Increasing density allows you to create value in real estate assets
Turnstone Capital recently purchased a multi-family property, located in Inglewood, on behalf of our partner, a publicly traded company in Japan. Prior to purchase, a physical inspection revealed an opportunity to add value by increasing density. At purchase, the property was comprised of a mix of 2-bedroom and 3-bedroom units, but during the renovation process, one bedroom was added to each unit. In the end, through thoughtful planning, top-of-the-market renovations, and increased density, Turnstone Capital created instant equity, increased rents, and dramatically improved overall returns.
Unit Mix At Purchase: 2-bedroom and 3-bedroom
Unit Mix After Stabilization: 3-bedroom and 4-bedroom
At Purchase: After Stabilization:
CAP Rate: 2.97% Stabilized CAP Rate: 6.11%
Rents, 2-bed Units: $1,079 Stabilized Rents, 2-bed Units: $1,722
Rents, 3-bed Unit: $1,236 Stabilized Rents, 3-bed Unit: $1,895