The Paragon @ Kierland Apartments

Scottsdale, AZ

Tipton worked with one of our clients to identify and underwrite the purchase of the Paragon at Kierland apartments in Scottsdale, AZ. The property is a 276 unit, class A multifamily property located on approximately 10 acres immediately across the street from the upscale Kierland Commons outdoor shopping center. In addition to the proximity to the shopping center, the property also had exposure along the Western side to the golf course at the Westin Kierland Resort and Spa. Tipton performed all due diligence for the purchase of the property and took over the management of it when it closed in January of 2010. Tipton accomplished the following during the almost 4 years that we managed the property:

• POOL RENOVATIONS – Extensive renovations were completed at the pool area, including plaster, waterline tile, installation of an outdoor fire pit, upgrade of the existing outdoor kitchen, and purchase of new pool furniture.
• FITNESS CENTER – The property fitness center was updated with new, state of the art fitness equipment, flooring, paint and large HD televisions.
• OFFICE/CLUBROOM – The dated furnishings in the leasing office and clubroom were replaced with modern furniture and accessories, providing a look that was similar to the new construction apartment properties in the North Scottsdale submarket.
• LANDSCAPING/EXTERIOR – Existing landscaping was enhanced with the stated goal of providing more “color” in several areas. Everything was done in conjunction with very specific and strict HOA regulations.
• UNIT UPGRADES – Specific unit upgrades were implemented in conjunction with increased rent premiums for those upgraded units. Upgrades included new appliances, faux wood flooring, cabinet fronts in select units, designer mirror frames, new lighting fixtures and updated plumbing fixtures and hardware.
• MARKETING & LEASING – An extensive marketing and leasing effort was implemented that resulted in consistently high occupancy and increasing rents, despite the softness in the Phoenix rental market at that time.

CONCLUSION – The timely purchase of the property, coupled with property improvements and unit upgrades implemented by the Tipton team resulted in significantly increased occupancy, rents and NOI. The property was sold approximately 4 years later and at a price that was 70% HIGHER THAN THE ORIGINAL PURCHASE PRICE. RETURN ON ORIGINAL CAPITAL WAS IN EXCESS OF 400% OVER THAT 4 YEAR TIMEFRAME. X

TRAILS AT RIVER PARK

ARLINGTON, TX

We assisted our client who purchased the General Partnership interest in this 1980's "C" class asset. Their agreement provided that the new GP would provide the funds necessary to address deferred maintenance issues at the property, improve performance of the property through a management change and position it for a sale within 2 - 4 years.

• PROPERTY CLEANOUT - Physical occupancy was reported at 92% by the prior management company, but economic occupancy was only 65%. Tipton evicted dozens of residents who were delinquent several months and worked with others to bring their accounts current.
• DOWN UNITS – Our team immediately assessed what was necessary to bring several down units back online and proceeded with the necessary repairs to make that happen. Several of the down units had been damaged by fire and never renovated by the prior owner.
• REBRAND PROPERTY – The property was rebranded as the “TRAILS at RIVER PARK” in order to highlight the proximity to the RIVER LEGACY PARK in which the property was adjacent. An entry was established into the park from the North side of the property and advertising was created to highlight the property's location relative to this major amenity.
• PHYSICAL RENOVATIONS – A capital improvement plan was identified with input from Tipton senior staff, the Tipton Regional Supervisor who oversaw the property, the Tipton Maintenance and Construction Supervisor, and in conjunction with involvement and input from our client and their asset management team. Deferred maintenance that was addressed included exterior carpentry & paint, asphalt parking lot repairs, drainage, roofing, replacement of boilers, repairs to retaining walls throughout, new signage and updates to the clubroom/rental office/laundry facility and pool areas.
• CANCELLATION OF BULK CABLE TV CONTRACT – Tipton was successful at negotiating the cancellation of a bulk tv contract that had 8 years remaining on the existing term. That contract cancellation directly decreased annual operating expenses by over $150,000 and also removed a significant impediment to leasing. Tipton was successful at getting the contract cancelled in conjunction with the renewal of access and marketing agreements with the same provider across several other properties in our managed portfolio.
• INCREASED OCCUPANCY & RENTS– The new Tipton onsite team was successful at increasing occupancy (both physical and economic) into the mid to high 90's and increasing both market and effective rents. The increased collections and lower expenses resulted in a significant increase in NOI and helped position the property for a successful sale.

CONCLUSIONTipton's client successfully marketed the property for sale approximately 3 years after our initial takeover and two years after the successful completion of the repairs to address the deferred maintenance issues and make improvements to the property and units. AS A RESULT OF THEIR SALE OF THE PROPERTY – OUR CLIENT REALIZED A 250% GAIN ON THEIR INVESTMENT OVER A 3 YEAR TIMEFRAME.

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ENGLAND GROUP PORTFOLIO

DFW/HOUSTON/BERMUDA DUNES CA

Tipton was initially retained when the England Group purchased Fieldcrest Apartments (180 units built in 1984) in Carrollton, Texas in the summer of 1994. Tipton successfully implemented a property renovation plan on that property that included new Hardi siding, exterior paint, major asphalt parking lot repairs, clubroom renovation to include the creation of a fitness room as a new amenity, major improvements to the pool area, and retaining wall repairs throughout the property. Tipton's performance on this assignment resulted in our being awarded the other assets owned by the England Group in the DFW area, Houston and in Bermuda Dunes CA. From 1997 through 2013 Tipton managed 3000+ units (both A and B quality properties that were built between 1984 and 2003) for the England Group and was instrumental in the eventual sale of their portfolio. The following represents a brief summary of what was accomplished on that portfolio during the time we managed:

• ADDITION OF COMMUNITY AMENITIES - On the 1980's vintage assets - Tipton identified amenities that could be added in order to increase the marketability of the properties and attract the highest quality residents. Those amenities included the addition of fitness centers, business centers, outdoor kitchens and grilling areas, sand volleyball, artificial putting greens, walking trails, carports and garages and other common area improvements.
• MAJOR CAPITAL RENOVATIONS/REPAIRS - Tipton bid and supervised major renovations on the properties, including, Hardi siding replacements, roof replacements, boiler replacements, stone wall installations to replace original railroad tie retaining walls, updating of clubrooms and leasing areas, major concrete and asphalt repairs, fire renovations, pool renovations/upgrades and other major capital renovations as needed.
• INTERIOR UNIT UPGRADES - Tipton recommended and then implemented approved upgrades to the unit interiors as a part of an aggressive plan to push rents higher and attract the highest quality residents. Those upgrades included the installation of microwaves to replace original vent hoods in kitchens, installation of kitchen tile backsplashes, appliance upgrades, installation of faux wood flooring, and updating of fixtures, cabinets, and hardware.
• ANNUAL GENERAL MEETINGS Tipton participated in our clients' Annual General Meetings and gave PowerPoint presentations to update individual investors on the rental markets where the properties were located and the specific performance of each of the properties. These meetings were attended by thousands of investors over the years that Tipton managed the England Group portfolio.
• TAX PROTEST AND INSURANCE PROCUREMENT - Tipton was directly involved in hiring and supervising tax consultants who were engaged to evaluate property tax values and protest them as we determined was necessary. Tipton also directly negotiated insurance renewals annually for the properties individually and eventually as a blanket coverage policy for the entire portfolio.

CONCLUSION - Tipton's CONSISTENTLY ABOVE AVERAGE PERFORMANCE resulted in above average returns for our client and their investors and contributed to a successful sale of the portfolio at a price significantly higher than anticipated. X

ONE SUMMER PLACE

DALLAS, TX

Tipton was awarded the management and leasing assignment for the One Summerside Place office building in North Dallas in 1991. The building was a Class "B", two-story suburban office building located in the Far North Dallas market area, approximately 1 block west of Preston Road. The building was owned by the Resolution Trust Corporation ("RTC") and was part of a commercial portfolio that they were trying to position for a sale. The building was 65% occupied at the time. Tipton accomplished the following within the first 10 months of our takeover of the management and leasing of the property:

• PROPERTY CLEANUP - The property had suffered from neglected management and needed a number of physical improvements. Dead landscaping was replaced at the entrance to the building and landscape enhancements completed throughout the property. All vacant spaces were cleaned and minor repairs completed to ensure that they were in the best possible physical condition when they were being shown to prospective tenants.
• NEW COOLING TOWER - Tipton created a scope of repairs then bid out necessary HVAC repairs and the replacement of the building's AC cooling tower that had been a source of frequent malfunctions along with inconsistent HVAC performance. The AC issues had contributed to weak occupancy at the property. Tipton supervised the repairs to the AC system, the installation of the new cooling tower, and its startup. That replacement greatly improved tenant satisfaction with the existing building tenants and reduced overall operating expenses.
• ANCHOR TENANT RENEWAL - As a result of the physical improvements to the HVAC system and aesthetics of the property, Tipton was successful at securing a long-term lease renewal with the building's largest tenant, an engineering firm that had threatened to move. Had they moved, the occupancy of the building would have dropped to less than 20%.
• MARKETING & LEASING - Extensive marketing and leasing efforts were implemented that resulted in the majority of the vacant space in the building being leased. Occupancy increased from 65% at takeover to 95% within 14 months of Tipton's takeover.
• SUCCESSFUL SALE - Tipton's brokerage division procured a buyer for the property and the property was sold in late 1992, approximately 16 months after we were initially given the assignment.
• TIPTON RETAINS MANAGEMENT/LEASING - The buyers of the property were so impressed with Tipton's management and leasing success, and the smooth operation of the building, that we were retained to continue the leasing and management for them.

CONCLUSION - Tipton's ability to quickly address physical deferred maintenance resulted in a long-term renewal by the building's anchor tenant. That was the catalyst that led to additional leasing successes which took the building's occupancy to a level where the property was successfully marketed and sold. The improvements were completed and the sale consummated on behalf of our client much sooner than they had originally planned or anticipated. X