Asset Spotlight: Wobbe Lane Apartments

Is Northwest Arkansas the powerhouse of multifamily investments? Based on our first 12 months of ownership, we’d like to think that Wobbe Lane Apartments is reinforcing the idea that smaller, unsaturated markets should have a place in the hearts of multifamily investors.

New Sight Capital was partner in a group of syndicators who acquired Wobbe Lane Apartments in late April 2022. Wobbe Lane has a total of 256 units. Phase I (128 units) was constructed in 2008 and Phase II (128 units) was constructed in 2021. Our goal is to deploy a little over $1m in capex to renovate Phase I interiors to match the finish of the new Phase II units. We’re pleased to report we’ve seen significant progress on these rehabs to date.

As of this article (June 2023), the property is 95% occupied and 98% preleased– with healthy positive cash flow and favorable reviews on all the major renting platforms and Google.

We’re also pleased to report that we are exceeding our target rents for new leases and lease renewals. We owe a huge part of that success to the amazing Ghan & Cooper, who is our onsite property management company. Having worked with a many property management companies, it’s a blessing to work with one that outperforms like Ghan & Cooper has on this asset. Their attention to detail and community development at the property is essential.

Our projected hold period for this asset is 5 to 6 years. Prior to closing we projected investor distributions to begin 6 to 12 months. Given the performance of the asset, we’ve already been able to pay 3 rounds of quarterly distributions to our investors. We’re encouraged by the performance so far at the asset with respect to meeting long term return objectives for investors.

What’s making this asset such a strong performer in the New Sight Capital portfolio? We think it owes to several factors. First, this market of NW Arkansas is not overly saturated with syndication operators. This “blue ocean” has allowed favorable entry point pricing for acquisitions as well as attractive onramps for growth in revenue and valuations. Secondly, this market is not oversaturated in terms of supply, which allows for more robust rent growth. Another factor has been such strong execution as the asset management and property management levels. The underwriting has proven very accurate and the asset business plan execution has been very favorable—not to mention the work of Ghan & Cooper onsite. Essentially, there’s a lot to be said by a well working partnership, which is the driving force of many apartment syndications.