Castle Lanterra Expands Texas Offerings
- Sep 06, 2016
“We acquired this property at a very attractive entry point, at approximately $104,000 per unit, allowing for 11 percent cash-on-cash return at inception,” Elie Rieder, Castle Lanterra Properties’ founder & CEO, told MHN. “The previous owner did a tremendous job renovating the property, spending in excess of $10 million to renovate 90 percent of the units, and create new amenities…effectively transforming the entire look and feel of the property.”
This marks the fourth property the company has purchased in the growing metro since first entering the market in March 2015.
Amenities include two large pools (including one Olympic-sized pool), two dog parks with a pet washing station, a modern fitness center with elevated spinning room and yoga room, gut-renovated resident lounge, business center and internet café, covered outdoor gaming area, lighted sports court, fully updated laundry rooms, outdoor seating and grills, and a bus stop directly in front of property.
The property is located approximately 3 miles southeast of downtown Austin, on the East Riverside corridor, which is experiencing tremendous growth and gentrification.
Rental rates in this submarket have grown 6.8 percent from Q4 2014 to Q4 2015 and in December 2015, Oracle announced a major expansion just one mile from the property, which will bring over 1,500-direct jobs and an estimated 4,000 total jobs to the immediate area on a new 27-acre 560,000-square-foot corporate campus.
According to Rieder, the property speaks to the company’s market and asset driven approach to investing and fits well into its investment philosophy of “long-term controlled growth.”
“In a market we look for positive employment and population growth, strong infrastructure, favorable business climate and diverse employment base,” he said. “As for the asset itself, we look for favorable yield at inception, opportunity for value-add upside, proximity to major employment centers, retail, entertainment, and recreation, and a competitive amenity base.”
Castle Lanterra will continue the unit renovation program put in place by the prior owner.
“Ten percent of the units still remain and we will undertake renovations to these units as they naturally turn over,” Rieder said. “We have plans to make moderate exterior and interior enhancements throughout the property to ensure that Arrangement maintains its competitive position in the submarket.”
Image courtesy of Arrangement