Lombard Equities Acquires Grandview Apartments

We are thrilled to announce yet another successful JV closing with our partners at Ethos Development in the acquisition of the Grandview Apartments in Portland, OR. This acquisition fits perfectly into our current strategy of either a) well priced value add deals or b) opportunistic acquisition opportunities with excellent cash flow characteristics.

The story of this acquisition is the sort of deal we’re been searching for, and we’re thrilled to offer to our investors. Below is a short list of acquisition criteria this deal met. 

1. Excellent Entry Pricing - we secured this property for substantially less than market averages for a building of this vintage, which gives us a great starting basis. 

2. Solid Lending - we acquired the asset with a 5-year loan (non-recourse) set at 5.9% interest only which will enable us to deliver solid cash yield upside to our investors. Thanks to the team at Ethos Commercial Advisors for helping source and place the loan. 

3. Good Portland Location - in alignment with our general conviction on Portland’s renaissance, the Grandview is located on the outskirts of downtown (not in downtown), quite near to Lincoln High School and all that the West Side has to offer

Another aspect of this deal that drove the great pricing was that vacancy was quite high on going into contract. In order to ensure good performance, we negotiated effective management of the on-site management company during the acquisition period. During this time (i.e. during due diligence and closing) we were able to take building-wide occupancy from around 85% to 100% in time for closing.

For those who are interested - insurance was a challenge, as it always was, but it was mitigated by the low purchase price. We were able to obtain full coverage as well as earthquake protection for the asset at a price that (while not cheap) was accounted for in our acquisition underwriting and math to still deliver returns. The building also features mostly upgraded electric, which helped.

This investment also aligns with another thematic, which is our conviction around many of these older vintage brick properties. The reality is that the market for these is extremely bearish right now, and this sentiment rewards those with conviction. When property markets rebound, we project the same will occur for this type of asset type, and in the meantime the cash flow is a great reward.  

If you are interested in learning about future opportunities in our pipeline (for accredited investors only) please click below to schedule a call.