Graceada Partners is pleased to announce the acquisition of Tyner Ranch Townhome Community, a pioneering build-to-rent single family rental neighborhood built in 2007. The 168 home community consists of 17.5 acres on Chimayo Street, La Posta Street, and Montaro Court in Bakersfield, California. Each unit has a private garage, driveway, and back yard and current in-place rent is an estimated 23% below market. The property was purchased for roughly $183,600 per home.
“We see strong demand for this type of property—and Kern County more broadly—in the coming years,” said Joe Muratore, Co-CEO with Graceada Partners. “The concept of a single-family rental community is growing in popularity today, and we are able to buy this innovative neighborhood, built in 2007, well below replacement cost.”
In-place rents average $1,160 per month, whereas market rents are 23% higher at $1,430 permonth. The underwritten IRR is 20.04% with an equity multiple of 2.41x over a 5-year hold period. The community is located less than one block from the Oswell Street exit on California Highway 58, offering optimal access to all of Bakersfield and Highway 99.
Graceada Partners plans to modernize the interior and exterior look, as well as operations of the property, and plans to bring rents to market as a result. The firm will be installing modern drought-tolerant landscaping, introducing RUBs (ratio utility billing system), and establishing a more tenant services approach to management. With the changes, Graceada Partners anticipates a strong increase in the value of the property as well as increasing net operating income.
“This property has not received any interior or exterior updates since construction in 2007,” added Ryan Swehla, Co-CEO with Graceada Partners. “We look forward to modernizing this single-family neighborhood and increasing the quality of life for all who call Tyner Ranch their home.”
This acquisition is an investment from Graceada Partners Fund III.