Total number of units: 200
Total square feet: 184,441 Net Rentable SF
301 North Greenville Avenue
Allen, Texas 75002
Cottonwood Creek Apartments (renamed 301 Greenville) is a 200-unit, Class B value-add opportunity in an “A” location. It is a two-story, garden-style community originally built in 1984. It is adjacent to the Allen High School campus and across the street from the Allen Freshman Center. All unit interiors were essentially untouched over the seller’s ownership period. At acquisition, the property was 96% occupied and offered tremendous potential for rental rate growth through an extensive interior value-add program and raising current rents to current market rates.
Panther and Knightvest purchased the Cottonwood Creek Apartments on July 25, 2018, for an all-in price of $116,000 per unit. The Property had been owned for about 20+ years by two individuals, one lawyer and one physician. There was tremendous upside in management and operations at Cottonwood Creek. The previous owners had operated with an occupancy driven mentality, meaning, keep occupancy high without raising rents. Water and other utilities were not billed back to residents offering an additional income source. The property required deferred maintenance to be addressed including wood replacement, paint, lighting, pool furniture and slight repairs to pool tile and fencing, landscaping, and signage. There were plans for the addition of a new Clubhouse/Leasing Office to be located at the front entrance of the property on Greenville Avenue which was completed in early 2021. The existing office was converted into a fitness center as planned.
The original strategy called for the largest per unit capital improvement plan ($23,573 per unit) in the history of the Panther portfolio. Over the course of the 2.66 year holding period, Knightvest upgraded 124 units, or 62% of total units to its highest-level Quartz upgrade program. During this period, the property consistently ranked number one within the Knightvest portfolio for upgrade premiums, regularly surpassing $300 per unit or 30%. On March 25, 2020, we refinanced the property and were able to catch up accrued, unpaid preferred return balances while also returning approximately 20% of original capital. With the proceeds from the new loan, we were able to build a new Leasing Office along Greenville Avenue which substantially enhanced the curb appeal (and leasing traffic) of the property.
EXECUTION AND SALE
301 Greenville was marketed for sale in March 2021 and received a pre-emptive offer.Due to the fact that the marketing process had not been concluded, Knightvest and Panther countered at $33M ($165,000 per door) with 2% required earnest monies, of which $330,000 was non-refundable, and the remaining $330,000 became non-refundable upon the expiration of the 30-day due diligence period.
This sale exceeded our pro-forma projections providing a 1.69 multiple to Panther FW Investors and an annual average return on investment of 25.00% over the 2.66 year holding period.