01 / 01 / 2011
n January 2011 San Miguel Management was engaged to conduct operational due diligence on four multi-family assets in Jacksonville, Florida consisting of 1,239 units. These established communities were a mix of Class B and C properties. After a successful 60 day close in March, San Miguel assumed responsibility for the property management on all four assets. The scope of operational, maintenance and rehabilitation work identified during due diligence was implemented from day one.
As part of the operational game plan, San Miguel proposed altering the tenant mix of the properties to more creditworthy clientele. We realized this would take time but felt it would be offset long term with a reduction in bad debt and tenant defaults, an improvement of the branding of the assets and eventually a stable occupancy. At closing, the four assets averaged an occupancy 40%; today, a year into control, they average 72%. Revenue is ahead of target by 18% and NOI is exceeding budget by 31%.
In addition to day-to-day management of the communities, San Miguel Management assumed responsibility for the multi-million dollar rehabilitation. With only 40% of the units occupied, the remaining units were either vacant or in “down” status requiring various levels of remediation. San Miguel identified 160 apartments where our staff was able to perform make-readies to provide immediate leasing inventory. San Miguel’s involvement in the rehabilitation contributed to extensive rehab savings for the property ownership and facilitated immediate availability.
Subsequently, two additional assets were added in Florida in December 2011 bringing the total units under management in Jacksonville to 1,845. Once again, San Miguel Management performed the due diligence which allowed for a quick close, an implementable action plan from the first day and a smooth management transition.
As desired, the resident demographics have changed and the properties are realizing a more stable tenant base. Today, the assets have significantly improved collections and traffic exceeds that of any competitor. Occupancy for the overall portfolio now resides over 90% with individual occupancy increases between 9-29% in the last year, revenues and NOI averaging 13% over initial targets, and effective rents increased by as much as .08 cents per square foot in the last year. Since the time of our takeover these assests have seen remarkable occupancy increases between 8.9-63.52% under San Miguel Management.