Stonecrest at Double Oak Mountain
About this Property
Stonecrest at Double Oak Mountain is a 315-unit, Class B garden-style apartment community located in Birmingham, AL along its “280 Corridor” (the largest employment center in Birmingham). It is an under-managed asset in a very desirable location which Waypoint plans to significantly upgrade and reposition through a $4.3 million capital upgrade program. Waypoint believes there is potential for considerable value appreciation by year three.
- Compelling Basis: The purchase price of $93k/unit represents a discount to estimated replacement cost of 31%, with the overall cost basis of $113k/unit (including reserves to fully upgrade the asset) representing a discount to estimated replacement cost of 16%.
- Significant Value Add Opportunity: The property will be repositioned via a comprehensive capital upgrade of $4.3 million ($13.6k/unit) that includes improvements to the interiors, exteriors and property amenities. Post upgrade Waypoint expects the asset to achieve rents in-line with its competitive set (an estimated $250/unit/month rent increase).
- Proximity to Major New Medical Center: The new 103-acre Grandview Campus development, located approximately 4-miles from the asset, will be anchored by the one million sf Grandview Medical Center (est. completion by fall 2015). The Campus is also expected to add hotel, office and retail space, which upon completion is projected to add an estimated 5,500 new jobs.
- Stable Submarket Dynamics: The East/280 Corridor submarket has historically outperformed the overall Birmingham MSA. As of 2Q2015, the submarket reported occupancy at approximately 95% with rents approximately 12% higher than the MSA average.