Claxton and Pecan Ridge are two Class B-/C+ multifamily townhome-style properties a half-mile apart in Lauren’s County, Georgia. The properties are townhome-style, with great structural integrity – an excellent blank canvas for a value-add transformation strategy to upgrade them to B+ assets with the right potential to meet the aggressive demand in the area. This aggressive demand was proven by the area properties’ 100% occupation rates, with a 2-3 month waiting list – thanks in part to the thriving local economy.
Lauren’s County has diverse economic drivers being strategically located along major interstate and highways connecting the southeast, the largest airport, and the fastest-growing seaport in America. With the expansion of the Panama Canal, Savannah has exploded as a key destination for containers and Lauren’s County has taken advantage of this growth. The area has an unemployment rate that is 32% lower than the national average, and a median income comparable to secondary markets.
Despite the promising conditions, the properties had performed far below their earning potential until our involvement. The owners lacked professional management, with inefficient rent management operations, and poor quality renovation on the units.
Since our purchase, we have introduced new management and maintenance staff, with new operational excellence standards. We have also made significant investments in quality design and unit upgrades, with new and improved amenities for families providing a much nicer and safer place to live. This asset has exceeded underwriting expectations and we’re going to execute on our recapitalization a year ahead of schedule. The property is tracking to achieve an 18% IRR according to projections based on current performance.