Villas del Sol Apartments (“VDS” or the “Property”), built in 1982/1978, is composed of two-story, garden-style buildings and has an attractive architectural design. Situated on 11 acres, it is a medium-density apartment community with 26.80 units/acre. With a total of 294 units, the Property offers a variety of floor plans ranging from 400 square-foot studio units up to two-bed/two-and-a-half bath units with over 1,200 square-feet.

Prior to acquisition, our team had established a strong foothold in the North Austin submarket where VDS is located.  We viewed the purchase of VDS to add critical mass and thus scale to our holdings in the area as well as operating efficiencies. 

We also projected the potential for significant operating gains as the absentee seller had not kept pace with the submarket’s rent growth.  The Seller also experienced recurring problems with its third-party managers, including cost controls, which adversely affected overall operations and leasing execution.  As a result, our team was able to significantly raise rents and enhance overall value via both operational and physical improvements. 

During Q419, the original investors existed the investment via a recapitalization of VDS resulting in a 14.0% IRR and a 1.4 X equity multiple.  Our team, in a joint venture with new equity via a family office, continues to refine operations and perform physical improvements, including reconfiguring targeted floor plans at the Property to add bedroom(s) and create a more efficient layout.  This strategy has already proved accretive to returns.