St. John's Park is a 45-unit garden style apartment community located in Vancouver, WA, the largest submarket in the Portland, OR MSA. We acquired the property in late 2019 with a value-add investment strategy. The property was in excellent condition with much of the exterior being replaced in the 3 years before we acquired it; however, unit interiors had never been updated beyond paint and new flooring in a handful of units leaving a lot of upside to be realized through renovations.

 

Occupancy and rent growth were strong in both the market and submarket, but the property was being mismanaged with high expenses, occupancy dropping to 84%, and in-place rents 8.73% below market in as-is condition and 13.58% below market in renovated condition. This investment originally had a 3-year hold period, but due to its strong performance and low cost basis, we decided to refinance in April 2022 with a fixed-rate Freddie Mac loan at 3.50% and hold it longer term.