Due Diligence update for Walcott. 70% Retention rate on renewals with 4% rent growth

Good news: The Gray Capital team was on site at The Walcott apartments conducting physical and financial due diligence at the property, and we couldn’t be more thrilled to share what we found with you below.

There’s a lot of “uncertainty” in the world right now, but I’ve never been more certain that The Walcott is the perfect multifamily play for the time we’re in.

We do not know what the markets, interest rates, or cap rates, will be next year, but I am highly certain that rents at The Walcott will be significantly higher in 5 years than they are today—and The Walcott will be worth significantly more than what we’re acquiring it for.

It’s a high quality core plus multifamily investment opportunity, and we want to partner with you.

Here are a few highlights from our inspection:

• Units are in excellent shape. No major damage was identified in all 215 apartment units. Some normal wear and tear, but clearly a demographic that generally takes care of their surroundings (great sign).
• The retention rate- at the property for renewals is 70% while growing rents by 4%! – That’s well over the 50% industry benchmark and impressive given that the market is still in the process of absorbing new supply.
• Storage – We are exploring building out additional storage in the parking garage in order to store appliances and other maintenance items (current shop is too small for storage), as well as possible additional rentable storage to increase cash-flow.
• Package management – There is currently not enough space at their package lockers to handle all package volume (not unusual). We are exploring utilizing an unused office to handle the overflow.
• Balconies – Several balconies showed signs of minor water intrusion and damage. Contractors have been scheduled to conduct a follow-up inspection in order to quote repair costs (we aren’t doing our job if we don’t find something!). We’ll keep you updated.
• Premium Unit Upgrades – We are more bullish now than ever on the success of our planned Premium Unit upgrades to further drive rents at The Walcott. Through discussions with the current onsite team, residents, and digging deeper into demographics at the property and some select floor plans, there is clearly demand for premium units with a great view in larger select units—and we will be targeting $150/m premiums for these upgrades after new countertops, plumbing hardware, and cabinet hardware for ~$5,000/unit. 
• Unrivaled location—Being on site made it clear – There is no better-located apartment community in Jeffersonville. The walkability is unmatched, with coffee shops, restaurants, and shopping immediately adjacent to the property. The Walcott will always be able to demand a premium due to its location.
• Environmental Phase I report came back with the all clear – No need for a Phase II and radon test came back requiring no mitigation. 

The Walcott is now open for investment with due diligence materials and partnership documents ready for review and execution on the Gray Capital Portal. .

To discuss your investing goals and learn how The Walcott could be an excellent diversifier in your portfolio, schedule a meeting with the Gray Capital team today. 

Accredited investors only. Always conduct your due diligence. Returns are never guaranteed.