ArborCrowd announced in the third quarter of 2019 that Quarry Station Apartments, located in San Antonio, Texas, has sold. The property’s $49.35 million sale price generated an internal rate of return (IRR) to investors of over 20%, surpassing the original return target of 16% to 19%.
The property sold only 22 months after the transaction launched on ArborCrowd’s portal, ahead of the initial two to four-year projected hold period.
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“Since inception, our focus has been on bringing quality deals to the crowd,” said ArborCrowd Co-Founder and COO Adam Kaufman. “This is a responsibility we take incredibly seriously, and it’s why we employ such a rigorous vetting and underwriting process. We prioritize strong real estate fundamentals over the volume of deals, which is an exception to the norm in real estate crowdfunding. This ‘real estate’ first approach differentiates us, and the solid returns we’ve delivered to our investors validate our business model. ”
Quarry Station’s value was enhanced through a comprehensive capital improvement program and implementation of institutional property management. Changes included a rebranding of the asset and interior and exterior renovations. These actions created a highly desirable asset that capitalized on the property’s location in the popular Alamo Heights neighborhood.
The property was successful despite micro and macro-economic challenges, including rising interest rates in 2018 and a spate of newly delivered residential units that came to market offering significant rent concessions.
The sponsor took a proactive approach to navigate the competitive market by expanding the scope of the renovation work on the property. Roughly 160 units were upgraded and approximately 35 units were gut renovated. Additionally, common area improvements included a new clubhouse, upgraded fitness center, new security gates and foundation repairs. As a result of the sponsor’s actions, the net effective rental income increased by 17% during the hold period.