San Marco Village Apartments

San Marco Village Apartments is 106 apartment homes, located in the historic San Marco Neighborhood, minutes from Downtown Jacksonville, FL.

Property Overview

San Marco Village Apartments is 106 apartment homes, located in the historic San Marco Neighborhood, minutes from Downtown Jacksonville, FL.  The San Marco Square is recognized as one of the trendiest and most upscale areas of the MSA with high-end boutiques, art galleries, dining, and entertainment.  Just minutes away are over 120,000 jobs within the Downtown and Southside Business District.  The Jacksonville MSA is the largest city by population in the State of Florida and the largest city by area in the contiguous United States. 

San Marco Village is block construction consisting of: 1 swimming pool; 1 outdoor kitchen; 1 laundry facility, fitness, and pet park. Unit features include: fully equipped kitchens; walk-in closets; and storage / bonus rooms & washer/dryer connections in select units.

Premise

On March 26, 2016 San Marco Village was acquired through a local brokerage firm.  The property was being dually marketed by the same owner of another similar quality asset in Seneca, SC through a different bidding process.  As we came into this knowledge, we immediately took advantage of the opportunity and leveraged our negotiations in conjunction with the South Carolina deal, and was able to acquire San Marco at a 10% discount to the NAI appraised value of $8,800,000.  Our purchase price was $8,000,000, or $75,472 per unit.

The investment strategy was to clean-up the exterior, tune up the roof shingles, update the pool tile, add an outdoor kitchen, and improve the landscaping throughout the property.  The annual net-operating-income (NOI) increased from $487,976 at acquisition to $638,623 – a 30.9% growth in 30 months.  This was accomplished by executing a minimal value-add program combined with excellent oversight by our asset management team, again, leaving more than 90% of the interior units to renovate by a new owner upon disposition.

On September 27, 2018, the property went under contract for $10,800,000, or $101,887 per unit, a 5.7% CAP rate after reserves. By comparison, Montcler Landings Apartments, a similar vintage property in the market sold during this time frame for $88,549 per door, and another sales comp, Laurel Pointe sold for $81,250/unit.  The sale of San Marco Village achieved an increase in value of 35.0% in 30 months of ownership.

Investment Summary

City State Seneca, SC
Asset Type Multifamily
Months Held 30
No. of Units/SF 106 units / 89,750 sq ft
IRR 49.5%
Equity Multiple 2.0x
Avg Annualized Yield 12.3%
Acquisition LTC 74.9%
Total Rehab Budget $201,939
Total Investment Basis $2,178,061

 

  At Aquisition At Sale % Increase
NOI $487,976 $638,623 30.9%
Annual Rent $949,542 $1,062,176 11.9%
Price $8,000,000 $10,800,000 35.0%
Occupancy 95% 97% 2%
Price per Unit $75,471.70 $101,886.79 34.9%

 

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