Oakwood Apartments, Jacksonville, Arkansas

Oakwood Apartments
Jacksonville, Arkansas

Address: 1310 Smithwick Dr.
Jacksonville, AR 72076

Year Built: 144 Units – 1972, 96 Units – 1986

Number of Units: 240 Units

Unit Mix:

• 108 1BD/1BA
• 48 2BD/1BA
• 78 2BD/1.5BA
• 3 1BD Townhouses
• 3 3BD Townhouses

Property Size: 18 Buildings

Structure:

• Exterior: Brick Veneer and Vinyl Siding
• Roof: Pitched – Composite shingles, Flat Roofs – Rubber membrane  with composite shingle/metal mansards.
• Parking Lot: Sealed blacktop (2 spaces per unit)
• Windows: Single pane, aluminum frame
• Plumbing: Copper

The 240 unit Oakwood Apartments is located in Jacksonville, Arkansas, a stable suburb of Little Rock. Its seconds away from Little Rock AFB, the nation’s primary C-130 training facility. Its in close proximity to the brand new Jacksonville High School development, considered to be a game changer for the community of 30,000. The new school and newly zoned school district is expected to bring in millions of dollars of state and federal funding, along with interest from families around Arkansas and major retail developers.

Overall, the buildings are in very good condition. Of the 18 buildings, 10 have new roofs that have 15-20 years left on them. While the roofs on the other 8 buildings are in good condition, they may need new roofs over the next 3-5 years based solely on the “warranty life” of the roofs. A roof reserve has been set aside to budget for their replacement. Other than those roofs, inspections revealed initial repairs totaling $25k to do some fencing around the property’s boundaries and some minor external work.

The same brokers who found the Colony West Apartments and the Towne Oaks Apartments introduced the Oakwood Apartments. The fund was given first shot at the property before it was actively marketed. During the final stages of due diligence, the market rents were found to have increased quite a bit since the initial projections. Following the final review, the property was acquired for $6,550,000 in July 2016.

After adjusting for additional upfront CapEx required, higher year two rents, and securing a lower interest rate on the loan (4.35%), the year one cash on cash return on investment is projected at 20.5%, and is projected to increase to 30.2% in year two.

In addition the projected cash on cash returns, there is land available that adjoins the property for future development. One tract is included with the property and is zoned for another 40 units, creating a potential future opportunity to build on that parcel. Trinity Multifamily who serves as the property manager indicates the new units designed for this market could be built for $29k per unit all in (not including land). This development opportunity would be in addition to that offered by the existing 240 unit Oakwood Apartments.