Warmington Properties, Inc., (WPI) recently closed escrow on Mountain Run Apartments, a 113-unit apartment project located in Orem, Utah. Considered a true value-add opportunity, this most recent acquisition extends our reach into the Salt Lake City metro submarket, which is enjoying significant economic and population growth due to its business-friendly environment, ease of travel, significant lifestyle amenities, and the growing tech industry on the “Silicon Slope.” For these reasons, we anticipate Mountain Run to be the first acquisition of our Utah portfolio.
To secure financing on Mountain Run Apartments, WPI raised nearly $8 million in equity through our Family and Friends investor group, who invest alongside and under the same terms as the privately-held Warmington group of companies.
With largely original interiors, Warmington has the opportunity to upgrade 92% of the units at Mountain Run Apartments with proven rent increases for renovated units. Currently 8% of the units have been renovated and are achieving an impressive rent premium over in-place rents. Upon completion of capital improvements in 2020, we are projecting a cash-on-cash return of 6.9%, quickly growing to an average of 7.7% thereafter. This is a true long- term hold, with no disposition date planned.
In addition to the opportunity to renovate units, Mountain Run is in a superior location within the market. Located directly across from Utah Valley University, Utah’s largest public university with 37,000 students and less than two miles from University Place, a 112-acre lifestyle center offering shopping, restaurants, a concert venue and entertainment, Mountain Run attracts both students and area residents alike.
Mountain Run Apartments is one of three multifamily projects completed or purchased by WPI this year. Other 2018 acquisitions include Rise Apartments, a 112- unit ground up development apartment project located in Las Vegas, Nevada; and Arista Apartment Homes, a 220-unit ground up development, also in Las Vegas, Nevada. PRISMA, an existing student housing community near San Diego State University, is currently in escrow. Financing for each of these acquisitions was also secured through Warmington’s Friends and Family network of investors.
With the addition of Mountain Run Apartments in Utah, Warmington’s multifamily portfolio includes properties in three states, Utah, California and Nevada. See them all here. (warmingtonpropertiesinc.com/apartments)
WPI’s core objective is to create wealth through the acquisition of quality assets that generate long-term, stable yields. Building on this basic approach, as well as the construction capacity of Warmington affiliates, we frequently examine ground-up developments and value-add opportunities for older properties. This ability to consider the full spectrum of real estate investments means that we are well placed to scrutinize opportunities for enhanced yield without compromising our core long-term growth objectives.
For more information about any of these acquisitions or our Friends and Family Network, contact Sean Ettlin. firstname.lastname@example.org | 949.230.6623.