Clearwater Santa Ana

Acquisition of an existing 60-unit apartment complex and commercial pad on 6 acres centrally located near jobs and transportation at Grand Avenue and the I-5 FWY in the City of Santa Ana. The Clearwater business plan was to process a General Plan Amendment, Zone Change and Tentative Map for 104, three and four bedroom, 2 and 3 story townhomes.  The 100% leased property, known as the Mauna Loa Apartments, was purchased at a 4.2% CAP.  Clearwater Communities, through a combination of lowering operating expenses, reinvigorating on-site management, and implementing rental policies that matched unit desirability with rental rates, and maximizing market rates at unit turns, were able to increase operating income by 20%, increasing the CAP rate to 6.5%. Although acquired for reinvestment, operational improvements achieved in the first 5 months were so significant, nearly as much value was added through improving operations than combining resources and capital to obtain those entitlements. On a risk-adjusted basis, it made more sense to monetize that value.  The entire deal closed within 10 months of original purchase, earning our investor a 1.65 multiple and an 83% IRR.

 

Project Details

Community Name Clearwater Santa Ana – Mauna Loa
City Santa Ana – California
Unit Sq. Ft 1650 – 1700
Price Range $350,000 to $450,000
Close Out Sold in December 2015
# of Homes 104
Status TBD.

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