San Antonio, TX

Realized Deal : Villas del Encanto

Sponsored By GVA Management

Risk Profile
Value-Add
Amount Invested
$2,451,000
Targeted IRR
22.2%
Actual IRR*
10.1%
Targeted Equity Multiple
1.8x
Actual Equity Multiple*
1.22x
Targeted Hold Period
3.0 years
Actual Hold Period
2.1 years

In October 2018, GVA Management (“GVA”) launched an offering for a 334-unit, 173,000 square foot, Class B multifamily apartment complex located in the growing market of San Antonio, Texas.

GVA planned to implement new management, which would help reduce costs and increase net operating income, and to implement interior renovations totaling $5,000 per unit to bring them in line with market comparables. GVA projected the renovations could increase rents by an average of $115 per unit and that occupancy would increase to 95% upon stabilization.

Project Timeline

Repositioning In Progress

June 2019

By Q2 2019, GVA had rebranded the property to “Aspire” and was continuing the repositioning process by completing exterior upgrades as well as designer unit renovations. In-place rents had grown 10% since acquisition and were 4% above original pro forma.

Refinancing

June 2020

At the end of June 2020, GVA completed the refinancing of the property and distributed a portion of the net proceeds back to investors, while withholding a certain percentage for reserves and future capital needs. Although by end of Q4 2019 performance had deteriorated and occupancy had declined to 83%, over the first half of 2020 occupancy steadily climbed to 96% and by end of Q2 2020 GVA had renovated 242 units to either partial or full renovation scope.

Investor Buyout

December 2020

GVA received an unsolicited offer to buy out investor interests in the property. Considering the financial effect of the pandemic on the property’s tenant base, their ability to pay, the continued moratorium on evictions, as well as the recent refinancing, GVA believed the remaining upside was limited and decided it was in the best interest of investors to accept the buyout offer.

Final Outcome

After an approximate two-year hold, GVA exercised discretion as the sponsor and decided to deviate from the original business plan. It accepted an unsolicited offer to buy out investor interests in the property, achieving positive, albeit lower-than-projected returns for investors.

*Net of fees

This report contains explanations of a series of events associated with GVA Management’s Villas del Encanto offering that resulted in an approximate 22% (net of fees) absolute return on original equity to investors (including those from the CrowdStreet Marketplace). Certain aspects of the report such as dates of major events and the final outcome are easily verifiable while others, particularly underlying reasons behind the sponsor's business plan execution, are not.

The report partially relies upon the sponsor’s explanations, the information contained within sponsor-produced quarterly reports, and conference calls. This analysis is not an assertion of independently verified facts but, rather, is for informational purposes only, to convey CrowdStreet’s understanding of what transpired.

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