MORAIN ESTATES

Key Deal Facts:

• 30-unit property acquired off-market
• Purchased for $3.5M in 2022
• Value-add business plan (physical renovations and improved management)
• Achieved 100% of proforma post-renovation rents after spending only 50% of the renovation budget

Acquisition Strategy

This deal was brought to CCG off-market by a young broker that CCG had recently formed a relationship with. The asset suffered from deferred maintenance and was not professionally managed, resulting in rents being 50% below market – the market for comparable units in the area was double the rent they were achieving. Although this asset was smaller in size than what CCG typically buys, the huge delta between current and market rents compelled CCG to make an opportunistic offer.

Value-Add Strategy

This business plan was simply to find the untapped potential of this asset by cleaning up the exterior, increasing the curb appeal, and experimenting with interior renovations to see what it would take to achieve market rents. CCG also hired a professional management firm with a national footprint to come in and properly market these units.

Financing Strategy

CCG went to the capital markets to find a regional credit union lender to provide a low cost, 5-year fixed rate construction bridge loan product with attractive prepayment terms.

Exit Strategy

With a focus on short-term yield, CCG aims to sell Morain Estates before the five-year bridge loan matures, capitalizing on the property’s increase in value over this relatively brief period.