PROJECT 301 REGENT AVE FULL CASE STUDY

Arete’s Investment: Acquisition, Rapid Repositioning & Full Capital Return

Introduction

Project 301 Regent Avenue is one of Arete’s own acquisitions — a relatively clean, stable apartment building that still held significant untapped potential. The property came to us off market through a realtor who understood both our criteria and our ability to solve regulatory and operational challenges that other buyers might hesitate to take on.

On paper, the building was in decent condition but dated. There were questions around rent regulation and some uncertainty about compliance, but overall, it was a solid structure in a strong area with an opportunity to reposition, modernize, and quickly recycle capital.

PROBLEM

The building’s primary issues were twofold. First, the interiors were tired. Suites needed renovation to support stronger rents and to align with the level of housing we want associated with Arete’s name. Second, there were some rent regulation concerns. It was not immediately clear whether all rents were fully compliant, and that created risk for both the existing owner and any purchaser.

For us to move forward, we needed to be confident that any compliance issues could be resolved and that the building had a clear path to higher performance and a near-term refinance.

DISCOVERY

We began by assessing the physical condition of the building and confirming that the underlying structure justified investment. At the same time, we reviewed the rent-control situation. Through that process, we identified some issues that needed to be corrected. Rather than using this as leverage against the seller, we took a collaborative approach, educating the vendor on how to resolve the problems so that, regardless of whether we purchased, he would have a compliant asset.

Once those items were addressed, we confirmed that the building was a good candidate for our value-add model: acquire, renovate, increase rents, apply for above-guideline rent increases where applicable, stabilize, and refinance.