Los Angeles-based GRESHAM, OR – Gelt Inc., a real estate investment and asset management firm, purchased Powell Valley Apartment Homes of 228 units approximately four years ago. In his second purchase in Gresham, Gelt recently acquired Silverwood Apartments, a 164-unit property at 4777 SW 11th St., for $ 30 million.
"The acquisition of Silverwood Apartments during the COVID-19 crisis required a much more conservative forecast for this asset," said Jeff Harris, a partner at Gelt. "However, depending on the solid basis for which we bought the property, a strategic business plan to generate significant value and a desirable interest rate, we were able to forecast total returns that met our desired return requirements."
Over the next several years, Gelt plans to make improvements to the unit's interior to include new vinyl plank floors, stainless steel appliances, new closet space, backsplash, ceiling fans, and other cosmetic enhancements. The company will also rename the asset, create new signage, paint the exterior of the building, and freshen up the pool and playground area.
Built in 1991, the garden-style parish occupies just under 9 acres and includes 32 buildings. It consists of 159 two bedroom units, three one bedroom units, and two three bedroom units. The property has a pool, playground, hiking / biking trails and a picnic area.
"We are cautiously approaching this new economic environment, but we continue to rely on favorable fundamentals for apartment buildings over the long term in markets with employment and population growth," said Josh Satin, director of acquisitions at Gelt. "We aim to acquire $ 250 million in assets over the next 12 months."
HFO's Tyler Johnson, Rob Marton and Greg Frick represented Gelt and the seller, a private individual who owned the property for more than 25 years.
"This property offers a rare 100% value opportunity in the coveted Gresham market," said Johnson.
Bordering Portland's eastern edge, Gresham is Oregon's fourth largest city with a growing population of more than 110,500. Greater Portland has an educated and skilled workforce, affordable high quality of life and low business costs. The headquarters of the Fortune 500 companies Nike and Lithia Motors are located here. Fortune 1000 companies headquartered here include Columbia Sportswear, Greenbrier Cos. And Portland General Electric.
"Gelt is looking for ways to expand our multi-family portfolio in the Portland area in addition to other major western US markets," Harris told GlobeSt.com. “Prior to the COVID-19 crisis, a significant portion of the millennial demographics chose to delay home ownership. Now even more so, we see this trend continue in these uncertain times. Despite all of this, we anticipate continued strong demand for tenants in this sector and we are committed to improving suburban communities that attract residents who seek quality living in a convenience-rich environment. "
According to a study by RealPage, significant price reductions in Western Region markets are reducing overall U.S. rental production as the Bay Area metros, most of southern California and Portland, are also seeing sharp negative numbers.