|HUNTER'S RIDGE APARTMENTS - ELGIN, ILLINOIS||Top-notch team of specialists improved occupancy, resulting
in a sales price that delivered an IRR in excess of 40%
Value Add Apartments is a strategy that Marquette has been perfecting for years. While most investment firms stop at the initial acquisition, Marquette begins the hard work of executing a strategy that creates value. It's not just one thing, it’s the twenty little things that add up to bigger returns.
MARQUETTE ADDS VALUE THROUGH TENACIOUS IMPLEMENTATION THROUGH THE COMBINATION OF A UNIQUE ARRAY OF SERVICES, STRATEGIC COSMETIC IMPROVEMENTS, UNCOVERING THE OPPORTUNITIES FOR DRIVING INCREASED NOI'S AS WELL AS IMPROVED AND PROFESSIONAL OPERATIONS.
Darren Sloniger - Managing Director, Acquisitions
The Marquette formula has been successfully executed time and time again. There are certain elements that the acquisition team are always searching for when sifting through the opportunities as they present themselves. The following are the main criteria that are used to determine if a particular asset will be pursued by the Marquette acquisition team.
Below Replacement Cost - Even in today’s heated apartment market, there are still great opportunities to purchase strong Class A and B assets for below replacement cost. While it is becoming increasingly difficult in some areas, in others, with rising construction costs, the gap between where some assets can be purchased today versus building in those same areas will continue to widen. Purchasing at the right basis to insure there is still plenty of room to exit at a good basis at the end of the hold period when compared to replacement cost is critical for new acquisitions.
Lagging Rents - Another critical factor in the Marquette acquisition formula is to seek those assets where the current net effective in place rents are lagging behind the rest of the comp set for the immediate area. This allows the Marquette team to implement a value-add strategy whereby the renovation or repositioning is simply for the most part moving rents up to meet the rest of the market rather than projecting to break the rent ceiling for any given area.
X Factor - The Marquette team is always looking for deals that are “broken” in some way. If a property is lagging behind the competition on rents, that is usually an indication that there is an issue. The team seeks to identify the issue and “fix it” in the value-add strategy. The issue can be anything from mismanagement, a need for a cosmetic facelift, major renovation, repositioning, or simply adding or enhancing amenities, these issues are addressed and budgeted for in the underwriting to create an effective value-add strategy that actually works.