Gateway Crossing Apartments is a 30-unit complex located in the heart of east Portland’s Gateway, a Class C neighborhood with good arterial access. Previous owners performed incremental upgrades that retained most tenants.
Despite minor improvements, tenants that the property attracted could not provide the revenue to support more than a breakeven business, and so for 6 years, positive cash flow was nil. Expenses to care and manage the property were increasing. Unwilling to make a significant additional investment, the owners decided to sell.
Westland’s investors purchased the property for $1.4 million after an alternative offer collapsed. Seeking to appeal to a demographic which could generate sufficient revenue, Westland invested $450K for a major upgrade, rehabilitating the buildings and attracting new tenants.
The per-unit value of the property increased from $15K to $60K, or a total of $4.7 million. Over 3 years, with new tenants, revenue increased nearly 3-fold, creating an estimated 52.3% IRR over that period.