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Castle Lanterra Properties

| February 11, 2017 | 0 Comments

Formed in 2009, Castle Lanterra Properties is a privately held real estate investment company focused on the acquisition and management of quality income producing multifamily properties within strategic growth markets throughout the United States. Through a rigorous value-enhancement program that includes thoughtful renovations, operational improvements and ancillary income development, CLP aims to reposition each asset with the goal of maximizing NOI, elevating its competitive position within the market, and providing attractive risk-adjusted returns for its investment partners. CLP currently owns and manages a portfolio comprised of 8,900 units with a value in excess of $1.8 billion.

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Fact Sheet

Fact Sheet 2017

Castle Lanterra Properties (CLP)
1 Executive Blvd., Suite 204
Suffern, N.Y. 10901

Company Overview

 

Formed in 2009, Castle Lanterra Properties (CLP) is a privately held real estate investment company focused on the acquisition and management of quality income producing multifamily properties within strategic growth markets throughout the United States.  CLP currently owns and manages 16 multifamily communities comprised of 8,900 units and a value in excess of $1.8 billion.

CLP seeks to acquire well-located multifamily properties in primary and lower tier markets with sound underlying fundamentals and meaningful growth potential. Through a rigorous value-enhancement program that includes thoughtful renovations, operational improvements and ancillary income development, CLP aims to reposition each asset with the goal of maximizing NOI and elevating its competitive position within the market.

 

Capabilities

 

CLP’s core capabilities encompass meticulous due diligence, underwriting expertise, acquisition and disposition, and ongoing property and asset management. The company accomplishes diverse value-add activities through a professional hands-on approach. CLP has repositioned multiple properties in recent years and is recognized for its strength, integrity and success.

The firm has extensive relationships with prominent owners, third-party operators, banks, attorneys, brokers, and others in the real estate industry to identify, structure and close potential investment transactions with speed and decisiveness.

 

History

 

Since 2009, CLP and its affiliates have acquired more than $1.2 billion worth of real estate, encompassing 8,300 residential units. Activity in 2016 included the acquisition of 2,594 apartment units valued at over $415 million.  In 2015, CLP acquired 1,988 units, valued at approximately $370 million.

 

Philosophy

 

CLP’s investment expertise is derived from six key principles:

 

  • Robust and In-Depth Market Knowledge CLP invests a great deal of time and effort to research the submarkets in which it chooses to invest. Coupled with the firm’s personal and institutional networks, this deep market knowledge enables CLP to transact quickly with full confidence in their pricing and return projections.

 

  • Top Talent CLP has a team of accomplished investment professionals who provide expertise in all facets of real estate investment and management. The executive team members each have 15+ years of experience in their respective fields.

 

  • Thorough Due Diligence Expert and thorough due diligence is a company hallmark. CLP’s multi-disciplinary process of evaluating every aspect of a potential transaction combines financial, operational and technical expertise with an in-depth understanding of local, regional and national markets. CLP provides vision and a creative approach to debt and equity structuring enabling the company to complete difficult, complex and challenging transactions.

 

  • Hands-on Operations and Strategic Management CLP is not only an owner but also an experienced operator, employing focused, hands-on-operational and strategic management throughout the property’s ownership. This includes comprehensive oversight of all operational activities, continual strategic analysis and review, and on-the ground implementation of value-add initiatives.

 

  • Track Record CLP’s strong investment track record reflects their ability to successfully identify, acquire, manage, and exit multifamily property investments, resulting in meaningful NOI growth, capital appreciation, and attractive risk-adjusted returns.

 

  • Reputation and History CLP’s strong reputation is built on three generations of successful real estate investment activity. It is one that values ethics, integrity and fair-dealing with sellers, buyers and industry professionals alike.

 

Leadership

 

Elie Rieder, Founder & CEO

Rieder, who founded CLP in 2009, has been a real estate owner, operator and investor since 1998. He has been directly involved in the acquisition of more than 18,000 multifamily units and has invested across multiple real estate sectors. He is an equity partner in the portfolio of Fieldstone Properties, a family-owned entity that owns and manages a substantial portfolio of multifamily properties with no outside partners.  Rieder is also an equity partner in Lanterra Developments, a preeminent developer of more than 10,000 luxury condominium units in Toronto. Lastly, he is the manager of several insurance funds with over $400 million of assets under management, and has invested in multiple high-yielding real estate investments through these vehicles.

 

Austin Alexander, Managing Director

As a Managing Director, Alexander oversees the acquisition and repositioning of special situation and value-add opportunities for CLP. Prior to CLP, he was partner in multiple New York real estate investments valued at over $200 million. Alexander also led acquisitions and management of numerous properties at Blackstone Group, and was known for his expertise in underwriting and structuring custom strategies as loan officer at Deutsche Bank. With CLP’s acquisition of six multifamily properties in the state of Texas (including 4 in the city of Austin), he has relocated to that market to oversee the company’s interests in the Southern markets.

 

Ed Hannon, Chief Operating Officer

Hannon is responsible for overseeing all of CLP’s non-investment related activities, including corporate policies and procedures, corporate governance, risk management, regulatory compliance, HR, and information technology. He brings 30+ years of experience as an investment professional to CLP and possesses a deep understanding of investment and operational best practices. Most recently, Hannon was Chief Operating Officer of Quest Global Advisors. Prior to Quest, he was Head of Hedge Fund Investment Due Diligence, Manager Selection and Operational Due Diligence at Stamos Capital Partners, where he was a Partner and member of the Investment Committee. Previously, Hannon was Head of Risk Management for Royal Bank of Canada’s Alternative Assets Group, and Global Head of Hedge Fund Manager Selection for Merrill Lynch’s $20 billion Hedge Fund Platform. Hannon began his investment career as a fixed income Portfolio Manager at Nomura Securities (Tokyo), where he specialized in esoteric instruments and oversaw a $3.7 billion asset-backed fund of funds portfolio. He received a Bachelor of Science degree from The Pennsylvania State University and is a CFA Charterholder.

 

Benjamin Loney, Head of Acquisitions

Loney is responsible for identifying, evaluating and structuring asset and portfolio investments. He also oversees the due diligence process and business plan development for each property. Previously, he was responsible for sourcing and completing more than $400 million in asset and portfolio acquisitions of multifamily buildings as a vice president of the Milestone Group. He is known for his extensive expertise in completing real estate acquisitions, dispositions, recapitalizations and mergers in the U.S. and internationally.

 

Michael Maffei, Controller

Maffei has served as the Controller for Castle Lanterra Properties and its affiliates and subsidiaries since the company’s inception. Previously serving as a department manager for Marks Paneth, CPA, a major New York real estate accounting and consulting firm, Maffei has broad experience across commercial, multifamily, hospitality and development for REITs, private equity funds and private ownership groups. He is a licensed CPA and a member of the American Institute of Certified Public Accountants.

 

Jim Brady, Vice President of Operations & Property Management

As Vice President of Property Management and Operations, Brady is responsible for carrying out CLP’s value-add initiatives implementing operational improvements across the portfolio. Having held senior leadership positions for such companies as AvalonBay Communities, Lincoln Property Co., Trammell Crow Residential, and Summit Properties, he has been responsible for portfolios as large as 147 apartment communities and up to 500 employees.

 

Mike Kim, Vice President of Investor Relations

In his role as Vice President of Investor Relations, Kim is responsible for managing the firm’s relationships with its external investor base, managing the investor reporting function, and is actively involved in product and business development. He is also responsible for supporting the firm’s marketing and public relations initiatives. With more than 15 years of experience, he has been actively involved in securing in excess of $1.5 billion in equity commitments from a wide range of institutional and individual investors for companies such as Credit Suisse, Gemini Real Estate Advisors, Castellan Real Estate Partners, and CityShares.

 

Portfolio Investment Highlights

 

2017:
  • Loftin Place, West Palm Beach, Fla.: CLP expanded into South Florida with its July acquisition of 259-unit Loftin Place in downtown West Palm Beach. The property is a class A-plus, mid-rise community offering panoramic views of the city, Intracoastal Waterway, and scenic Atlantic Ocean beaches. Loftin Place is five minutes from the future West Palm Beach station for high-speed rail service All Aboard Florida, better known as the Brightline, which will eventually run from Miami to Orlando. Completed in late 2015, the eight-story building features market-leading amenities including a rooftop tennis court, jogging track, gazebo, lounge, and landscaped sundeck; resort-style pool with lap lanes; state-of-the-art fitness center and yoga studio; outdoor billiard table and BBQ area; conference center and resident catering kitchen; and garage with remote access. Units feature nine-foot ceilings and high-end finishes including quartz countertops, European-style kitchens, stainless steel appliances, frameless shower enclosures, and private patios and balconies. The property was built with energy efficiency in mind, including LED lighting and Energy Star appliances throughout. Loftin Place encourages the eco-friendly use of bicycles by tenants, providing ample storage and a free onsite repair shop.

 

  • Agave, San Antonio, Texas: In May, CLP made its first acquisition in the San Antonio market, purchasing the 349-unit, class A multifamily community, just outside of the city’s CBD. The property was built in 2016 and has rare frontage on the famed San Antonio River Walk. Residents have walkable access to employment, retail, entertainment and abundant outdoor recreational opportunities, as well as easy access to major highways. Among Agave’s unique amenities are a clubhouse with resident lounge, a chef’s kitchen with a dining room for entertaining and a resort-class pool area featuring a palm-shaded courtyard with hammocks, outdoor kitchen, and gaming area. The state-of-the-art fitness club is outfitted with cardio and strength training equipment, as well as a yoga, Pilates, and barre studio. Outstanding interior amenities include 10-foot ceilings, gourmet kitchens with Energy Star appliances, floor-to-ceiling windows, glass walk-in showers, and oversized closets. All units are high-speed fiber optic wired and offer abundant storage space.
2016:
  • Alexan Sloan’s Lake, Denver, CO.: In late December, CLP completed its first deal in Denver, acquiring this 369-unit luxury apartment community, located in the city’s West Colfax district. The property is unique for CLP, being new construction and having more than 8,800 square feet of fully leased retail space. It has unique amenities including a resort-style pool, media room and outdoor movie wall, state-of-the-art fitness center, work-from-home offices and conference room, bike repair room, and dog wash room. Located just one block from Sloan’s Lake and the 177-acre park surrounding it, the property offers immediate access to walking, jogging, biking, kayaking, fishing, boating, and water-skiing – appealing to both Millennials and “Empty-Nesters” seeking active lifestyles in a modern yet bucolic setting.

 

  • Landing Square, Atlanta, GA.: In December, this property marked CLP’s entry into the Atlanta market. The 322-unit apartment community in the South Fulton submarket was built in 2008. Situated minutes from both Atlanta’s CBD and the Hartsfield-Jackson Atlanta International Airport, the mid-rise community offers amenities including a clubhouse, fitness center and business center, resort-style pool, outdoor terraces with barbecue grills, playground and youth lounge, and detached garages. Planned enhancements include new flooring, lighting, and countertops, plus refreshing the clubhouse, pool and cabana areas, and additional fitness center equipment.

 

  • Sage Corpus Christi, Corpus Christi, TX: In November, CLP boosted its profile in the Texas multifamily market by acquiring this 284-unit property in the city’s prominent South Side region. This was the firm’s second acquisition in the city and its sixth in the state. This Class A property built in 2014 – and rebranded from “Springs at Corpus Christi” – features extensive landscaping, townhouse-style private entrances, resort-style swimming pool, 24-hour state-of-the-art fitness center, dog park, and car care area. In addition, 20 “Concierge Units” offer updated lighting kits, stainless steel appliances, granite countertops and crown molding.

 

  • Array, Austin, TX: In August, CLP grew its portfolio in Austin with the acquisition on the 370-unit apartment property. The purchase marked its fourth since entering the market in March 2015. Property amenities include two dog parks, two large pools, an oversized fitness center, and a new resident lounge. Located in Austin’s revitalized East Riverside corridor, Arrangement (rebranded as “Array”) was originally constructed in 1973 and underwent an extensive $10 million redevelopment in 2013, gut-renovating more than 90 percent of the units.

 

  • San Marin, Corpus Christi, TX: In July, CLP expanded its Lone Star State presence with the acquisition of San Marin, a 220-unit property in this coastal city. Constructed in 1998, the community features a resort-style ambiance, offering such amenities as an expansive swimming pool, clubhouse, fitness center and more on the well-maintained and landscaped property. CLP has allocated more than $10,000 per unit for ongoing upgrades to enhance the potential for rent growth in a fast-growing metropolitan area.

 

  • 1825 Apartments, Pflugerville, TX: In June, CLP acquired its third property in the Austin, Tex. Market, adding the 455-unit 1825 Apartments to its portfolio. The community consists of 60 buildings completed in two phases: The 351-unit 1825 Place was constructed in 2001, and the 104-unit 1825 Cottages in 1986. Amenities include a resort-style pool, fitness and business centers, outdoor playground and pet park, and clubhouse. The previous owner had completed more than $2 million of exterior and unit improvement, and CLP plans additional unit, amenity and property upgrades.

 

  • River Park, Raritan, NJ: On March 22, CLP acquired River Park, a 224-unit Class A property in Raritan, Somerset County, N.J. Constructed in 2007, the property features an underground parking garage, heated pool, fitness center, tennis courts, club room, business center with conference room, and on-site concierge. The transaction marked CLP’s second acquisition in New Jersey in a five-month period, following the October 2015 acquisition of Harbor Pointe in Bayonne.

 

  • Villas Tech Ridge, Austin, TX: CLP increased its presence in the Austin market with the February acquisition of Villas Tech Ridge, a 350-unit luxury apartment community situated in the technology hub of this fast-growing market. It was developed in 2008 as part of the environmentally-driven Austin Energy Green Builder Program. Features include open floor plans with nine-foot or vaulted ceilings on one-, two- and three-bedroom units and high-end finishes. The property features a resort-style pool with a large cabana, a clubhouse, fitness center and pet park.
2015:
  • Heights at Skyland, Tuscaloosa, AL: With the acquisition of this 304-unit apartment community in October 2015, CLP entered the market of Alabama’s capital city. The acquisition provided a value-add opportunity in a stable and growing market with a demand for high-quality affordable housing. Amenities include a recently renovated clubroom, swimming pool, volleyball and tennis courts, business and fitness centers, and a playground. Plans call for unit upgrades, including class A finishes, stainless steel appliances and granite countertops. To date, CLP has renovated approximately 25% of the units and has a achieved an average ROI of 15% on the renovated units. Distributions to date have resulted in a 13.6% cash on cash return to investors.

 

  • Harbor Pointe, Bayonne, NJ: The 544-unit property in Bayonne, N.J., formerly known as Alexan CityView, was acquired in October for $147.5 million. Situated on New Jersey’s prestigious Gold Coast with views of downtown Manhattan, the LEED Silver certified property’s amenities include a 9,000-square-foot clubhouse with computer lounge, media lounge, business center, fitness studio, indoor basketball court, children’s playroom, and salt water pool. The location on Peninsula at Bayonne Harbor, a 420-acre man-made, master-planned site, offers surrounding opportunities for expansion. Since taking ownership, CLP increased the leased percentage from 88% to 96%. Property enhancements to date include renovations to the pool area, unit renovations, a new fleet of bus shuttles for residents, an automated package concierge system, a comprehensive security and video surveillance system, and replacement of all existing door locks with electronic key fobs.

 

  • Asher, Austin, TX: CLP entered the Austin market with the March 2015 acquisition of Asher (formerly Stonegate Apartments), a 452-unit class A property. The property’s large amenity space was a driving factor in the acquisition, with the upside potential enhanced by the opportunity to give the on-site clubhouse a facelift and to double the size of the fitness center. Additional unrealized potential exists because of the property’s size – 56 acres. In Q2 2016, CLP completed renovations to the clubhouse which included a complete overhaul and reconfiguration of the amenity space, with new flooring, fixtures, paint, lighting and contemporary design details. We also introduced a new gaming area, internet café, reception area, a package concierge system with 24/7 secured access, and doubled the size of the fitness center by removing an underutilized laundry room.

 

  • Watergate Pointe, Annapolis, MD: The 608-unit multifamily property was acquired in February for $105 million. A unique waterfront property on a 31-acre peninsula, it consists of 13 residential buildings, a two-story clubhouse, a 162-slip marina, and is the only property in its submarket with 3,000 linear square feet of water frontage. Originally constructed in 1968, with a community center added in 2004, CLP identified significant upside potential, including the restoration of a 45-unit building damaged by fire prior to ownership, as well as other major upgrades throughout the property. As such, CLP earmarked more than $12 million for capital improvements prior to ownership. With our own management team in place, occupancy rose from 88% to 97%, while achieving an average rent increase of 4%. Due to these changes and improvements, the property is already producing cash-on-cash returns of approximately 10% to investors. In addition, CLP also hired professional marina management, which boosted overall revenue and enhanced the appearance and appeal of the property. We also introduced a dog park, expansive playground, and new outdoor seating areas throughout the property. Restoration of the fire-damaged building has commenced and is scheduled for completion in January 2017.

 

  • 222 Saratoga, Baltimore, MD: Acquired in January 2015 for $13.5 million, the 80-unit, nine-story elevator building is a former warehouse converted to luxury residential. Located downtown, it is ideal for a live-work-play environment, and in keeping with its focus on maximizing the potential of residential communities, CLP will take advantage of the property’s value-add potential with a three-pronged effort. First, the property will be repositioned as a luxury rental property. Second, management will be improved. And finally, 18 additional units will be captured by repurposing and reconfiguring existing residences and common areas, while the ground floor retail space has already been converted to a new resident lounge, fitness center and leasing office. Other improvements include a gut renovation of the lobby.

 

2014:
  • Midpointe Apartments, Chicago, IL: Acquired in April 2014, Midpointe is a 424-unit apartment community comprised of eight four-story elevator buildings. The property is located in Chicago, Ill., in an urban-infill, supply constrained submarket that caters to a suburban living environment. By purchasing the property off-market, CLP was able to obtain a discount to prevailing market prices and a high initial cap rate. This ensured strong cash flow at inception. CLP allocated $2.6 million for additional unit renovations and structural upgrades. Common area upgrades include improvements to the pool, landscaping, lighting, and the addition of more prominent signage. A new leasing office and business center was built and a large unutilized storage space was converted into a fitness center. With the bulk of our initial capital improvement plan now complete, the property is being actively marketed for a sale.

 

2013:
  •  Misty Ridge Apartments, Woodbridge, VA: A 409-unit community of 25 two-story buildings, the property had tired exterior finishes and amenities and dated interiors when acquired in April. CLP immediately began implementing a business plan to upgrade the exterior and amenities and implemented a $3 million capital improvement program to upgrade 278 units to a luxury level. The result: supported by double-digit household growth in the region, CLP’s value-add program is generating an average rent premium of $150 per month.
Earlier:
  • Trantor Place, Staten Island, NY: The recapitalization, repositioning and disposition of this property reflects CLP’s ability to maximize a property’s potential and implement a turnaround strategy. CLP acquired the rent-stabilized, 177-unit, 16-building garden apartment complex in 2011 for $11 million and subsequently enhanced the value of the property through an extensive, $2 million capital improvement program over the past several years. Upgrades included new roofing, a full-window replacement, updated energy-efficient lighting, new landscaping, entrance upgrades and more. As a result, rents grew by 11 percent during the period of ownership, and net income was increased by approximately 15 percent annualized. At the end of 2014, CLP completed the sale of the property for $17.9 million, generating an IRR of 29 percent and an equity multiple of 2.1x.

 

  • Franklin Park at Greenbelt Station, Greenbelt, MD: In October 2010, CLP acquired this 2,877-unit apartment complex in an off-market transaction. A $15 million capital improvement program included upgrades to roofing, exterior lighting, entranceways, parking lots, landscaping and signage. Apartment units were renovated at the rate of 40 per month. Each unit underwent a gut renovation including addition to new plumbing and electrical lines throughout. With higher leasing rates and improved tenant retention, monthly revenue at Franklin Park has grown by 32%. Net operating income has increased over 100% from $11.5 million to $23.2 million. Due to the significant increase in net operating income, we were able to re-financed the existing loan multiple times and return in excess of 100% of the original equity in the deal.

Website: www.castlelanterra.com

Category: Castle Lanterra Properties

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