Acquisition of below-market Class B/C portfolio in rapidly growing metro.
The Velocity Capital Group recently acquired a portfolio of 171 off-market units in the Clarksville market in Tennessee. The portfolio included 3 apartment complexes and 25 quadplex/duplex buildings in Clarksville, TN and Oak Grove, KY purchased for 40% under market value from a private seller.
Clarksville has maintained strong economic indicators: population growth (9.54% in last 3 years), 3-year rent growth of 55%, job growth of 3.5%, low vacancy rates of 3.80% and income growth of 3.20%.
Clarksville has enjoyed a surging economy in recent years. Employment growth is outpacing the national rate, and unemployment is on par with the U.S. average. The metro continues to benefit from Fort Campbell’s presence, but job gains in the manufacturing, retail trade, and professional and business services sectors have driven the economy the past several years.
Velocity Capital Group Strategy
VCG acquired the property with the goal of improving on operational and management inefficiencies, increasing rent, completing differed maintenance, and rebranding the properties to take advantage of the volume of units in a concentrated area.
The properties have been underperforming and have been mismanaged. The business plan is for VCG to acquire the properties, implement our strong local management team, improve operational inefficiencies, increase rents, improve the tenant profiles and establish cohesive branding. Within 12 months of acquisition, VCG is confident that the annualized net cash flows from the portfolio will surpass stated goals.