The dynamic value-add executive team of Jim and Theresa Lippert have seen a lot of strange buy-side requirements since founding C.R.E.S. Management 15 years ago in Kansas City, Mo., but rarely have they been required to report for a sit-down interview in front of a panel of sellers. Yet that’s exactly what happened when C.R.E.S. moved to acquire Quality Hill Apartments and Condominiums, a 382-unit property across 20 buildings—11 of them historical—plus a YMCA fitness center, all of which stretched across four city blocks in one of Kansas City’s original residential neighborhoods.
Location: Kansas City, Mo.
Developer: C.R.E.S. Management
Builder: CM Construction
Architect: Gastinger, Walker, Harden Architects
Opened: May 2008
No. of Units: 382
Unit Mix: One- and two-bedroom apartments and condos
Prices: $900 to $1,495 per month (rental); $140,000 to $274,000 (condo)
“We planned to upgrade the apartments and condominiums to 21st century levels, and the ownership group was rightfully concerned with the historical buildings,” Theresa recalls of the interview, which included meetings with representatives from the Hallmark Foundation. “The downtown is facing a lot of development, and as a whole, we wanted to make sure our goals coincided with the growth that the city has accomplished in the last year as well.”
As a result, C.R.E.S. adopted a three-tiered strategy to the renovations tailored to a wide variety of resident demographics. About two-fifths of the units were simply brought to make-ready levels; another two-fifths received a mid-range facelift that included cabinet and appliance upgrades; and the remaining one-fifth of the apartments and condos (including units in the historic and iconic Coates House) benefitted from high-end overhauls that resulted in elements such as granite and slate flooring, stainless steel appliances, and completely remodeled bathrooms. Exterior refurbishing of all the buildings included new roofs, decks, paint, and landscaping, as well as renovation of the community swimming pool.
Total renovation costs at Quality Hill were contained to a budget-friendly $6 per exterior square foot and $16 per interior square foot while still maintaining the integrity of the site’s historical assets. Occupancy as of September 2009 is 95 percent, with the first of two phases of condos sold out and sales for the second and final phase to commence this fall. “We came in with a vision of bringing the community up to today’s standards and make an improvement to a four-block area right in the heart of downtown,” Lippert says. “Positively impacting a submarket by changing your own footprint and making a difference in the neighborhood is not easy. It takes persistence—staying on it every day and not wavering from the goal has made it happen for us.”