9530 3rd Bay Street

9530 3rd Bay Street is a 12 unit apartment complex located in Norfolk, Virginia. In 2018, this Project was purchased as part of an 108 unit split site portfolio consisting of 5 separate property development sites, including Hillside North Apartments, Hillside South Apartments, and 2707-9 Azalea Garden Road (see above and below). The entire property portfolio was purchased for approximately $3,950,000 through a combination of debt financing together with approximately $150,000 from a syndicate of 5 private equity investors for this particular property. The “as-is” appraisal at the time of purchase was $5,500,000. The main “value add” strategy employed in this Project has been renovating the interior quality of units, upgrading or replacing major infrastructure items like the roof and raising renovated unit rents to market value. This Project was recently refinanced to allow the partners to recover most of their invested capital while retaining their equity ownership. Unlike the Hillside North and Hillside South Projects, this building was repositioned to mimic more upscale assets in the area. Capital improvements included a new roof, windows, stacked stone accents, vinyl siding, and rebuilding of the exterior wooden stairs, soft close cabinets, granite countertops, stainless steel appliances, and added dishwasher and microwave that were not present previously. The monthly rents at this building averaged $700 per unit at the time of acquisition. Currently this Project is 100% occupied and the average rent per unit is now $1,100 per month. Notwithstanding, investor interests in this project are restricted, illiquid and may not be readily sold now or in the foreseeable future.

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