PROJECT UPDATE: Residences at 324 Hanover St. Manchester

After a LOT of… well, let’s just call it what it is… dawdling…  

We stopped construction designs in 2019 when we first were approached by an assisted living operator, who wanted to partner with us on the site.  I was very intrigued and interested, as the numbers looked VERY promising for us and our investors.  And after 1 iteration, and getting close to striking a deal – the dreaded COVID-19 happened.  And then, all of a sudden, they had LOTS of worse problems to deal with.  

And COVID-19 stalled us too.  We were focused on longevity and seeing what we needed to do to survive (just in case ALL real estate activity STOPPED… which it didn’t…), and then, we looked for ways to THRIVE in the upcoming chaos that would ensue (see my other post on the theme for this year, “BE READY”, after 2020’s year of “CLARITY”).

SO – after pulling the plug on my long standing passion project in Billerica, I knew we had to get cracking on this guy!

We first rehashed the designs to attempt to make them modular friendly, and then had it bid out with our modular connections in the area.  After the timing and pricing wasn’t coming in too favorably, we also had it bid out with some commercial stick builders in the area, and redesigned two last times to really make it nearly perfect.  We’re happy to have awarded the project to Ridgeview Construction, with a friend and mutlifamily investor of mine, Shane Carter as the principal.  So we’re finally at the point where we can do some last tweaking of value engineering, and then we can get to work on making this a reality for being placed into service early 2022!

Best part is?  We’ve been honing our unique strategy in the Southern NH market all this time.  By building a new asset, with efficient 2-bedroom units, we can appeal to a specific subset of professionals looking to work from home with the sound buffering they need, with access to public transportation and even zip car access on a major route, with a TREMENDOUS walk score to downtown or other amenities.  That said – by offering the location and “class B+” building, we can charge higher rents as most of them are given a stipend from their work to relocate to our buildings.  This is a new strategy we’ve been testing, and for a good amount of the units, this will be what helps drive the NOI and asset valuation to a point where we can refinance using agency debt.  By using agency debt – we get into a long term EXCELLENT financing situation which drives cashflows high, and couple that with our cost segregation strategies – this is what most of our investors love, is the tremendous tax benefits that come along with a new development or fresh rebuild / large renovation project.  By using our specialized national contacts, we can get as much as 25% of the hard assets and improvements of the building written off in taxes on YEAR 1…  which benefits all equity owners in our buildings.  While getting cashflow benefits quarterly, and WHILE getting their IRR upon refinance.  So equity owners make money 3 ways – they can get some principal back at a liquidity event (like a refinance or sale), they get quarterly cashflows from the performance of the building (huge shout out to our in-house Peak Performance Property Management Team!), and they get TAX savings by being a part of the cost segregation and bonus depreciation plays.

And we haven’t even talked about solar yet! So in short – our update is that we’re finally rounding the bend on getting this one restarted, and should have all final plans and final figures in place soon for our equity investors – we will be sure to provide updates and picture updates as it goes! Be sure to LIKE and FOLLOW both my public page on Facebook as well as the AA Real Estate Group on Facebook and Instagram for the “from the ground” updates as we move forward on this one and some other big opportunities we’re working on!