gateway crossing

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.

cost of investing

$958,000

realized proceeds

$4,012,000

gross IRr

52%

the challenge

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.

the solution

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 result

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.

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