Our partners closed on this 152-unit Pittsburgh area property in December 2015. At the time, the property was being operated as a Quality Inn extended stay hotel so, with the exception of a few holdover extended stay tenants, the property was 100% vacant at the time of purchase. On the plus side, we were able to acquire a property with great potential at a terrific price.
During the first quarter of 2016, tremendous progress has been made in all phases of design, renovation and marketing.
Exciting, contemporary designs have been rendered for all interior and exterior common areas that we believe, when construction is complete, will offer amenities and community appeal that are rare in the Pittsburgh market.
Interior renovations have proceeded at a brisk pace. At the end of the 1st Quarter, 144 of the units, or 95%, have been completely converted which is 9 months ahead of our original schedule. These renovations have transformed the tired and dated hotel suites to sleek, modern apartments that appeal to today’s renters. Exterior renovations were started in February when the weather cooperated and are now in full swing. Painting of building exteriors is 75% complete and areas for community pool, outdoor seating and dog park have been prepped for makeover. Renovations to the clubhouse are also underway and will include a new business center, fitness center, doggy salon, computer kiosk and beverage station.
An aggressive marketing plan has been implemented to incorporate rebranding of the property and a multi-channel strategy including online marketing (www.terrainapartments.com), billboard and movie theatre advertising to drive renter traffic. At the end of the first quarter, occupancy was at 13.8% with signed leases for 39% of the units. More impressively, rents achieved have been above initial projections for studio apartments at $795/month versus $725/month as originally forecast and for two bedrooms $1100/month versus a projected $925/month.
We now anticipate all renovations to be complete during the 3rd Quarter of 2016. As common area renovations begin to take shape now in time for peak rental season, the visible improvements can only help in making the property more attractive to potential renters. While there is still work to be done, we are very pleased with the progress of this project on behalf of our investors.
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