When the Allen Harrison Company acquired an 86-unit property in Houston two years ago, it gave hefty meaning to the term “value-add rehab” by adding more than double the units to the property.
Jason Espejo and the Houston-based company’s team cobbled together four acres of surrounding land to build 120 additional units into the Seventeen15 Enclave apartment community while renovating the existing stock.
Espejo, president of acquisitions, says the company purchased adjacent parcels to the existing apartment community and started renovating the older units about a year ago.
“In the process, we renovated the 86 units to have, relatively speaking, the same finishes as the newly developed units with granite countertops, new cabinets, new flooring and new lighting,” he says. “Everything in the old phase mirrors the new phase.”
The community was built in the 1980’s and the units featured older formica countertops and particle board cabinets that hadn’t been replaced.
“They had ugly carpet and stale appliances,” Espejo says. “They were original 80’s-looking apartment units.”
About 75 percent of the older units have been rehabbed and the company plans to continue spending about $7,000 per unit to make them as modern as the newer spaces in the community.
“The older community did not have a leasing center and it did not have any common area amenities,” Espejo says. “As part of our renovation and redevelopment, we added a clubhouse, a leasing center and new pool. We also did covered parking and a fitness center.”
The upgrades and new buildings brought occupancy up and is stable with new residents coming in at a “comfortable pace”, Espejo says.
The Allen Harrison Company operates primarily in Texas, but executives are currently seeking opportunities to expand into Georgia, Arizona and Florida with more value-add projects where common areas can be added or fixed and interiors present opportunity for rehabs.
“Landscaping and general curb appeal are also part of our plan,” Espejo says. “We’re looking for a strong rental story. How does this asset and its location stack up against rent comparables?”
Lindsay Machak is an Associate Editor for Multifamily Executive. Connect with her on Twitter @LMachak.