Duo
Newly rebranded as DUO, the renovated property increased in value by 216% from the time of acquisition to completion of renovation
Property Overview
In October of 2016, Jevan acquired the 121-unit Casa Blanca in Phoenix, AZ in the up-and-coming Melrose District. With a walk score of 77 DUO offered residents a, somewhat unique to Phoenix, walkable lifestyle in the heart of Midtown. In turn DUO rents outperformed more modern buildings with larger apartments proving the Jevan thesis about tenants who choose to live in efficient low maintenance and healthy environments are not necessarily bargain hunting, it's a lifestyle choice.
Strategy
Ultimately DUO generated revenues of $38 per rentable foot vs high teens for conventionally sized rentals in the market. Smaller apartments meant lower operating costs for Jevan making more net operating income per unit than average. State of the art climate control installed by Jevan meant tenants were comfortable all year when most vintage buildings fail to perform due to antiquated systems not keeping up with today’s warmer climate.
Investment Summary
- Able to recapture an additional unit through re-purposing an underutilized maintenance shop
- Increased rents over 97% from the average in place rents at the time of acquisition
- Reduced utility expense through system upgrades 58% from prior owner
- All in basis well below replacement cost and significantly below recent sale comps in the sub-market
- Successfully sold the property at 305% over purchase price
- Jevan added a unit by moving the leasing office to the former shop making 122 rentable units at the time of sale
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