CITYSOUTH
San Mateo, Calif.
CITYSOUTH
ROOM RENOVATED: Resident lounge
SIZE: 3,800 square feet, including the attached gym
CHANGES: Everything; building was taken down to the foundation and rebuilt with a new, edgy, stained-concrete floor, walls, windows, ceiling, lighting, furnishings, gas fireplace, flat-screen TV, and Wi-Fi
COST FOR IMPROVEMENTS: NA—company does not break out investment per each amenity area
INVESTMENT PER UNIT: $106,000
RENTS AFTER REHAB: Studio, 563 square feet, $1,800; one-bedroom, 550 to 600 square feet, $1,950; two-bedroom, 800 square feet, $2,600
RENT INCREASE PER UNIT: $700
PRE-REHAB OCCUPANCY: 95 percent
POST-REHAB OCCUPANCY: 96 percent to 97 percent expected when last building is completed
COST PER SQUARE FOOT/ROI: NA/8 percent to 10 percent
MFE ARI: A
THE SITUATION: A complex of five, 40-year-old buildings on nine areas in the hot Silicon Valley job market, in an area without many prime rehabbed properties, and close to U.S. Highway 101. Add proximity to San Francisco and San Jose, and the property seemed to just be waiting for an upgrade to stand out, increase rents, and up its class status.
THE CHALLENGE: The issues were twofold: 1) How much to increase monthly rents yet still come in $200 below what competitors charge; and 2) how to fix up the buildings to move them from B- or C status to A or A-, says Jerry Davis, senior vice president of operations at CitySouth’s developer/manager, UDR. Sustainability was also a goal.
THE RESULT: UDR decided to introduce a brand-new, contemporary look that would wow prospects. The firm achieved the look with a reskinned exterior, new shared amenities—including a swank indoor resident lounge to encourage mingling—and revamped individual apartments. “We knew this market, and that renters don’t stay in their apartments that much, but want to enjoy common areas and the outdoors,” Davis says. To meet the demand for green, UDR included energy-efficient windows, water-conserving fixtures, and an efficient irrigation system. The remodeling enabled UDR to raise monthly rents $700 and be awarded a 2011 MFE ÂDesign Award for apartment renovation.
