Colony Hills Capital Sells Mobile Five Portfolio for $134.3 Million

WILBRAHAM — Colony Hills Capital announced that it recently sold the 2,013-unit Mobile Five portfolio for $134,300,000. The sale of the multi-family apartment portfolio, purchased for $98 million in May 2013, produced a healthy, double-digit return for the firm’s investors.

This sale is the latest example of Colony Hills’ ability to source investment opportunities to which it can add substantial value through strategic capital investments and optimizing on-site management. This profitable investment also highlights how Colony Hills can enter various markets and capitalize on opportunities that others may overlook. Colony Hills recognized that Mobile, Ala. was an underappreciated market for multi-family investments and purchased the portfolio prior to the arrival of major employers like Airbus, Whole Foods, SSAB, and Amazon, as well as the major expansion of Austal, USA.

Colony Hills Capital is a real-estate investment company specializing in the acquisition and management of value-add multi-family properties. The investment targets are typically sourced ‘off-market,’ and at the time Colony Hills acquires them, they are underperforming relative to their peers in the marketplace. The Mobile Five portfolio was identified as an ideal investment by President David Kaufman, due to it being mismanaged, undercapitalized, and lacking a clear business plan.

The portfolio consists of five separate communities comprising a variety of vintages and styles, which catered to a wide spectrum of renters. The properties are Yester Oaks (587 units), Crossings at Pinebrook (545 units), Windsor Place (384 units), Sandpiper Townhomes (253 units), and Pathways Apartments (244 units). The portfolio is also geographically diversified, from east of Interstate 65 to the western suburbs, and further diversified in product quality ranging from class-A to class-C apartments, demonstrating that Colony Hills has the capability to manage assets of varying classes and in diverse locations.

While under Colony Hills’ ownership, the properties benefited from a $4 million capital-improvement program which focused on upgrading unit interiors, modernizing outdated clubhouses, adding resident amenities such as fitness centers and dog parks, and enhancing existing resort-size pools with new furniture and grilling centers. Colony Hills also rebranded the communities with new signage and landscaping, and added management systems to optimize the marketing and sales execution. As a result of these improvements, average rents rose considerably.

The neighborhoods surrounding the communities improved as well. A new Whole Foods market moved in a short distance from Crossings at Pinebrook. The city of Mobile garnered a number of awards for the business climate created by the addition of Whole Foods, Airbus, Amazon, and SSAB.

“The Mobile Five Portfolio is the most recent example of the value that can be created by our investment and management team here at Colony Hills,” said founder and CEO Glenn Hanson. “We are currently very active in seeking off-market investment opportunities, and even within this part of market cycle have several new acquisitions under consideration within our pipeline, and look forward to our next announcement.”