Manhattan Place
BACKGROUND
Quest Capital Partners (“QCP”) acquired the 50-unit, “The Manhattan” apartment community in the Koreatown neighborhood of Los Angeles, CA in 2012 for $3,835,000. QCP invested approximately $1,150,000 and obtained a 5-year loan from Capital Source Bank at a rate of 4.35%.
In need of significant improvement and hands management the property was only 85% occupied at acquisition..
- CAPITAL IMPROVEMENTS
- Refinish/Repair hallway wood floors
- Paint basement and epoxy paint floor, general clean up
- Security Cameras – Security camera signsFabricated metal fencing for front lobby windows and back alley
- Installed new exterior lighting, lobby chandelier, interior common area sconces
- Painted lobby, exterior façade, and common hallways
- Installed new mailboxes and mailbox alcove
- Installed new store front glass door and secure entry with intercom
- Concrete at the rear of the property in an alley and in front
- Turned and upgraded approximately 30 units with various levels of QCP standard finishes
- Replace sections of main sewer line under the first floor
- Replace vertical galvanized lines with copper lines on an as-needed basis
- Elevator upgrades/replacements
- New Front Landing
RESULTS
After completing renovations to the common area and exterior of the property, QCP was able to increase the property’s occupancy and stabilized the property up to a consistent 94%-100% occupancy. The much-needed capital improvements were welcomed by current and incoming residents which resulted in a higher retention rate and an average increase in rent of 17%
QCP sold the property in 2014 (2-year hold) for $5,400,000 which represented a 49.50% internal rate of return and approximately a 2.3x equity multiple on the investment.
