Case Studies: Principal Investments

The Encore, Alexandria, VA

The Encore is Bonaventure’s signature property. It is a symbol of the vision the Company employs during its site selection process. For years the City of Alexandria viewed this as a blighted property on its last legs. Our principals saw the opportunity to buy great land at a discount in the City of Alexandria and to utilize the existing building shells to produce a Class A- property at a substantial discount to ground up development costs. Architectural features such as pitched roofs, stone entrance accents, and balconies converted to sunrooms contribute to the dramatic transformation of this property.

Challenges

  • Acquired a dated/functionally obsolete asset in a great location in Alexandria.
  • Property was grand-fathered for new code requirements (i.e. sprinklers, storm water, parking ratio, etc.) unless renovation exceeded dollar threshold.
  • Needed a plan and schedule to limit vacancy loss.
  • Existing units lacked amenities of W/D, 2nd bathroom, individual unit HVAC, and metered utilities.
  • Re-branding and repositioning the resident base was needed to support the new image.

Solutions

  • Added new facades, architectural roofs, new mechanical systems, remove central plant and install individual HVAC systems.
  • Spent one year re-sequencing leases so the property could be vacated in an orderly fashion to facilitate construction and minimize vacancy.
  • It was determined that delaying construction of the clubhouse would avoid triggering code mandated upgrades and keep it under the dollar threshold. As a result $2M was saved.
  • Property re-branded as “The Encore” with new collateral and marketing message.
  • We were able to utilize 1031 proceeds in the acquisition.