Beechgrove Apartments was a multifamily assignment located in a suburban area with a total of 452 units across 2 separate phases. It had been foreclosed by a bank due to non-payment of mortgage by the previous owner. The property was approximately 40% occupied when assigned, and been the subject of a long and contentious dispute during which time it had deteriorated and required significant repairs and renovations. Additionally, due to its organizational structure it was operated as 2 separate 501©3 tax exempt entities, both of which were forfeited due to intentional non filing of informational tax returns. The bank was looking to sell the property and wanted to ensure that it was in stable condition and properly managed until it could be sold.
The property faced several challenges due to its foreclosure and vacancy status. These included:
- Poor property condition: The property had been underutilized and under occupied and areas had suffered from neglect and vandalism. Some units required significant repairs and renovations to make them habitable.
- Financial constraints: The cash flow from occupied units had suffered from inconsistent and unengaged management.
- Tenant retention: The property had lost many previous tenants, and the property had a poor reputation in the area hindering leasing.
To overcome these challenges, the property management company implemented the following plans:
Inspection and Repairs: Property One conducted a thorough inspection of the property to identify any damages and issues that required repairs. Essential needs to make units habitable, such as fixing plumbing and electrical issues, repairing roofs, and securing the property were prioritized. We also conducted cosmetic repairs to improve the property's appearance, such as painting the units, replacing carpets, and updating the model unit.
Staff Retraining, Marketing and Tenant Screening: We evaluated current staff and repositioned the staffing model to meet the full operational needs of the community. We also put together a marketing plan to attract new tenants.
Cost Optimization: We worked closely with the bank to ensure that they were operating within the financial constraints. We also negotiated with vendors and suppliers to get the best prices for the required services and materials, in many instances rebuilding relationships that had been damaged during the time the complex was in dispute.
Reorganization: We applied for and had reinstated the 501©3 status of the properties though a reapplication and certification process to make the property marketable to potential buyers.
The strategies implemented with the careful consultation of the bank yielded positive results. The property was brought to a standard required by fair housing, and presented better to both potential residents and owners. New tenants were attracted, and the vacancy rate decreased by 20% in the six-month period we acted as keeper. The property generated sufficient revenue to cover expenses, and the bank was able to advantageously dispose of the property.