BEACON LAKE APARTMENTS INVESTMENT
The purpose of this Confidential Investment Offering Overview is to provide a summary of a possible future private investment opportunity that may be made available to a certain limited number of accredited investors. This is not an offer to sell real estate and/or any type of security, partnership interest, public or otherwise.
The contemplated offering provides Investors with the opportunity to acquire an interest in an existing apartment community, Beacon Lake Apartments, consisting of 240 garden-style units located in Mason (East Lansing), Michigan. Home to Michigan State University, and Michigan's state capital, the Property is situated in the Mason submarket, one of the most desirable in the East Lansing market, known for its strong schools, central location and easy access to major employers. This community represents an ideal value-add real estate investment due to the fact that the asset is situated in a central location and has been owned and operated by the original local developer for more than 22 years, who lacked the motivation to increase rents and marketability by investing the necessary capital to enhance the Property. The apartment community has a history of stable performance with a current occupancy of 100%, and a 40 person waiting list.
This Property affords Investors the opportunity to invest in a stabilized, cash flowing, well-located asset that has a history of consistent performance with the ability to increase effective rents through extensive interior renovations and amenity improvements. The Property's historically strong occupancy, solid location and physical attributes combine to make it the most desirable apartment community in Mason. The additional capital investment will further enhance the Property's competitive position and solidify it as one of the best-in-class communities in its asset class and greater East Lansing Submarket.
Our investment partner, responsible with repositioning this apartment community, is Highgate Capital Group, LLC. Highgate, based in Chicago, is managed by John Kinzelberg and Jeff Katz, who have over 27 years of real estate experience between the two of them. To date John has acquired over 3,800 multifamily units, and Jeff has been part of a team that has purchased and sold more in real estate assets. Since founding Highgate in 2012, they have acquired over 1,500 units.
Beacon Lake was built in 1994 and consists of 48 one bedroom units and 192 two bedroom units within 15 buildings along with a leasing center and clubhouse. There is a total of 234,400 rentable square feet located on 17.7 acres. Amenities include two scenic lakes, an outdoor pool with sundeck, a clubhouse, fitness center, community garden, picnic area and gazebo, and enough carports for every unit. Highgate plans to make aesthetic upgrades to interiors, as well as updates to the landscaping.
The city of Mason is a vibrant area known for great schools, central location and easy access to major employers, including Michigan State University, the extensive local hospital network and state government. With its proximity to US-127, residents have a short drive to many key employers such as Dart Container, Gestamp, Jackson National Life Insurance, Delta Dental Insurance, and several other large corporations.
Like many Midwestern cities, Lansing has undergone a transformation from an industrial heavy jobs focus to a more diverse economy through broad based public and private sector employment gains. The federal, state and local governments employ approximately 60,000 people giving the state capital one of the highest concentrations of government jobs in the country. In addition to its 12,000 employees, Michigan State operates University Corporate Research Park, which serves as a network to some of the world's top research and development facilities. Healthcare is also an important part of Lansing's growing economy with Sparrow Health, McClaren Health, Community Health and Delta Dental employing nearly 14,000 people and includes Sparrow's $285 million investment in the region over the past five years. As a result of all these private and public sector employment drivers, as of October 2016, the Lansing unemployment rate was 3.6%, well below the national average of 4.9% for the same period.
Beacon Lake is the newest product in the Mason submarket and there is no new multifamily development projects planned currently. Given Mason's growing employment base and extremely limited multifamily supply pipeline, stable rental revenue growth and tight vacancy rates should persist.