AH Capital purchased University Oaks, a distressed student housing property near the University of Georgia, for $9 million after it failed to close with another buyer. The property was in disrepair and had declining occupancy. AH Capital invested $4 million in renovations such as unit, roof and HVAC upgrades as well as new amenities. This repositioned the property and increased occupancy from the 40s% to mid 80s%. Stabilized projections estimate the property value will increase to $20 million with $1.2 million in annual net operating income, generating a strong return for AH Capital.

1. The Opportunity
University Oaks presented a unique opportunity
to invest in a well located but incredibly distressed
multifamilyassetincloseproximitytotheUniversity
of Georgia. The property was in an extreme state
of disrepair and had been mismanaged for many
years. Although it was once one of the most
popular off-campus student housing communities
in Athens, the property had devolved into a local
eyesore and a quasi-slum. However, it still retained
its excellent location and layout. The 30-acre site
is situated on the main thoroughfare leading to
campus and surrounded by some of the best
commercial developments in Athens, and AH
Capital saw an opportunity to restore the property
to its former status.
The purchase strategy
AH Capital purchased University Oaks out of
foreclosure. In the aftermath of the financial
crash, an opportunistic hedge fund purchased the
debt secured by the property and subsequently
foreclosed. The fund marketed the property and
awarded the deal to an interested buyer. When it
became evident that the buyer was not in a position
to perform, AH Capital learned of the deal. The
seller was motivated to complete the transaction
before the end of the year, and AH Capital sensed
an opportunity. It jumped in, quickly performed
a thorough due diligence, and negotiated an
aggressive seller-financed purchase structure.
AH Capital was able to acquire the property for
just $9M, almost $1M less than the previously
contracted sale price.
University Oaks
2360 West Broad Street
Athens, GA 30606
Units Year Built
500 1969
Purchase Price
$9M
Rehab
$4M
Stabilized Value
$20M
For More Information, Please Contact:
Daniel Alexander, Principal | 213.290.4449 | daniel@ahcapital.com | www.ahcapital.com
Case StudY

2. site culture improvement AND REBRANDING
After purchasing University Oaks, AH Capital immediately implemented its proprietary Site Culture Improvement
process to reposition and rebrand the property. AH Capital brought in its proven property management team
from Sycamore Property Management, an affiliate of AH Capital, which set out to improve customer service and
address the needs of the residents and of the community. Sycamore Property Management faced a tough chal-
lenge with University Oaks. While the property was 70% occupied at the time of the purchase, many of units were
rented to under-qualified tenants at below-market rates. As a result, Sycamore Property Management was forced
to implement a strategic detenanting.
At the same time, AH Capital launched a targeted Rebranding effort and
invested in capital improvements to address both the large amount
of deferred maintenance items and the opportunity to improve rents.
AH Capital spent over $4M rehabbing the property, an average of over
$8,000 per unit. Some of the major highlights of the rehab program
include:
• Upgrading 350 units to the AH branded standard, a modern-inspired theme with clean, neutral finishes
• Installing all new doors, windows and patio doors
• Replacing all roofs
• Installing all-new water supply lines and low-flow plumbing fixtures
• Replacing 2/3 of the HVAC systems
• Landscape upgrade and parking lot paving and seal coat
• Installing an unparalleled amenity package (fitness center, two pools, business center with Wi-Fi, state-
of-the-are laundry facility, sand volleyball, picnic areas, soccer court, tennis court, basketball court, pet
park, walking path and playground).
These improvements dramatically improved the asset and restored the community.
results
After investing a total of $13M in the deal, AH Capital secured a $8.2M recourse, floating rate financing with a $1.8M
earnout provision. Currently, Sycamore Property Management is engaged in an aggressive marketing and leasing
campaign. Occupancy has increased from the low 40%’s to mid 80’s. Upon stabilization AH Capital expects to
achieve NOI of $1.2M, an average effective rent $35 higher than at acquisition, and a valuation between $20M-$22M.
The renovations and upgrades
produced a more appealing,
modern apartment community with
a safe and secure environment.
Performance Summary
At Acquisition At Stabilization Percent Change
Value $9,000,000 $20,000,000 122%
NOI $- $1,202,159 -%
Acquisition (December 2012)
Acquisition Price 9,000,000
Rehab 4,000,000
Other Costs 576,000
Total 13,576,000
Financing
Debt 8,200,000
Equity 5,376,000
Current (June 2015):
T3 Annualized
Income $2,445,524
Expenses $1,560,763
NOI $884,761
Proforma (Stabilized):
Annualized
Income $2,727,931
Expenses $1,525,772
NOI $1,202,159
Debt Service 333,500
CapEx 125,000
Net Income $743,659
Cash on Cash Return 13.8%