Value-Add Acquisition

Cherette Group approaches acquisitions with proven operational experience, an owner’s perspective, and a commitment to structuring transactions that result in risk-adjusted returns that are superior to the market.  Cherette Group seeks out opportunities to use its expertise to enhance Net Operating Income, the physical condition of the property, financing, and tenant satisfaction thereby yielding a greater return on its invested capital. The team is well equipped to navigate challenges with title, financing, multiple ownership interests, legal matters, and other complex scenarios.

In one such scenario, Cherette Group acquired a 278-unit, Class A multifamily property owned in two phases and financed by two lenders.  The property was over-leveraged, had significant deferred maintenance, struggled with tenant delinquencies, and had a vacancy rate three times the market average.  Cherette Group negotiated with multiple stakeholders to complete the closing, restructured the financing, and made notable improvements to physical property and operations.  Within four months, occupancy was near 99% and the property had a waiting list while simultaneously increasing rents, reducing bad debt, and maintaining renewals.  Cherette Group was soon approached to consider a sale of the property, and then completed the sale within six months of acquisition.  The property now enjoys a much improved market stature, stable occupancy, and an increasing net operating income.