Identification – Waterford utilized a relationship with a local investment sales broker to acquire a 13 unit apartment project off-market in the Alamitos Beach submarket of Long Beach.  

Evaluation – Waterford utilized its strong market knowledge to underwrite the opportunity quickly and realize the apartments were clearly under market from a rent standpoint if the project was re-positioned to attract millennial tenants.  

Business Plan – Waterford felt the project could be re-positioned by bringing the current units at the project up to today’s Class A standards while activating the common areas of the projects as much as possible.  The units had not been touched since the project was originally developed in the mid-’60s and was in need of major rehab work.

Capitalization – Waterford partnered with a syndicate of high net worth investors to acquire the project within 60 days of going under contract.  

Asset Management – Waterford hired a best-in-class general contractor along with a local design firm to reposition the asset as a B+ to A- apartment project for tenants seeking a new unit in the coastal area.  Waterford was able to attract Millennial tenants who wanted a Class A environment but wanted to pay a slight discount in rent while not sacrificing quality.    

Stabilization – Waterford rehabbed the project in 18 months and stabilized it to a 6.5% yield on cost. Waterford sold the investment in 2017 and the investment generated a 26.35% project-level IRR along with a 1.54X equity multiple.