Revitalizing dated apartments for a next generation of college students
Opportunity
Carriage House Apartments has been housing University of Connecticut students for more than 50 years but had fallen into poor condition due to ownership distress. The 131-bed complex was in foreclosure with only a 50% occupancy rate for the 2018 – 2019 school year, but had a desirable location and strong potential for growth.
Strategy & Action Steps
Based on a close relationship with the foreclosing lender, Corridor purchased the property’s promissory note and took title at a ~60% discount to the market ($5.6MM) while developing comprehensive plans to renovate the units, upgrade building exteriors, and add new amenities to the complex.
Corridor invested $2MM in these enhancements and marketed the units aggressively for the following school year.
Outcomes
For the 2019 – 2020 school year, Carriage House had a successful lease-up of 100%. Upon stabilization, the deal was recapitalized with fresh investor equity. After another 100% lease-up for the following school year, the property was sold for $11.23MM in February of 2021, realizing an IRR of 29% and an equity multiple of 1.7x
