The Dallas-based manager is still struggling with pricing on the properties which come across its desk.
Middle Market 50: Here are the fastest-growing midsize companies in North Texas
The Dallas Business Journal’s seventh annual Middle Market 50 list honors the fastest-growing private and public companies based in Dallas-Fort Worth with annual revenue between $10 million and $1 billion.
The Muse
The Muse
S2 Capital acquired The Muse in March 2017. The Muse is an 804-unit community located in Dallas, TX.
Business Plan & Execution
Formerly named Tierra Linda, this one, two and three-story garden style multifamily communities was originally constructed in 1969.
This project represented a continuation of S2’s “deep value-add strategy”, which involves identifying physically and operationally distressed properties that are good candidates for rent increases in well-located markets that S2 has extensive knowledge of.
The thesis for this investment was driven by an absentee owner, deferred maintenance, lack of reinvestment, reasonable purchase price and strong location.
S2 budgeted just over $11k p/unit in renovation costs that resulted in amenities and finishes with higher quality than competing properties in the submarket.
S2 successfully increased rents by 42% from $685 to $973 at the time of sale and surpassed other income projections related to the amenities package implemented.
Before
After
Key Metrics
Capitalization
$47,003,942
Total Equity
$9,703,942
Renovation Budget
$12,122,722
Year Built
1969
Total Units
804
Average Sqft/Unit
926 sqft
Units Renovated
68%
Starting Rent
$685
Ending Rent
$973
Rent Increase
$288
Hold Period
43 months
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The Landing at East Mil
The Landing at East Mil
S2 Capital acquired The Landing at East Mil in November 2018. The Landing is a 360-unit community in Orlando, FL.
Business Plan & Execution
Formerly named Waterview, this two and three-story garden style multifamily community was originally constructed in 1988.
In Q3 2018, S2 Capital began the acquisition of 2,400+ units in the high-growth southwest submarket of Orlando. This 1.5-mile radius of the submarket was strategically rebranded as “East Mil” in which Waterview became a part of and named The Landing at East Mil.
The thesis for the investment was driven primarily by our ability to acquire an off-market asset in a high growth submarket coupled with the expiration of the LURA (Land Use Restriction Agreement). The LURA capped rents at $700, however, expired upon our acquisition of the asset.
S2 budgeted to spend approximately $13K p/unit in renovation costs, converting the property from a “Class C” to “Class B” apartment project.
S2 successfully increased rents 36% from $719 to $979 at the time of sale. We were able to push rents $260 while only renovating 35% of the units due to the robust growth from renewals and long-term tenants that chose to stay in their unrenovated units.
This allowed us to save $1.5MM of the $4.75MM total construction budget and further boost returns for the investors.
Before
After
Key Metrics
Capitalization
$37,835,000
Total Equity
$8,525,000
Renovation Budget
$4,752,000
Year Built
1988
Total Units
360
Average Sqft/Unit
830 sqft
Units Renovated
35%
Starting Rent
$719
Ending Rent
$979
Rent Increase
$260
Hold Period
30 months
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S2 CAPITAL BUYS FORT WORTH COMMUNITY
The 369-unit acquisition marks the investor’s 10th purchase in the Metroplex over the past year.
FCP AND S2 CAPITAL MARK THIRD DFW TRANSACTION WITH ACQUISITION OF 308-UNIT OXFORD PARK APARTMENT COMMUNITY IN IRVING
The off-market transaction marks the third deal in DFW in the last 12 months between S2 and FCP.
