Private Equity Firm
Physical condition assessment
- Three cities in Texas
- Seven multifamily properties totaling 1,510 apartments, with occupancy rates as low as 62 percent
A distressed-debt private equity fund wished to purchase a portfolio of high-coupon, non-performing, tax-exempt Section 501(c)(3) bonds that were secured by several distressed multifamily properties in three major Texas cities. To price the debt acquisition, the buyer needed assurance that the sponsoring non-profit’s proposed capital improvement program would enable the properties to compete and position them for eventual refinancing. The properties were very old, lacked as-built plans or specifications and suffered from high vacancy rates, deferred maintenance, and building code violations.
On-Site Insight performed a thorough physical assessment in a compressed 30-day window, critiqued the sponsor’s proposed capital improvement plan, and value-engineered the plan to achieve a mutually agreeable scope. The new scope would address immediate needs, and then cost-effectively re-establish the properties’ competitive position in the lower-middle income market segment. Our client subsequently acquired the debt with On-Site Insight engaged as the ongoing inspector during the sponsor’s rehab initiative.