The EpiCity team achieved 100 percent occupancy in less than a year after making minor improvements and pinpointing the need for a change in apartment building management.
As a sophisticated Atlanta real estate investor, the lender on a 129 unit midtown apartment building and an adjacent bar was weighing his options. With significant debt, including a $9 million mortgage and several other private loans against it, the property was simply not producing the revenue it needed to be.
The lender, mere steps from foreclosure in June of 2010, partnered with EpiCity to see what, if anything, could be done.
The EpiCity team quickly got to work determining what was causing the trouble. The property, centrally located in midtown Atlanta, should have been a hot spot for young people looking for affordable housing in the area. However, the 40 percent occupancy rate indicated that something was amiss.
Upon inspection, the EpiCity team saw immediately that there was a management issue. The property was unkempt; its shabby condition clearly scaring off potential renters. As it happened, the manager was a family member of the borrower. Older and less interested in and capable of the work, he had been unwilling to commit the time and energy required to maintain the property.
EpiCity identified the issue and helped the owner understand why the property was underperforming. Such situations, according to Tom Stokes of EpiCity, are quite common. When property is mismanaged, there are often many factors involved. It can be difficult for owners and lenders to clearly see what is happening, especially when family and friends are involved. EpiCity brings an objective perspective and can address these problems with diplomacy and professionalism.
The team at EpiCity began making improvements, cleaning the property, making repairs and creating a safe, welcoming atmosphere. In less than a year, the property achieved 100 percent occupancy and began producing a cash flow. Though still over leveraged, the asset is now performing to the best of its ability.
This project shows how EpiCity can pinpoint simple solutions that have powerful impacts. By partnering with EpiCity, the lender identified the source of the troubles he had been incurring, proving that even the most sophisticated investors benefit from outside expertise.