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Case Study | Encore Highpointe Park

Posted on: March 17, 2016 by Auxo Innovations

Case Study | Encore Highpointe Park

$40.8 MM Multi-Family Development – Denver, Co

Asset Class A suburban development, 3-4-story, walk-up, and tuck-undergarages
Acreage / Units 2.9 acres, 220 units
Square Footage Total: 209,093, average unit size: 950
Land Acquisition / Disposition December 2011 /December 2013
Total Capitalization $26.01 mm, $8.5 mm invested equity
Financing / LTV Conventional / 67%
Total Exit Value $40.75 mm, $12.77 mm equity proceeds
  • Land contracted for in April, 2010 prior to construction boom and run-up in land values; $9,000/unit vs. $22,000/unit in 2016
  • Construction costs in 2012/2013 were well below current costs due to early stage of recovery from 2008-2010 recession; built to $100/SF vs. $167/SF in 2016
  • High drive-by visibility just off I-25 drove qualified traffic
  • First new units in North Denver suburb made Encore the only new product in the sub-market

Financial Highlights

Contact Us
Encore Enterprises, Inc.
5005 LBJ Freeway
Suite 1200
Dallas, TX 75009
<a href=”tel:2142597000″214-259-7000

Encore 6162 Case Study

Posted on: March 17, 2016 by Auxo Innovations

$42.3 MM Multi-Family Development – Dallas, TX

Encore 6162 Multifamily Community in Dallas, Texas

In November 2012, Encore began development on a class-A urban infill development minutes away from Uptown, one of most vibrant neighborhood in Dallas for millennials. The project was a 288-unit, four-story wrap design with 215,000 total square feet. Encore possessed a land acquisition advantage due to strong relationships with local land brokers, which provided the company with a “first look” before other developers. Construction costs were locked-in prior to significant escalation in market pricing; the property was built at $102/SF vs. 2016 construction pricing for a similar product at ~$145/SF. The marketing and leasing strategy was driven by the development of a sleek, new, modern building that would attract millennials, and within two and a half years, the project sold for over a 2x equity multiple.

Hilton College Station Case Study

Posted on: March 17, 2016 by Auxo Innovations

$46 mm Hospitality Acquisition & Sale – College Station, TX

Apartments for sale Hilton College Station

Hilton College Station was acquired by Encore in September 2010. It is a full-service hotel, built in 1985, with 303 rooms and over 25,000 square feet of meeting space. Encore identified the asset from an institutional owner in an off-market transaction at an attractive entry price (approximately 50% to 55% of replacement cost). The company recognized strong demand drivers such as proximity to Texas A&M University (3rd largest public university in the United States) and limited competition, being the only convention center hotel in the city. Encore improved operations through the implementation of new policies and procedures and by integrating the Hilton onto Encore’s proprietary IT platform. The company held Hilton College Station for four years, infused over $4 million in capital in value-add renovations, and exited north of a 35% IRR.

Intech 12 Case Study

Posted on: March 17, 2016 by Auxo Innovations

$8.4 MM Office Acquisition & Sale – Indianapolis, IN

Intech 12 Photos Page 1 e1438374419717

Intech 12 is representative of Encore’s value-add strategy in the office sector. The asset is institutional quality, well-located, and a class A office building with convenient access to the airport and commercial business district. Situated in Indianapolis, IN, the area consistently saw a healthy demand for space among large, high-credit tenants due to the region ranking high in most logistics categories (over 75% of the U.S. and Canadian population can be reached within a one-day truck drive). Once acquired, Encore’s strategy was to re-position the building for a single tenant user. Through its relationships in the local brokerage community, the company was aware of several large tenants intending to relocate to Indianapolis within the next 12 months. Encore approached these potential tenants, and during negotiations of a long-term lease with Lowe’s Companies, Encore eventually negotiated the sale of the building to Lowe’s at a substantial profit.

Lakeview Village Case Study

Posted on: March 17, 2016 by Auxo Innovations

$24.0 mm Mixed-Use Retail Development – D’Iberville, MS

Lakeview Village Shopping Center of D'Iberville, Mississippi
Academy
Chili's
Courtyard by Marriott
CVS Pharmacy
Grand Theatre
IHOP
Lowe's
Outback Steakhouse
Tire Kingdom
Walmart
Whataburger

Lakeview Village was developed over several phases and was completed in YEAR with well over 640,000 square feet of retail space occupied by strong national tenants. Located at the intersection of I-10 and I-110, Lakeview Village proved to be a high-traffic location with robust local demographics. The retail center lies four miles from the main entrance of Keesler Air Force Base, which is a significant driver of economic activity in the Gulf Coast, as well as the largest employer in the region and the training base for 40,000 military and medical support staff annually. In addition, the center is only five miles from Beau Rivage, a beachfront MGM Mirage Resort in Biloxi, and is in close proximity to several other Biloxi casinos. In 2014, a new five-lane road expansion was completed to facilitate transportation in and throughout the development. Encore’s close relationship with the city of D’Iberville has helped to drive the growth of Lakeview Village, attract high-quality tenants, increase traffic, and maintain a consistently high demand. While the company still owns a minority interest in a few phases, Encore exited this development project north of a 50% IRR with an average hold period of under 2 years.

Case Study | Multi-Family Portfolio Sale

Posted on: March 17, 2016 by Auxo Innovations

Case Study | Multi-Family Portfolio Sale

$145 mm Sale of 1,392 Unit HUD Financed Portfolio – Southeastern United States

  • In 2010, amid the market downturn, Encore Multi-Family recognized the attractiveness of HUD financing to fund and develop multi-family assets across the Southeastern United States
  • Over the next few years, the Company developed seven Class A, HUD financed properties across Texas, Oklahoma, and Louisiana
  • Encore’s in-house asset management team conducted successful lease-up of all assets and achieved between 94% to 96% physical occupancy across all properties by April 2014
  • In the same year, Encore recapitalized the portfolio through an institutional hedge fund partner, Och-Ziff Real Estate, representing a state pension fund
  • Existing investors exited the portfolio and benefitted from significant capital appreciation while Och-Ziff was able to rollover the HUD financing at an attractive, long-term fixed interest rate
  • Encore retains a minority interest in the portfolio and continues to actively manage the assets

Note: Each of the properties in the portfolio were acquired at different points in time for an average hold period of 3.7 years, therefore Encore does not disclose a specific time period for IRR calculations when presenting portfolio case studies

(1) Loan-to-value calculated by dividing total debt by total capitalization

Financial Highlights

Contact Us
Encore Enterprises, Inc.
5005 LBJ Freeway
Suite 1200
Dallas, TX 75009
<a href=”tel:2142597000″214-259-7000

Case Study | Hotel Portfolio Sale

Posted on: March 17, 2016 by Auxo Innovations

Case Study | Hotel Portfolio Sale

$393 mm Acquisition & Sale of 35 Hotel Portfolio  – 13 States

Transaction Overview

  • Encore partnered with an institutional investor to purchase 35 hotels, focused on Marriott and Hilton brands
  • The institutional investor committed $85 mm in a programmatic joint venture to further expand Encore’s hospitality portfolio
  • Over a 24 month period from 2005 to 2007, Encore utilized $55 mm to re-capitalize and acquire a total of 35 hotels (3,840 guest rooms) in 13 states
  • 33 hotels were affiliated with either Marriott or Hilton, two of the most desired industry brands
  • After evaluating asset and capital market conditions in 2007, Encore decided to cease new purchases and package/sell the portfolio for a total of $393 mm
  • A national Institutional buyer bought 29 of the hotels for $315 mm, while six hotels were sold separately to other buyers for $78 mm

<h3Investment Thesis

  • Opportunity to expand the existing hotel portfolio into attractive markets
  • Geographically diversified with desirably tiered select-service hotels that demonstrated strong and increasing cash flow, offering lower risk/higher yield prospects
  • Homogenous collection of select-service and extended-stay assets with tiered brand stratification
  • Tiered brand stratification allowed Encore the ability to take advantage of high profit margins and consistent demand associated with select-service properties

The Encore Edge

Value Add Approach
  • Nine of the hotels received ~$5,000 per room of capital improvements in 2004, with five of those hotels receiving an additional $5,300 per room of renovations in 2005 and 2006
  • The remaining hotels were renovated in 2006 at $4,800 per key
Margin Improvement Strategy
  • Focus on refining operating standards, policy and procedure implementation, and regional management stewardship while integrating technological and operating systems
Operational Excellence
  • NOI increased by over 35% in 2006 despite disruptions in renovation that occurred at 29 of the hotels throughout the year
Impeccable Market Timing
  • After evaluating asset and capital market conditions in 2007, Encore decided to sell the hotel portfolio immediately before the economic downturn resulting in $183 mm profit and a 3.6x equity multiple

Note: Each of the properties in the portfolio were acquired at different points in time for an average hold period of 3.7 years, therefore Encore does not disclose a specific time period for IRR calculations when presenting portfolio case studies

(1) Loan-to-value calculated by dividing total debt by total capitalization

Financial Highlights

Contact Us
Encore Enterprises, Inc.
5005 LBJ Freeway
Suite 1200
Dallas, TX 75009
<a href=”tel:2142597000″214-259-7000

Hospitality Acquisition in Florida

Posted on: March 16, 2016 by Auxo Innovations

Hampton Inn, Tampa

Hospitality Acquisition in Florida

Hospitality acquisitions have the potential to be a great investment if the locations are managed correctly. Proper marketing outreach for acquisitions is obtained through strategic media placement, and the ability to always improve the location from where it began.

Hospitality Acquisitions in Tampa, Florida

Encore Hospitality highlights the Hampton Inn, located in Tampa, Florida as a great example of this. This hotel acquisition occurred in 2005, located near the Tampa International Airport, and offers many amenities for its guests.

Hospitality Acquisitions in Fort Meyers, Florida

The Best Western in Fort Meyers, Florida was a hospitality property Encore acquired in 1999. This property’s location is what made it an attractive investment choice. Offering easy access to the waterfront and close proximity to downtown Fort Meyers made this hotel acquisition desirable. We brought our leadership team in addressing the strengths and weakness of this hotel and managed the property for 8 years. When we felt the time was right and the value of the business had increased from our management efforts, we sold the location in 2007.

The Encore Hospitality Team

Our Hospitality Management Team is ranked in Hotel Business’s Top 50 hotel Developers and Owners in the nation and the team can quickly recognize the strengths and weakness of a potential acquisition location. When acquiring a hospitality location it is important to consider all of the existing strengths such as current staff, policies and procedures and to eliminate those that pay potentially hinder success.

Utilizing these key principles along with our leadership team’s industry knowledge, we continue to strengthen the overall business model for this location including the quality of service, and customer satisfaction.

If you would like to know more about Encore Hospitality, the current investment opportunities we have or general information about our hospitality services you can contact us.

If you are considering putting your hospitality location on the market, please visit our acquisitions page.

Encore Hospitality Adds Harrisonburg Hotel to Portfolio

Posted on: March 10, 2016 by Auxo Innovations

Harrisonburg Hotel

(Harrisonburg, VA) March 10, 2016 – Encore Hospitality, LLC, a subsidiary of Encore Enterprises, Inc., recently purchased a hotel in Harrisonburg, VA. The 4-story, 140-room hotel currently operates as a Holiday Inn, but will be converted to a DoubleTree, after extensive upcoming renovations to satisfy Hilton brand standards.

“We are excited to acquire this new hotel for our growing portfolio,” said Chairman of Encore Enterprises, Inc. Dr. Bharat Sangani. “We are excited to continue to grow our relationship with the Hilton franchise in this new location.”

Encore plans to invest $50,000 per room to completely upgrade all aspects of the hotel including guest rooms, meeting rooms, lobby, lounge, exterior of the building, landscaping and the pool area. Once the renovations are complete, the hotel will take on the DoubleTree by Hilton name, offering all the perks of the Hilton brand and the Hilton HHonors program.

Located in Harrisonburg, VA just a mile away from James Madison University and located off of a major interchange that provides convenient access to Downtown Harrisonburg as well as Shenandoah National Park and George Washington National Forest, the hotel is centrally located for sightseeing. The hotel will also provide a new wedding and social event venue in the area as it is the only full-service hotel in the market.

“Converting this hotel to a full-service DoubleTree provides much desired hotel services to the Harrisonburg area,” said Glenn Pedersen, President of Encore Hospitality. “We look forward to investing in the renovation of the hotel so it can add to the amenities offered in Harrisonburg unlike any other hotel offers in the area.”

About Encore Enterprises, Inc. – Encore Enterprises, Inc. is a privately owned national real estate company founded in 1999 with corporate headquarters in Dallas, Texas. Encore develops, acquires, and manages hotels, multi-family communities, retail shopping centers, commercial offices, and public-private mixed use developments.

About Encore Hospitality, LLC – Encore Hospitality, LLC is a subsidiary of Encore Enterprises, Inc., and was founded in 1999 as a fully integrated, hospitality acquisition, development and asset management company focusing on the upper mid-priced, nationally branded select-service and full-service hotel sector. For more information about Encore Hospitality, LLC, visit encorebz.wp.brainvire.dev, or call (214) 259-7000.

Florida Investing | Apartments for Sale

Posted on: February 19, 2016 by Auxo Innovations

Multi-Family Properties For Sale, Florida Investing

Apartments and Multi-Family Properties for Sale and Investor Demographics

When it comes to investment opportunities in apartments and multi-family properties in the United States, there has been a very high trending pattern of investors which consist of individuals and retirees from the state of Florida. Additionally, there has been an increasing trend of money managers who represent Floridian retirees as they look into apartment projects that are for sale as well as new development projects.

Encore Multi-Family, LLC, a subsidiary of Encore Enterprises, Inc., has always seen a large demographic of clients who are from New York and California. However, the growing trend of investors who are from Florida can be attributed to these three factors: trends, geography, and motivations.

Florida Investing Trends | Apartments for Sale

For years, individuals and money managers have known that investing in apartment and multi-family properties has become a positive trend. Additionally, Encore Multi-Family, LLC and past investors understand that any investment is a risk, with no guarantees and no past projects can reflect the outcome of future projects. To learn more about past and current projects, visit Encore Multi-Family’s portfolio.

Florida Investing Geography | Apartments for Sale

With a warm, tropical climate as well as a strong tourism industry, Florida has always been an attractive state for individuals and retirees to live in. Additionally, a growing number of baby boomers who are nearing retirement are now moving into or spending a good portion of their time in Florida. Increased investor interest coming from the state of Florida isn’t a big surprise; Florida has always been an attractive state to live and retire in.

Florida Investing Motivations | Apartments for Sale

Encore Multi-Family, LLC acquires apartment properties which are sold from all over the United States. Additionally, following rigorous guidelines has enabled Encore Multi-Family to establish a strong and respectable portfolio. Encore Multi-Family is proud to recruit great leaders and establishing an industry-proven management that will foster growth in the multi-family sector for years to come. To learn more, visit Encore Multi-Family’s management team.

Florida Investing Geography | Apartments for Sale

Increased investor interest coming from the state of Florida isn’t a big surprise. Florida has always been an attractive state to live and retire in. We also believe that an increased number of baby boomers are now retiring and moving or spending a good portion of their time in Florida.

Florida Investing Trends | Apartments for Sale

Money Managers and Individuals have collectively know for a number of years now, that investing in apartment / multi family properties has been trending investment. Encore Multi-Family, LLC and our past investors know that any investment is a risk, with no guarantees and no past projects can reflect the outcome of future projects. You can view both past and future projects in our multi-family portfolio here.

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