaction sourced through existing broker relationships at an attractive price per unit based on sale comps for similar properties. The portfolio consisted of four stabilized properties with steady cash flow at purchase and one with the opportunity to increase occupancy and rental rates through interior upgrades.
Aii implemented a business plan to improve operational efficiency and attract high-quality tenants by providing a premium rental experience and greater community involvement. Community activities sponsored by Aii included partnering with a local YMCA and inviting first responders to resident events throughout the five properties. In addition, Aii implemented a capital improvement investment at the Canyon Creek property, renovating common areas such as the swimming pool and playground and transforming unit interiors. As a result of Aii’s business plan, rental rates increased by 12.09%, net operating income increased by 16.89%, and the net return to investors was 21.86%.
Michael Chesser, President and Founder of Aii, said, “The Tulsa 5 properties are an example of the Aii team increasing local involvement to benefit the lives of our tenants and the community at large. Specifically, first responders—local police and firefighters—were invited to participate in tenant appreciation events. By bringing fire trucks, police cars and uniformed officers to the properties, the children of our tenants became more familiar with these local heroes, and first responders got to know others in the community better. Such events foster harmony in the community and a safer environment. All these activities help improve financial performance and return on investment.”
Aii sold the portfolio at a premium price due to the aggressive profile of the buyer and the economies of scale inherent in several properties with 1,368 apartment units. Along with a positive time in the real estate cycle, these conditions created an ideal situation to harvest profits. For more information, also see this case study showing how the Tulsa 5 investment exemplifies Aii’s investment process.
About Apartment Income Investors
Founded in 1994, Apartment Income Investors (Aii) has a proven track record of buying underperforming Class B multifamily properties and implementing renovation and repositioning strategies to improve operations and substantially increase the value of each property. This strategy has proven successful through several real estate cycles with above-average returns to investors. The company’s goal is to transform homes, lives and communities while delivering superior investment returns. Aii recently launched Transformation Housing Fund, L.P. to take advantage of rising demand for rental housing.