Glendale Lofts
BACKGROUND
Quest Capital Partners (“QCP”) acquired this mixed-use apartment and retail property which was dubbed “Glendale Lofts” in 2015. Located in Glendale, CA, QCP acquired the property for $2,000,000, invested approximately $700,000, and obtained a$1,400,000 loan from Opus Bank at an interest rate of 4.10% on a 5-year term. Color Me Mine was the seller and also housed their corporate offices in the retail portion of the property. The apartments upstairs were leased at under-market rental rates. The transaction was closed with a sale-leaseback to Color Me Mine on a NNN lease who had invested significant capital in their corporate showroom and office build-out. The apartments upstairs were in need of significant repair and more active management.
CAPITAL IMPROVEMENTS
- Refinish/Repair hallway wood floors
- Security Cameras – Security camera signs
- New glass door entrances to apartments with Glendale Lofts branding
- Installed new exterior lighting, lobby chandelier, interior common area sconces
- Painted lobby, exterior façade, and common hallways
- Installed new mailboxes
- Installed new store front glass door and secure entry with intercom
- Turned and upgraded approximately 3 apartment units with various levels of QCP design finishes
RESULTS
After completing renovations to the common area, apartments, and exterior of the property, QCP was able to increase rents on the apartmentsto market thus increasing cash flow significantly. The much-needed capital improvements were welcomed by current and incoming residents. QCP sold the property in 2016 (a 1-year hold) for $2,725,000 which represented a 78.25% internal rate of return and approximately a 1.85x equity multiple on the investment.
