IRVINE, CA-Real Estate Partners Inc. plans to spend $30 million to $35 million to renovate 2,500 units of its apartment holdings in Texas, Louisiana and Arizona. The company says that the improvements will enable it to boost rents by up to 20%.
The renovation program will include both interior and exterior improvements, according to Tom Thompson, president of Real Estate Partners. The renovation plans will vary by property and need, but in general the interior improvements will include features like upgraded kitchens with new appliances and countertop surfaces, new carpeting and hard surface flooring, new bathroom finishes and fixtures and new window coverings.
On the exteriors, the company is planning upgrades to "enhance curb appeal" to attract new renters and to create a resort-style environment, Thompson says. The overall renovation program is a key element of the company's investment strategy, which targets undervalued, under-performing properties.
Thompson explains that the company focuses on desirable neighborhoods that show strong economic growth and rising home prices and interest rates. Such factors drive would-be buyers from the lower end of the housing market away from purchasing and into renting better quality apartments, the Real Estate Partners president points out.
The renovations, already under way, are expected to be completed in the various properties this year and next year. The 2,500 units that will be renovated are part of a Real Estate Partners multifamily portfolio of approximately 5,500 units.
The company's holdings also include 500,000 sf of commercial property. The firm also holds a majority interest in Real Estate Partners Asset Management Services Inc. and REP Commercial Inc., a brokerage firm.
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