This acquisition offers an opportunity to acquire an asset significantly below replacement cost with favorable assumable debt financing. Originally built in the late 1960s, the property has gone through several renovations, most recently addressing deferred maintenance, including roofs, HVAC, windows, exterior doors, asphalt, and landscaping. Previous ownership invested more than $3m in capital, which will allow the Sponsor to focus on revenue-generating improvements. 

The property is well located in the eastern portion of Savannah, GA, in the path of income growth, bounded by the Historic District 4 miles to the west and some of the metro area's wealthiest neighborhoods (Wilmington Park, the Landings, Whitemarsh Island, and Dutch Island) immediately to the east.

Historically, rents as a percentage of income in the US have averaged about 30.0%. In Savannah, rent to income currently sits at 26.7%, underscoring the relative affordability of the market. This also highlights the increased capacity for rent growth as the economy continues to grow and diversify.

High Density Exit Upside

The property is zoned for 187 units, which could appeal to the next buyer who may look to increase density at the property. The property is not within the Historic District, and therefore, does not need additional special approvals. Lakeland has not contemplated this additional density in the current underwriting