Sun Ridge Apartments is spread over 4.56 acres, the asset consists of nine buildings constructed on concrete slab foundations with brick and wood exteriors, and both flat and pitched roofs. Additional features include an asphalt parking lot, as well as mature trees and shrubs. Sun Ridge has individual HVACs and a boiler system on-site.
In addition, the property has two separate building structures, one has mansard roofs and the other is pitched. The mansard roof buildings are separately metered and the pitched roof buildings are master metered with a boiler system. Common area amenities include, but not limited to controlled access gate, sparkling swimming pool, laundry facilities, on-site leasing office, and an on-site bus stop (065).
Sun Ridge Apartments has an excellent unit mix of 29 percent one-bedroom units, 60 percent two-bedroom units, and 11 percent three-bedroom units. Floor plans range in size from 750 square feet to 1,440 square feet with an average of 1,065 square feet.
A well-capitalized investment group can potentially improve the unit interiors by updating flooring, paint, cabinets, black kitchen appliances, light fixtures, bathrooms, adding faux wood blinds, and brush nickel hardware. A future owner can continue to operate as “All Bills Paid” emphasizing bringing rents to market rates while possibly reducing utility expenses through water reduction, and various energy saving initiatives such as adding solar screens, new energy efficient windows, and exterior low reduction lighting. Present ownership has a new electric energy contract that began in June 2018 and should reduce current billing to the tune of 20% going forward.
Another path is implementing stringent property management techniques and systematically passing through all expenses to the tenants over time. With 98 income-producing units, the property has the ideal economies of scale to engage a reputable third-party property management firm to retain market rate rent levels for either path.
There are five similar “All Bills Paid” assets with similar tenant profiles along the Interstate 35 corridor in between Interstates 20 and Interstate 30. These four rent comps are achieving rents ranging from $.93 to $1.21 per square foot. Present ownership has long operated at rental rates at $0.79 per square foot, reflective of 2014 market levels. Ownership has recently increased asking rents most notable on the three-bedroom units. Over 30 percent of the leases are on course to expire or have expired allowing a future owner ability to negotiate higher rents on lease renewals or proceed with modifying unit interiors.
