Location: Bakersfield, CA
Property Type: Multifamily
Number of Units: 70
Acquisition Date: May 14th, 2010
Status: Sold by Gelt, Inc. on December 12th, 2014
Gelt acquired Bridgemont Terrace apartments, a 70-unit complex located on the corner of Belle Terrace Road and New Stine Road in Bakersfield, CA on May 14th, 2010 for $3,800,000 from the Bascom Group. The property was acquired using a $2,675,000 Fannie Mae loan with a 10-year term and a fixed interest rate amortized over thirty years through DUS lender Wells Fargo. The property, which was built in 1980, consists of 6 buildings on 2.27 acres of land.
Upon acquisition and takeover of the property, Gelt was challenged to deal with a number of delinquent tenants. Additionally, there were some significant deferred maintenance items that had to be addressed. We recognized the strength of the property?s location and its potential upside if we could successfully repair the many deferred maintenance items and reposition the property with superior management. We terminated the former property manager replacing them with GSF Properties.
With a new business plan in hand and a capital improvement budget to address, Gelt commenced construction by removing the wood paneling on the exterior walls that were exposed to the sun and replaced them with a more efficient, less costly to maintain stucco exterior. In addition, the parking lot was repaved and the landscaping was refreshed. We installed new drive-by flags, banners and tenant call-out signs, and rebuilt the monument sign. Below is a list of other capital improvements and additions made to the property:
? Repaired wood fascia walls by resurfacing with stucco
? Replaced rotted wood siding and trim
? Installed slip resistant balcony flooring
? Repaved the parking lot
? Rebuilt monument sign
? Replaced a multitude of original HVAC units
? Painted the exterior of the buildings
? Added additional amenities such as a barbecue area and free Wi-Fi at the pool
? Created and staged a model unit to show perspective residents
? Installed a Security Camera system
In addition to all the physical improvements made to the property, we produced new marketing collateral for a grassroots, direct marketing, and social media campaign targeting the nearby businesses and college campus students. The rents were raised to the market level and with our new management in place, we reduced operational expenses, renegotiated service contracts, and found ways to generate additional revenue streams. We devised a marketing plan to lease the garages, further implemented the property?s use of the RUBS program, and implemented a significant month-to-month premium to encourage tenants to sign long term leases. After having evicted a number of tenants and undergoing extensive work to the property, we finally reached our optimum occupancy. From there onward Bridgemont Terrace commanded above market rents for the immediate area because of its superior location, high quality living experience and attentive management.
The property was sold in December of 2014 for $5,850,000, netting investor a 72% cumulative return for investors over roughly a 55-month hold period.