RADCO Plans Turnaround for Atlanta Multifamily Portfolio

 (Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)

ATLANTA—RADCO just snapped up a 402-unit multifamily portfolio in Georgia. The turnaround specialist was no stranger to the multifamily assets. RADCO was the asset manager for the apartment properties on behalf of an equity fund for five years.

The properties include the 112-unit Ashford Place Apartments in Griffin, GA; Briar Creek Apartments, a 160-unit complex in Conyers, GA; and the 130-unit Sierra Place Apartments in Atlanta. RADCO snapped up the multifamily portfolio for $13.7 million. The transaction included the multifamily acquisition of the equity and a restructure of the existing debt.

“We knew the deals and understood their issues and immediate potential,” Norman Radow, CEO of RADCO, tells GlobeSt.com. “We saw rents increasing in two of the submarkets already, and the financing made the properties more attractive.”

As commercial mortgages mature, Radow says the value of the underlying collateral is being tested. RADCO has built a reputation for making underperforming and undervalued deals work. The company has plan in place to manage the turnaround and create immediate value for each of these assets.

Occupancy rates at all three multifamily complexes are stable, with Sierra Place and Ashford Place averaging 95% and 94% tenancy, respectively. Briar Creek has 10 to 15 down units, which RADCO will restore and market.

Radow sees the most challenging aspect of maximizing the potential of the multifamily portfolio as where to spend precious cap ex dollars to provide the vest living experience for our residents and the highest return for investors. With that in mind, RADCO’s plan includes nearly $1 million in capital improvements over the next six to 12 months. The improvements will include enhanced and expanded amenities such as safety improvements, multifamily unit upgrades, and the installation of utility efficiency devices.

“There is a general bias towards renting, but at the same time, without a robust economy, tenants may soon be strapped and less able to pay higher rents, even with improved services and a better living experience,” Radow says. “The challenge as a thoughtful developer is to buy at a low enough basis now so we can balance these conflicting tensions until the economy recovers.”