Property to be re-named Marina’s Edge and will undergo nearly $4 million renovation

Sparks, NV, October 20, 2016 – A partnership between L5 Investments and Alamo Equities has acquired Marina Gardens Apartments, a 200-unit apartment community, for $14.25 million in Sparks, NV. The property is situated on 11.78 acres and is located at 550 Howard Drive. The partnership is planning to add value to the property by investing nearly $4 million for needed updates and upgrades in order to better meet the demand of local renters. It will also be re-branded and re-named Marina’s Edge within the next few months.

Built in 1973, Marina Gardens is a garden-style, pet-friendly community featuring 31 two-story buildings comprised of a total of 60 one-bedroom units, 100 two-bedroom units, and 40 three-bedroom units that include private balconies or patios, walk-in closets, and full kitchens. On-site amenities include three laundry rooms, barbeque areas, two playgrounds, and approximately 278 parking spaces.

The property is less than one-half mile north of Interstate 80 and is one block from Sparks Marina Park, which includes a 77-acre lake and a number of recreational activities. The community is also easily accessible to the Tahoe Reno Industrial Center, a 107,000-acre park with a 30,000-acre industrial complex that is under phased development. It is slated to be the world’s largest manufacturing industrial park and is creating tremendous job growth for the Reno-Sparks market – upwards of 50,000 jobs could be created by 2017. 

“Marina Gardens is a perfect fit for L5’s value-add investment strategy,” said Michael Flaherty, founder and CEO of L5 Investments, a Northern California-based multifamily investment firm. “It is well-located in an explosive growth job market and provides us with the opportunity to add significant value by improving overall management; resolving significant deferred maintenance issues; and adding features and amenities that will attract renters seeking a quality rental living environment.  We hope to continue to add similar, multifamily assets in Reno to our portfolio.”

The new ownership plans on implementing upgrades to all 200 units that will include in-unit washer and dryers; upgrades to landscaping; and introducing new branding and signage. Additionally, the property will be professionally managed by FPI, one of the largest property management companies in the nation. FPI also has a strong track record and presence in the greater Reno area.

"Putting all the incredible and exciting market fundamentals aside, we just really liked the Sparks Marina location,” said Jeremy Cline, president and co-founder of Alamo Equities, a Bay Area investment firm. “So no matter what happens with the local economy, we think there will always be a strong demand to live in a cool, edgy apartment community that will provide beach cruisers and paddle boards to its tenants."

Sparks is located in the northwest portion of the state, east of Reno and about six miles from the Reno Airport.

​The Reno-Sparks region has been rapidly growing as large companies, including Tesla, Amazon, Apple, and SuperNAP choose bring operations to the market. These businesses are spurring a wave of new businesses centered in technology, distribution, warehousing, and manufacturing. Tesla is currently underway with construction of its “gigafactory,” a 5.8 million-square-foot battery manufacturing facility considered to be the second largest building by volume in the world. Additionally, SuperNAP has made Reno-Sparks its new home and is constructing a $1 billion, 3 million-square-foot campus which is slated to be the world’s largest data center of its kind.

Laura Cathlina of Berkadia arranged the debt on behalf of the ownership. Kenneth Blomsterberg of Marcus & Millichap brokered the transaction on behalf of both the buyer and the out of state sellers, RAF, LLC and BDS, LLC, that owned the property since 2001.

About L5 Investments
Founded in 2009, L5 Real Estate Investments, LLC (DBA L5 Investments) is a privately held investment firm focused on value-add, income-producing multifamily properties in emerging U.S. markets. The firm currently has in excess of $165 million of assets under management in seven states. The company targets opportunities that provide high-yield, passive cash flow and long-term capital appreciation for its investors through strategic acquisition, renovation, and superior asset management.  With over 50 years of real estate experience, L5 and its partners continue to capitalize on opportunities to own multifamily properties in premier locations. These properties generate attractive short-term income and long-term wealth potential.  L5’s success and reputation has been built on its track record, conservatism, passion, attention to detail and the belief that trust starts and ends with honesty and integrity.  L5 is based in the Sacramento area.  www.L5invest.com.

SAN DIEGO—There is a significant difference between what a new apartment project costs to build or buy today and the pricing on 1970s and 1980s vintage projects, which can typically be acquired for well below replacement costs, Pathfinder Partners LLC’s senior managing director Lorne Polger tells GlobeSt.com. As we recently reported, the San Diego-based firm specializing in opportunistic real estate investments has acquired two Phoenix-area multifamily communities totaling 300 units for a combined total of $34.1 million. Polger said the acquisitions, both build in the 1980s, represent value-add opportunities, with room for rent growth.
We spoke exclusively with Polger about the apartment-building boom of the ’70s and ’80s, the appeal of those value-add multifamily properties and what to look for when acquiring these types of communities.

GlobeSt.com: A number of multifamily properties were built in the ’70s and ’80s. Why are these an attractive investment now?
Polger: There is a significant disconnect on the price that a new apartment costs today to build (typically in the range of $250,000 per door or more given the rapid increase in construction, land and entitlement costs) or buy (even higher, once stabilized) and the pricing for 1970s and 1980s vintage projects, which can typically be acquired for well below replacement cost. Given the high cost to build new product, the corresponding rental rates are also significantly higher (in some cases, double or even triple those being charged for older product). Our current investment thesis is that as a direct result of this dichotomy, there is much more room for measurable rent growth with the older properties, especially after they are improved and modern amenities are added. More rent growth equals a greater return on our investments.

GlobeSt.com: What do you look for when acquiring these types of properties?
Polger: The properties need to have good bones and be well located in strong submarkets. By the term “good bones,” I mean that they need to have solid physical fundamentals, good floor plans and unit mixes, right sized units and common areas that are easily adaptable to change and enhancement. We have developed templates for our improvements to unit interiors and common areas, and the properties need to match up with those templates. As to submarkets, we get very granular with how we look at properties. If the submarket is not trending positively with economic growth, urbanization and walkability (i.e., things that will attract tenants over the long term), then it’s not something we will chase.

GlobeSt.com: Are there any markets that have a surplus of these types of properties and any markets that are especially attractive?
Polger: These types of properties are found in all of the markets that we have been active in over the last few years: San Diego, Los Angeles, Seattle, Portland, Phoenix, Denver and Las Vegas. Markets like Phoenix have been more heavily traded through the cycle, while markets like San Diego have been thinly traded. But because there was an apartment-building boom throughout the West during those years, all those markets have product that fits the criteria. The challenge has been to be a prudent, patient buyer and pick the right projects at the right prices.

GlobeSt.com: In this era of high-rise, luxury towers, how do the older apartments fill a void and how can they compete?
Polger: Traditional garden-style apartments are less dense and often have a more spacious feel, with mature landscaping and open gathering areas. There is a demographic of tenant, including families and older renters, that appreciate this type of community over the more modern, dense luxury tower—and with rents soaring, they provide an affordable alternative.

GlobeSt.com: How do you add value to these properties?
Polger: We have used a dual-prong approach to value-add renovations, both focused on areas where people gather in their units and in the project common areas. In the kitchens, we have typically added quartz countertops, stainless-steel appliances, glass-tile backsplashes, modern sinks and tap sets and enhanced lighting. At times we will do a full cabinet replacement; at times, we will only replace the cabinet doors and sometimes just the cabinet pulls. We have done similar enhancements to bathroom areas and have generally added hard-surface flooring in the living rooms and kitchens. We generally work with different architects and interior designers to come up with a palette that is customized depending on the city that we are working in. As to common areas, it’s all about adding and enhancing gathering places.  That can include dog parks, better gyms and pool areas, coffee bars and community kitchenettes, business centers and clubhouses.
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What’s driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.

Carrie Rossenfeld › Carrie Rossenfeld is a reporter for the West Coast region of GlobeSt.com and Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.

Seattle, WA, October 19, 2016 – A partnership between L5 Investments, a Northern California-based multifamily investment firm, and Seattle-based Shuler Architecture, has acquired The Columbian Apartments for $5.82 million in Seattle, WA. The 40-unit property is located in Beacon Hill, an emerging neighborhood in the south central park area, less than three miles from downtown Seattle. The partnership is planning to add value to the property by modernizing both unit interiors and exterior areas in order to better meet the demand of local renters.

Built in 1965 and located at 1410 to 1414 S. Columbian Way, The Columbian is a community consisting entirely of large two-bedroom apartments. The units feature walk-in closets, private patios and views of the Olympic Peninsula. The property is well located, with excellent access to mass transit (the metro bus stop is in front of the property, and light rail is just minutes away) and is a short walk to Jefferson Park and the Jefferson Park Golf Course.

“The Columbian presented us with an ideal opportunity to take a well-located apartment community with significant maintenance and management issues and transform it into a coveted place to live,” said Michael Flaherty, founder and CEO of L5 Investments. “As the Seattle residential market tightens and job growth continues to strengthen, we firmly believe that once repositioned, this property will meet the desires of area renters seeking a high-quality apartment community.”

The partnership is planning on investing approximately $1.4 million to improve and modernize the property which includes a contemporary makeover of the leasing office and common areas. The unit interiors will be renovated with new appliances and finishes as well as the addition of a washer and dryer in each apartment.

Beacon Hill is one of Seattle’s oldest neighborhoods with home prices that have been rapidly appreciating in recent years. The neighborhood sits on a high ridge overlooking Seattle and Elliot Bay. Residents enjoy all the benefits of an urban setting with easy access to the 5 and 90 Interstates, an array of retail and dining options, and nearby employment centers.

Paul Harbor and Grandbridge Real Estate Capital arranged the debt on behalf of L5 and Shuler. Jason Elrod of EHI Real Estate Advisors brokered the transaction on behalf of both the buyer and the seller, a private investor.

​In June 2016, L5 Investments and Shuler Architecture acquired Innsbruck Apartments, a fully-occupied, 31-unit multifamily community in SeaTac, WA for $2.6 million. 
 
 
About L5 Investments
Founded in 2009, L5 Real Estate Investments, LLC (DBA L5 Investments) is a privately held investment firm focused on value-add, income-producing multifamily properties in emerging U.S. markets. The firm currently has in excess of $165 million of assets under management in seven states. The company targets opportunities that provide high-yield, passive cash flow and long-term capital appreciation for its investors through strategic acquisition, renovation, and superior asset management.  With over 50 years of real estate experience, L5 and its partners continue to capitalize on opportunities to own multifamily properties in premier locations. These properties generate attractive short-term income and long-term wealth potential.  L5’s success and reputation has been built on its track record, conservatism, passion, attention to detail and the belief that trust starts and ends with honesty and integrity.  L5 is based in the Sacramento area.  www.L5invest.com.