Franklin Square Apartments is 76 apartment homes, located 25 miles north of Memphis in Munford, TN, of Tipton County, the second fastest growing county in West Tennessee. Munford boasts a high median household income, home values, and is known for its low crime index and excellent school district.
Franklin Square consists of: 1 swimming pool; 1 clubhouse with party room. Unit features include: open kitchen with bar; appliance package with microwave; tile in kitchen and baths; full size bathtubs; electric hot water heaters; separate central air systems; walk-in closets; washer & dryer connections; patio or balcony.
The core-plus opportunity existed in refreshing unit interiors, improving curb appeal and landscaping, and updating amenities including the clubhouse – while pushing rents to market and eventually setting new market rents for the surrounding properties. Lexerd acquired Franklin Square Apartments in December 2012 by negotiating an acquisition price of $4,600,000 from the listing price of $5,275,000 – a discount of 12.8%. The property appraised to a value of $4,800,000, or a 6.4% CAP rate.
For exterior capital improvements, the parking lot was striped and sealed, landscaping was touched up including a major drainage project and a successful preventative maintenance program was implemented. By October 2018, the annual net-operating-income (NOI) increased from $309,133 at acquisition to $414,978 – a 34.2% growth. Over the course of the ownership period, there was $578,963 returned in cash via owner distributions.
On October 11, 2018, the property sold for $6,200,000, a 6.7% CAP rate and an increase in value of 34.8% since acquiring the property in 2012.
|City State||Munford, TN|
|Months Held||70 Months|
|No. of Units/SF||76 units / 86,520 sq ft|
|Avg Annualized Yield||9.2%|
|Total Rehab Budget||$184,574*|
|Total Investment Basis||$1,076,437|
|At Aquisition||At Sale||% Increase|
|Price per Unit||$60,526.32||$81,578.95||34.8%|
*2015-2018 actual capital improvement expense