Location: Bakersfield, CA
Property Type: Multifamily
Number of Units: 128
Acquisition Date: July 28th, 2011
Status: Sold by Gelt, Inc on August 14th, 2015
Gelt purchased Villa Sienna Apartments in Bakersfield, CA from the Bascom Group on July 28th, 2011. Gelt acquired the property for $11,600,000 with a $9,276,000 Fannie Mae loan at a 5.20% fixed interest rate for ten years amortized over thirty years from DUS lender Wells Fargo. A total of $2,800,000 was raised as equity. The property, which was built in 1986, consists of 128 units, 17 buildings, and one clubhouse. Located right by the 178 freeway and the highly populated Fairfax Road, Villa Sienna boasts a desirable location for drive by traffic, entertainment, and dining options for residents. Gelt believed that by acquiring the property with historically low interest rates, fixing the lengthy list of deferred maintenance items, and maintaining high levels of occupancy, Villa Sienna would appreciate significantly over the hold period, while providing substantial cash flow to Gelt?s investors. In addition, Gelt saw a great opportunity to add a property that could exist synergistically with Vernon Vista, a property in close proximity that at that time was Gelt owned.
Upon takeover, Gelt collected several bids from contractors to address the numerous deferred maintenance issues, as well as projects to improve the property?s appearance, offerings, and amenities. Below is a list of the improvements completed at Villa Sienna:
- Replaced the tennis court with a cutting edge Versacourt product that includes basketball, tennis, volleyball, and badminton.
- Reclassified common area utility meter
- Replaced inefficient pond pumping system
- Created Corporate and Furnished units
- Removed bird netting and patio overhangs that had an inconsistent look all over property
- Cleaned up water features, removing Koi and algae
- Resurfaced driveways
- Created and installed new permanent signage
- Repaired damaged wood siding on garages and exterior of buildings
- Created a dog park?
- Installed TV/video in the gym
- Repaired failing and wood-rotted balconies
- Installed a security camera system
In addition to all the physical improvements, Gelt produced new marketing collateral and initiated a marketing campaign to benefit local charitable organizations. The rents were raised in line with market levels and our new management team was able to reduce operational expenses, renegotiate service contracts, and generate additional revenue through the implementation of a month-to-month program and by leasing laundry equipment to residents,
Villa Sienna was sold for $13,550,000 on August 14th, 2015, producing a 52% cumulative return for investors in just over 4 years.