Financial Performance:
Acquisition Price: $6,000,000
Disposition Price: $5,650,000
Total Capital Invested: $1,760,000
Total Cumulative Investor Distributions: $579,768
Net Sale Proceeds: $1,102,788
Annualized Return on Investment: (.00733)
Description:
Carriage House consists of 12 two and one-half-story buildings situated on 9 acres in southwest Topeka, Kansas. This garden style community features one and two bedroom apartment homes. Common area amenities include two swimming pools, a community clubhouse, on site laundry facilities in each building, and abundant off street parking. Beautifully landscaped courtyards provide residents with a serene setting within the capital city of Kansas.
MPC Strategy:
McKee Private Capital purchased Carriage House in 2008, sourcing equity contributions from ten investors. MPC was able to acquire the property well below replacement cost due to above market vacancy and high delinquencies that existed prior to takeover. Investors enjoyed monthly cash flow distributions during the first six years of operations. However, during the Great Recession, Topeka began to experience economic decline, resulting in a surge of unemployment, and resulting in large numbers of resident defaults. Many of the better qualified residents upgraded to single family home rentals and purchases, made possible by the glut of foreclosures in the market. This major shift had a negative impact on overall property operations and liquidity. MPC ultimately made the difficult decision to take a minimal loss and exit this investment in 2015. We feel it is important to mention that MPC held a majority ownership interest in Carriage House, as is the case with most of MPC’s investments.
