Savannah Ridge Apartments - Savannah Ridge is a 290-unit, 246,300 SF, Class B apartment community developed in 1974.  The subject consists of 3 two and three-story building groups and the site offered numerous amenities including a hillside swimming pool with sundeck, lighted sports court, controlled access gates and UT shuttle access.  Savannah Ridge benefits from an excellent in-fill location in Austin's prestigious Northwest Hills, just 10 minutes north of the CBD and the University of Texas.  Single-family homes in the area average approximately $400,000, with some valued at more than $1 million.

We purchased this asset off market utilizing a key broker contact.  The seller was a family partnership out of Oregon who purchased the property in the early 1990s.  They were interested in selling this asset in order to exchange the funds into a development deal in the Pacific Northwest.  Savannah was the seller's only asset in Texas and their focus had suffered as a result.

Savannah Ridge was well occupied when we bought the property but the seller had not kept up with the market in terms of rents.  Due to the fortunate timing of our off-market purchase, we were able to buy this complex in early 2005 for less than $55,000/unit which was a 7.0% cap rate on the in-place rents.  Our strategy was to more specifically target the UT student demographic by implementing a modest cosmetic improvement to the common areas and implementing student oriented services (computer lab, resort pool, etc.) to attract these residents.


We quickly stabilized the occupancy at 96% during the 2005-2006 school year and staggered lease expirations so that our seasonal occupancy decline bottomed at 90% (rather than 75% for previous management).  Our targeted marketing approach to the UT student demographic allowed us to push rents from approximately $0.80 per square foot acquisition to near $1.00 per square foot in two years.  Recognizing an improved investment climate in 2008, we sold the asset for almost $70,000/unit at a 6% cap rate.  Our 39-month hold period generated a leveraged internal rate of return in excess of 25%.

7421 Burnet Road, Suite 300-291, Austin, TX 78757

 512.590.8315 phone             512.590.8313 fax