Parsons Corporation to lease space in Georgia Cyber Center

Parsons Corporation–A Defense, Security, Infrastructure and Intelligence Company with 16,000 employees and $3.6 Billion in Revenue–is the latest company to lease space in  the Georgia Cyber Center.  It is estimated that they will create twenty-six jobs with the potential for more in the future.  

 

According to Wikipedia, Parsons Corporation provided jet propulsion facilities during the cold war, and worked with nuclear, chemical weapons, as well as working in systems design for aircraft, missiles, and rockets.  Today Parsons focuses on defense, infrastructure, and security, and handles many federal and municipal agencies along with private customers. 

 

According to their website, Parsons has worked with the US Government for over 30 years providing technical and cyber intelligence solutions.  The Cyber Center will be a great match for them and they will be a welcome addition to Augusta!  

 

What are your thoughts about Parsons coming to Augusta?  It seems the nation’s intelligence and cyber contractors are coming to Augusta!  Do you think they will bring their whole operations here or just small teams? 

 

Additional Links:

Cyber Center Website
Press Release

 

 

Timber Thinning and Subdivision Case Study: Magruder Tract

In this video we talk about timber thinning and land subdivision at Magruder Place, a 90-acre tract of land adjacent to Lights of The South on Louisville road in Grovetown, GA.  

The Magruder Tract was a 90 acre tract, and the owner enlisted the Brokers at Presley Realty to sell the property.   he property had merchantable timber, but had limited access as an adjacent property controlled the frontage.  We marketed heavily to developers and builders with little success.  We began to discuss the possibility of subdividing, and after meeting with the owner, we proceeded with a plan to subdivide. 

 

First, we met with the neighbors and negotiated a land swap, where the adjacent owners increased squared off their property and our client now had road frontage and access to Louisville Road.  This resolved the issue of the north side of the property not having road access.  Travis then worked with Columbia County and the surveyor to create a subdivision concept everyone was happy with. 

Travis also oversaw the thinning operation.  Having been in forestry for many years, Travis has lots of experience with timber thinning, and was careful to choose a timber company that he knew would be careful with the property, and could chip and mulch the debris.  Price McWhorter handled this project, and did a great job.  This company also oversaw repairs to the pond dam, which was in disrepair. 

The result was a beautifully manicured property, which was visible from the street, with a gorgeous pond.  The lots sold quickly, and as of now we have one remaining.  The owner will at the current price sell the lots for over 1 million dollars.   

 

Do you have any experience subdividing large tracts of land?  Have you ever performed a real estate cut on your land?  Do you have any good or bad stories of working with logging crews?  We’d love to hear from you!  

 

Helpful Links: 

North Georgia Timber

McWhorter Logging (Great GA Logging Contractor)

Story about Josh Key (Beech Island Timber)

Josh Key was honored as FRA’s 2019 Outstanding Logger of the Year

Beach Island Timber’s Website

3rd Quarter 2019 Olde Town Market Update

There are a lot of good things happening in Olde Town!  I had the privilege of turning over the role of President of the Olde Town Neighborhood Association to Bob Trescott, who’s been serving as Vice President.  As the father of five and brand new twins, I needed to trim my commitments, but I was encouraged to see lots of new and excited people with fire and energy to move the neighborhood forward!   

As far as real estate goes, many homes are under renovation and we’ve seen some notable sales driving up the prices.  The Renaissance Apartments at Third and Broad were foreclosed on by HUD last week, and likely will be sold as market-rate apartments in the next few months–that will be great for the neighborhood. We’ve definitely seen the prices rising–in 2016 and 2017 the average price per foot was (38) per square foot, and in 2019 so far it is (72) per square foot!  We are definitely seeing Gentrification is coming to the neighborhood. Also Olde Town Apartments is continuing to renovate and lease units.  

 

Recent Notable Sales in Olde Town:

102 Third Duplex, Sold to Jeremy Rueggeberg for $165,000 on 5/16/19

222 Ellis, Sold to Kelsey Kalyta for $122,870. (Not yet Recorded, should be soon)

220 Broad Sold to James Demons for $61,465.  They are already renovating and this will be a great home.  

224 Greene, Sold to Emily Beatty for $139,000 (Not yet Recorded, should be soon)

235 Broad. Sold to Shivaun Delisser for $115,000 (Not yet Recorded, should be soon)

Under Contract: 307 Broad.  This was listed by Atul Sinha, appears to be under contract at almost full price.

Under Contract: 224 Broad.  This duplex is under contract at almost full price, and should be closing in the next two weeks. 

 

Rents are also rising.  We’re estimating a $0.20 PSF increase on average across rental units in Olde Town over the last 2 years.  

 

Here’s links to two properties we have listed in Olde Town:

407 Third Street

260 Reynolds Street 

 

What are you seeing in Olde Town?  Are you a resident or tenant?  How has the neighborhood changed?  What changes have you seen?

 

 

The Four Stages of Gentrification

When talking about Gentrification, I think the four stages that Phillip Clay identified in his 1979 book “Neighborhood Renewal” are a helpful gauge:

 

1)Pioneer–Small group of Risk Oblivious Pioneers.  Artists, Designers, Gays, Lesbians.  These pioneers generally renovate homes that are vacant and in bad shape.  These folks are visionaries.  

2)Expanding Gentrification–Risk Takers– Flipper and remodelers move in, start renovating buildings.  

3)Displacement–Risk Neutral–Values start rising, middle class people start moving into neighborhood.  This is when major changes come to a neighborhood.  

4)Mature Gentrification–Risk Averse–The neighborhood becomes desirable, often with new resources and businesses.  Often the original residents and early gentrifiers are displaced.  

 

How are we seeing this in Olde Town now?  We’re seeing single females purchase homes in the neighborhood.  We’re seeing section 8 apartments turned into market rate housing.  We see young women pushing strollers down Greene Street, rather than old women pushing shopping carts down Greene Street (most of those folks are gone now).  The neighborhood is changing quickly.  

 

Do you live in an urban neighborhood?  Where do you think your neighborhood is in this process?  What signs do you see to confirm that?  

 

Helfpul Links:

https://sites.google.com/site/gg2wpdermotmitchell/gentrification-processes

https://www.cnu.org/publicsquare/2018/04/27/%E2%80%98jacobs-curve%E2%80%99-and-gentrification

Downtown Market Update–3rd Quarter 2019

It looks like the market in Downtown Augusta is continuing to improve!  There have been some notable sales downtown, with murmurings of decent deals being considered and hunted for.  It appears that the investors are bullish on Downtown, and that prices have not peaked.  It also appears that although there is talk of a recession, most people don’t believe Augusta will be significantly impacted.  It appears that some notable buildings are potentially transacting–Bonnie Ruben has put her portfolio on the market, and the Lamar building and the Marion building are both said to be under contract.  Ironwood Apartments sold the first week of August, and 1500 apartments are either just delivered or in development.  

 

Recent Notable Sales:

714 Broad Sold to Rafy Bassali at $39.66 per foot

1109 Broad: Security Federal bought the Geneological society for $900,000, or $126.30 per foot

1361 Broad: The Kendrick Group bought this at $170,000, or 42.92 Per foot

401 Greene: Heard Robertson purchased the building at 401 Greene Street to develop into Apartments

701 Greene:  Street sold for 2.5M from DWT Properties (Donnie Thomson) to Greene St Real Estate Investments.  

46 Thirteenth Street–the new Domino’s Pizza sold to Lead Dog LLC

 

Recent Notable Leases:  Notable leases include

Toaste of Augusta @ 722 Broad

State Farm @ 1126 Broad Street

Constantine Engineering @ 608 Broad

Best Lawyers at 801 Broad. 

Not included in the report are leases from the GA Cyber center.  

 

Here’s links to some of our downtown listings:

305 Eighth Street

822 Broad Street

1427 Broad Street

1295 Broad Street

King Mill Industrial

502 Greene Street

 

What are you seeing downtown?  What are your thoughts about the downtown market?  Are there transactions or activity that we’ve missed?  

 

Lease Report

https://presleyrealty.sharepoint.com/:b:/s/PresleyRealtycomTeamSite/EVIesZVZnEhAltvco0V8-FwB-Ce6iFAfIm_06kpH6n6yfw?e=gaAo2Z

Sale Report:

https://presleyrealty.sharepoint.com/:b:/s/PresleyRealtycomTeamSite/EVIesZVZnEhAltvco0V8-FwB-Ce6iFAfIm_06kpH6n6yfw?e=gaAo2Z

 

Downtown Augusta’s Luxury Apartment Boom

Downtown Augusta is experiencing a luxury housing boom.  Over 1500 luxury apartments have just been delivered, are under construction or in planning in and around Downtown Augusta:

    • Ironwood, Downtown North Augusta, 280 units Website
      • Ironwood apartments are adjacent to SRP Park–the Greenjacket’s stadium, with an upscale hotel and retail space, connected to Hammond’s Ferry subdivision. 
    • Residence at Riverwatch, Riverwatch Pkwy: 260 Units Website
      • These apartments were delivered in 2018, adjacent to the Costco Regional Shopping Center, and will walking distance to Topgolf.  
    • Beacon Station, Wrightsboro Rd: 220 Units  Website
      • These apartments are adjacent to the Medical College of Georgia, and a landmark as one of the first market rate apartment projects to be built in the Laney-Walker Neighborhood.  
    • King Mill, Broad Street: 250 Units
      • This is a luxury apartment complex that will be built in the King Mill utilizing historic tax credits and connected to the Augusta Cyberworks.  
    • Train Depot, Reynolds Street: 140 Units
      • The city of Augusta is partnering with BLOC Development to bring these units to market. 
    • Historic Cotton Warehouse, Wrightsboro Rd, 190 Units
      • Burt Development of Albany, GA, bought these in February of 2018.  
      • Plans for Historic Tax Credit development
    • Ivey Apartments, Fenwick Street, 165 Units
  • What do you think is driving the growth downtown?  Do you have any more details about any of these projects?   Have we forgotten any upcoming multifamily projects? What impact will 1500 luxury apartments have on Downtown Augusta?
  •  

3 Multifamily Deal Analysis Considerations

I hear a lot of questions regarding underwriting multifamily deals.  I underwrite a few deals a week and have made lots of mistakes, and thought I’d share some thoughts and a few excel models.

  • Basics: At a minimum, in my opinion, an analysis for small multifamily should include some general information, a rent roll, an operating statement, financing information, and outputs.  I generally like to have two year’s actuals and a pro-forma.  The pro forma is built from the rent rolls.
  • Simplicity: Also, I completely agree with Peter Lynch of A Simple Model–financial models should be as simple as possible.  I also don’t believe that you should use another person’s model–you need to build it yourself and understand it thoroughly.  I’ve seen waterfall models and syndication models that would take an average person weeks to link together.  A mistake or two in that scenario would mean disaster!
  • Cascading Models:  I think it’s generally a good idea to have a simple “napkin” model that can help you determine if a deal pencils in general.  If it works, run it through a slightly more complex spreadsheet.  If that works, get it under contract, get your due diligence documentation, then run it through a more sophisticated model–one that you can print out and present to a lender or potential partners.  This will save massive amounts of time underwriting deals that won’t work.
  • Below are links to a simple model I’ve put together, and more complex models from other websites and blogs.

Presley Realty Simple Spreadsheet

Enodo Spreadsheet

Vertex Spreadhseet

Nelson CPA Spreadsheet

A Simple Model Spreadsheet

What are things you’ve learned underwriting projects?  Do you have questions about financial modeling?  Do you have a great model you’d like to share with others?  

Four Considerations for first-time Multifamily Buyers

Are you considering making an investment in a rental property?  Here are a few considerations to help you, whether you’re thinking of buying a Duplex, Triplex, Quad, or even something much larger as your first investment. 

  • Get good legal advice
    • I can’t stress enough how important it is to find an attorney that you trust who has experience dealing with commercial real estate to advise you in legal matters related to your investments. Your attorney will advise you with questions relating to incorporation, review of purchase and sale agreements, they will close your transactions, and advise you if a lawsuit or issue arises with your rental properties. 
  • Hire a broker to help you evaluate your options
    • For your first transaction, it is a good idea to find a broker you trust to help you find deals and run numbers for you. This is especially important in markets such as Augusta, where duplex deals don’t last very long on the market or trade off-market.  Also, it’s important to have someone who can help you navigate the underwriting process.   
  • Hire a professional property manager
    • It is definitely a good idea to hire a professional property manager to handle your first deal. This also means that likely you will need to add an additional expense to your budget that the seller didn’t have if the property wasn’t professionally managed.  It is always a good idea to interview a few managers, and have a good understanding of how their fees work.  
  • Solid marketing and promotion to lease up your units
    1. Professional pictures, a floorplan, even a 3-d tour—these are things that help listings to stand out and move quickly. Ask your property manager about them, and you may even need to help them put the marketing package together.  Look at your competition—what are other apartments doing to attract tenants? 

If you’re looking to make an investment, what are questions that you have?  If you’re a seasoned investor, what are things you wish someone had told you?

 

This Blog Post: https://presleyrealty.com/four-considerations-for-first-time-multifamily-buyers/ 

Washington Post Article: https://www.washingtonpost.com/business/2019/08/07/what-first-time-landlords-need-know-before-buying-that-rental-home/

National Real Estate Investor Article: https://www.nreionline.com/multifamily/three-keys-avoiding-first-time-multifamily-investor-pitfalls-2019

Teresa  Bradley-Banta’s Blog Article: https://theresabradleybanta.com/5-tips-for-first-time-multifamily-real-estate-investors/

Augusta Crane Creek Apartments sold for $58 Million

Passco Companies announced its purchase of the 300-unit Crane Creek Apartments in Augusta, GA for $58,000,000.  According to Costar, this property traded off-market at a 5.73% Cap Rate with a 5% vacancy at time of sale.  The sale price equates to about $193,333 per unit.   

 

Passco plans to make a a number of improvements to the already luxurious property including LED lighting, Nest thermostats, and energy-efficient toilets and shower heads.  

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How Opportunity Zones are Being Used by Startups

Opportunity Zones are a new tax investment vehicle similar to a 1031 Exchange that allows tax deferment on acquisition of real estate and also on investments in businesses.  This opens the door for small startups to raise funds for their ventures.  Remember that all of Downtown Augusta, Downtown Aiken, and many other city centers in the CSRA are designated as O zones.  

 

See the Forbes Article below for details on how Opportunity Alabama is doing this, as well as an article in Medium by Alex Flachsbart–Founder & CEO of Opportunity Alabama.  Also see Enterprise’s overview of OZone program. 

 

Forbes Article: https://www.forbes.com/sites/cognitiveworld/2019/08/07/opportunity-zones-ai/#2a445e2b6a14

 

Medium Article: https://medium.com/@info_24727/putting-the-opportunity-back-in-alabama-ef305a8b26a

 

Enterprise overview of O-Zones: https://www.enterprisecommunity.org/resources/policy-focus-opportunity-zone-program

 

#opportunityzone #downtownaugusta #cre #investaugusta #multifamily