Capri Apartments – Serving UC Santa Barbara Students

Isla Vista - California

Student Housing Project, Capri Isla Vista 53 Units
Student Housing Major Rehab & Reposition - 53 Units & 163 Beds

Purchase Price:

$11,000,000

Terms:

$7,700,000 loan assumption for the project. Equity of $3,300,000 required to purchase the property.

Date of Purchase:

August 2007

Additional Capital Invested:

$1,000,000 in Capital Expenditure.

Approximate Value (April 2009):

$15,400,000

Going In NOI:

$500,000

Current NOI (2008-2009 School Year):

$925,000

Cash Return on Equity:

11.5%

Deal:

Reposition a property ideally located in beautiful Isla Vista, California.  This beachside community is bound the University of California – Santa Barbara, the Pacific Ocean, and Wetlands.  With no room to expand outward, and extremely restrictive building policy, Isla Vista (IV) is the 2^nd most densely populated area in the nation (behind Manhattan).  Primarily serving Students of UCSB the community is made up of older buildings, showing their age with very few ‘quality student housing’ options for students.  MHE & its construction partner MJW Investements saw an opportunity to completely rehab and restore the 53 unit portfolio.  The rehab took 3 summer months and included complete interior remodels (granite kitchens, dishwashers, new appliances, wood look floors, new carpet and designer paint).  MHE also completely furnished the units.  The numbers and demand speak for themselves.  All tenants are on 12 month leases.

Capri Apartments – Eugene Oregon (Adjacent to the University of Oregon)

Student Housing - Eugene, Oregon

Student Housing Project, Eugene OR (Univ. of Oregon) 136 Units, 450 beds
Rehab to Luxury Student Housing

Purchase Price:

$13,000,000

Terms:

$14,800,000 new loan for the project. Equity going in of $6,000,000 required to close the property and approximately $5,800,000 in Cap-Ex / Deferred Maintenance and earn out funding.

Date of Purchase:

February 2007

Cap Ex:

Deferred Maintenance:

$3,000,000

$2,000,000

Projected Value (April 2009):

$22,000,000

Total Cash Investment:

$4,500,000

Going In NOI:

Current NOI:

$960,000

$1,650,000

Project Annual Return on Cash Invested:

16%

Deal:

Acquire and completely rehab a very well located portfolio of 7 properties, adjacent to the University of Oregon.  The portfolio is made up of older and fairly dilapidated / antiquated properties, all of which required significant Capital Injections to correct years of deferred maintenance including immediate structural / life safety repairs.  MHE and construction partner MJW Investments also completely rehabbed the unit interiors creating a best in class / best in market quality asset in irreplaceable locations directly across the street form the University.  MHE also converted a SFR to a clubhouse for residents, an amenity that is unmatched in this location.  The numbers speak for themselves.

Trojan Palms - USC Student Housing Project

USC - Los Angeles, California

Student Housing Project, USC - Los Angeles California 36 Units
Converted to Student Housing - 30 Units & 69 Beds

Purchase Price:

$5,500,000

Terms:

$6,000,000 new loan for the project. Equity of $1,600,000 required to purchase the property and finance the rehabilitation.

Date of Purchase:

April 2006

Additional Capital Invested:

$1,250,000 in Capital Expenditure, $200,000 in interest carry.

Current Market Value (April 2009):

$9,500,000

Total Cash Investment:

$2,050,000

Profit including Cash Flow:

$2,825,000

Cash Flow on Cash Invested:

12%

Date of Purchase:

April 2006, refinanced Oct. 2007

Deal:

Reposition a well located asset with blocks of the USC campus. The rent control building was completely 'gutted' with new plumbing, new electrical, new paint, new interiors, new paving, new security gating and intercom, new windows and A/C units in every bedroom. The kitchen remodels included brand new appliances, cabinets, tile floors and granite countertops. The property was leased 'by the bed' to new tenants and is 100% leased for the 2007/2008, 2008/2009 school year. It also has partially pre-leased (as of April 2009) for the 2009/2010 school year. The property offers students & parents the highest quality living available to USC students, providing modern kitchens and bathrooms and a safe, secure and relaxed living environment. Active management and a knowledge for what students and parents desire in living spaces helped make this project and outstanding success. The property is a true "Urban Oasis." 100% occupied by students.

Gateway Shopping Center

100,000 s.f. Commercial Shopping Center

Purchase Price

$15,000,000

Terms:

$3,000,000 cash to 80% financing with the Lender loaning

Date of Purchase:

September 2004

Annual Return:

7-9%

Deal:

The center is located in downtown Palmdale, CA, adjacent to commercial development and surrounded by 30,000 homes in a five mile radius. The center is uniquely positioned for the Latin American population with Vallarta Markets as the anchor and 50,000 s.f. of low cost/high volume retailers. The shopping center sold off several pads to national tenants including La Petite Academy and Washington Mutual.

Rosemead Apartments - 70 Units

5107, 5109, 5121 Rosemead Blvd. - San Gabriel, CA

Purchase Price (including Rehab Costs):

$4,120,000

Terms:

$800,000 cash to 80% financing with the Lender loaning $300,000 for rehab

Date of Purchase:

August 2000

Selling Price:

$5,620,000

Profit Including Cash Flow:

$1,370,000

Annual Return:

108%

Date of Sale:

Closing March 2002

Length of Ownership:

19 months

Deal:

These buildings had management problems, deferred maintenance and some earthquake damage. Several units were not inhabited for several years. The project required new roofs, paint, gated entries, parking, etc. We brought the income from $550,000 per year to $703,000 in 14 months. These were non-rent control buildings. The acquisition entity was Rosemead Apts., LLC.

Property Notes:

Property consists of three contiguous properties. It has a unit mix of 1, 2 and 3 bedroom units and has covered parking. Built in 1962.

The above numbers may not include transaction costs.

Kittridge Apartments - 72 Units

18317 & 18331 Kittridge St. - Reseda, CA

Purchase Price (including Rehab Costs):

$3,360,000

Terms:

$620,000 cash to 80% financing with the Lender loaning $300,000 for rehab

Date of Purchase:

May 2000

Selling Price:

$4,250,000

Profit Including Cash Flow:

$930,000

Annual Return:

105%

Date of Sale:

October 2001

Length of Ownership:

17 months

Deal:

These buildings were in poor condition and poorly managed. Most of the rehab included paint, roofs, facade, gating, decks, pool, and approximately 20 units were rehabbed. The 1 bedroom rents were raised from $475 to $800 and the 2 bedroom rents were raised from $625 to $1,000. Although this is a rent-controlled building, we brought the annual income from $500,000 to $585,000 in 14 months. The acquisition entity was Kittridge Apts., LLC.

Property Notes:

Two sister 36 unit buildings with pools and gated, covered parking. Built in 1972. Large units. Good unit mix of 1 and 2-bedroom units with 2 singles and two 3-bedroom units.

Fountain Apartments - 57 Units

7717 Ventura Canyon - Van Nuys, CA

Purchase Price (including Rehab Costs):

$2,200,000

Terms:

$450,000 cash to a new loan.

Date of Purchase:

January 2000

Selling Price: