Briarwood Park Apartments

Briarwood Park Apartments
Jackson, Mississippi

Address: 167 Briarwood Drive
Jackson, MS. 39206

Year Built: 1980

Remodeled: 2015

Number of Units: 80

Unit Mix:

• 60 1BD/1BA
• 20 2BD/1BA

Property Size: 10 two-story buildings

Structure:

• Exterior: Brick veneer and vinyl siding over wood framing
• Foundation: Poured concrete slab
• Roofs: Asphalt shingle
• Parking Lot: Concrete

Located in Jackson, the largest city and capital of Mississippi. The Jackson Metropolitan Area, known as “The Crossroads of the South,” has a population of 576,000 people, and is located in an area encompassing the intersection of two major interstate highways, I-55, running north and south from Chicago to New Orleans, and I-20, which runs east and west from South Carolina to Texas. With its strategic location, Jackson is a major distribution center, has eleven hospitals, and is home to ten air carriers. Jackson is the leader in healthcare in Mississippi, has more colleges and universities than any other area of the state, and is the state’s center for government and law and the performing arts.

Briarwood Park is strategically located next to major highways and the area’s top employers. It’s within three miles or less of three shopping centers and a mall, which combined total 1.9 million square feet of retail space, and just north is Nissan Motor Company’s $1.4 billion manufacturing facility that employs more than 5,000 people. Estimates say the plant could create as many as 26,000 direct and indirect jobs in the area.

The barriers for competition entering this market are high. The Jackson MSA has approximately 20,000 apartment units. Less than 3% of this total supply, or only 600 units, have been constructed since 2005. Outside of small, in infill developments downtown, all of the municipalities have effective moratoriums on new multifamily development. As a result, virtually no multifamily has been delivered in the Northwest submarket in over 13 years. The negative sentiment towards new multifamily development by the local municipalities provides an excellent opportunity for well- located assets with sound operating fundamentals.

Briarwood Park is another off-market deal brought to the fund by a property management company, and was successfully purchased substantially below the cost of replacement from a private seller. It was acquired on March 31, 2017 for $3.625 Million. The property has had over $2 Million in recent renovations. Each building features new roofs, windows, doors, siding, railings and painted exteriors. The interiors of each unit were upgraded with new appliance packages, fixtures, countertops and flooring. In addition, the property has a re-surfaced parking lot with a new-gated entrance, enhanced landscaping and a remodeled clubhouse

Briarwood Park immediately meets our criteria for return. At current rents, the acquisition cap rate is 7.85. With the benefit of a first year interest only loan, cash on cash return on investment (“ROI”) is projected to be 19.4% during year one. Although principal payments begin in year two, its anticipated those increased payments will be offset as management takes over and increases rental rates. As a result, the year two cash on cash ROI is projected to remain strong at 15.6%, and overall the 10-year IRR is projected to be 28%.