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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 9,500 units with a value in excess of $2.0 billion.

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Fact Sheet

Fact Sheet 2018

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 20 multifamily communities comprised of 9,500 units and a value in excess of $2.0 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 undertakes a wide array of value-add initiatives through a professional hands-on approach.

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 $2.0 billion worth of real estate, encompassing 9,500 residential units. Activity in 2017 included the acquisition of 1,145 apartment units. In 2016, activity included the acquisition of 2,594 apartment units, and in 2015, CLP acquired 1,990 units.

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 its 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 its 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 20 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 four in the city of Austin), he has relocated to that market to oversee the company’s interests in the Southern markets.

Ed Hannon, COO

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, he 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

As Vice President of Operational Audit, Brady is responsible for the strategic review and oversight of CLP’s operations at the property level and has over 20 years of real estate management experience. Brady joined CLP after providing management services for multifamily real estate firms across the United States. He has previously held leadership positions with AvalonBay Communities, Lincoln Property Company, Trammell Crow Residential, and Summit Properties.

Mike Kim, Vice President

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

Sunset Ridge, Westminster, Colo.: CLP continued to expand its multifamily portfolio in Colorado, closing on its third property acquisition in November 2017. With the purchase of the 280-unit Sunset Ridge Townhomes in Westminster, the firm brought its total unit count to over 900 in the Denver MSA. Located within a 20-minute drive of both downtown Denver and Boulder, the community consists of two- and three-bedroom tri-level townhome-style units with private outdoor entrances. Amenities include an updated clubhouse, Wi-Fi café, lounge area and fireplace, zero entry swimming pool, barbeque grills, large dog park, full basements, extra storage, new parking lot and playground. Interior renovations were completed over the last two years in nearly 80 percent of the 36 buildings, along with upgrades to the clubhouse, exteriors, landscaping and existing amenities. CLP will continue the renovation program as units naturally turn over, adding value though upgrades such as finishing the basements and installing washer/dryers in each unit, a high demand amenity in this submarket. The community’s prime location offers proximity to world-class entertainment, shopping, dining, and recreation, as well as easy access to the region’s Technology Corridor and major employment centers via nearby roads and rails.

Mountain Vista, Lakewood, Colo.: In September, CLP acquired its second Denver-area property in nine months, the 257-unit Mountain Vista Apartments in suburban Lakewood. Located 20 minutes west of downtown Denver, the multifamily community features a resident clubhouse, business center, fitness center, two outdoor swimming pools, picnic areas with barbeque grills, dog park, abundant parking and laundry rooms in each of its seven buildings. Individual units are outfitted with private entrances, gas heating, air conditioning, all-electric kitchens, dining room ceiling fans and free Wi-Fi. Of the 257 units, approximately 85 percent have been renovated since original construction. The multifamily property offers excellent access to ski areas and is situated only blocks from the RTD Federal Center Light Rail Station and the Belmar mixed-use entertainment and office redevelopment, and is close to the Southeast Business Corridor.

Loftin Place, West Palm Beach, Fla.: CLP expanded into South Florida with its July acquisition of the 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:


  • Regatta Sloan’s Lake, Denver, Colo.
    : 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 and is situated minutes from both Atlanta’s CBD and the Hartsfield-Jackson Atlanta International Airport.
  • Sage Corpus Christi, Corpus Christi, Texas: 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 was built in 2014 – and rebranded from “Springs at Corpus Christi.”
  • Array, Austin, Texas: 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. 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, Texas: In July, CLP expanded its Lone Star State presence with the acquisition of San Marin, a 220-unit property in this coastal city. 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, Texas: In June, CLP acquired its third property in the Austin, Texas 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. 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, N.J.: In March, CLP acquired River Park, a 224-unit Class A property in Raritan, Somerset County, N.J. 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. In Q3 2017, CLP completed a full renovation of the ground floor amenities. Enhancements include a brand new lobby with an automated package concierge system, leasing office, business center, resident clubroom, as well as an expansion of the fitness center with an adjoining workout/yoga studio featuring fitness-on-demand and spin cycles.
  • Villas Tech Ridge, Austin, Texas: 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. Since acquiring the asset, CLP stabilized occupancy and NOI. During Q1, CLP finished work on the renovation of the clubhouse, fitness center and leasing office.
2015:

  • Heights at Skyland, Tuscaloosa, Ala.
    : 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.
  • Harbor Pointe, Bayonne, N.J.: 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 90,000-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 percent to 96 percent.

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. In addition, a gut renovation of the clubhouse was completed in in Q1 2018.

  • Asher, Austin, Texas: 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. CLP 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 under-utilized 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. As such, CLP earmarked more than $12 million for capital improvements prior to ownership. With its management team in place, occupancy rose from 88 percent to 97 percent, while achieving an average rent increase of 4 percent. Due to these changes and improvements, the property is already producing cash-on-cash returns of approximately 10 percent to investors. In addition, CLP hired professional marina management, which boosted overall revenue and enhanced the appearance and appeal of the property. CLP also introduced a dog park, expansive playground, and new outdoor seating areas throughout the property. Restoration of the fire-damaged building is complete.
  • 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, seven 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, Ill.
    : 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.

In the three years since the purchase of this asset, CLP has completely repositioned the property, curing significant deferred maintenance, creating a new leasing office and fitness center, and renovating over 100 units.  In doing so, NOI was substantially increased, enabling refinance of the property in early June 2017 for $40 million, higher than the projected year-5 sale price in original projections. The refinance proceeds returned profits sufficient to generate an equity multiple of 1.76x on the initial investment of $9,850,000 and a 22 percent gross IRR.

CLP is now under contract to sell the property at $49.5 million (purchased for $28.5 million in April 2014), which is $13 million higher than the sale price originally projected at the expected exit in year 5.  The contract was signed with a well-respected fund manager on November 2nd, and scheduled to close in Q1 2018.  Including cumulative distributions to date, the sale is expected to generate approximately a 36 percent gross IRR and a 2.6x equity multiple in less than four years.

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.
  • 2010:
    Trantor Place, Staten Island, N.Y.:
    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. 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, and apartment units were renovated at the rate of 40 per month. With higher leasing rates and improved tenant retention, monthly revenue at Franklin Park has grown by 32 percent. Net operating income has increased over 100 percent from $11.5 million to $23.2 million. Due to the significant increase in net operating income, CLP was able to re-finance the existing loan multiple times and return in excess of 100 percent of the original equity in the deal.

For additional portfolio highlights, please visit http://castlelanterra.com/.

 

Website: www.castlelanterra.com

Category: Castle Lanterra Properties

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