Multifamily ripe for development
Published on: September 16, 2011
Andy Ashby, Memphis Business Journal
A local businessman is taking advantage of a stable market in Memphis to enter the multifamily market through new construction and acquisition.
Wes Misenhelter, owner of MPS-Services Inc., has started building the first 180-unit phase of The Orleans at Walnut Grove at Walnut Grove and Houston Levee roads.
Operating as Orleans Apartments Community LLC, Misenhelter recently closed an $11.8 million construction loan to build phase one of the project. It will have one-, two- and three- bedroom units ranging from 830 to 1,210 square feet and with rents from $775 to $1,150.
Misenhelter is sole owner.
“I have no partners, which I’m very pleased with because it gives me the avenue to create what I want to create,” he says.
The property will have a clubhouse, pool area and an exercise facility on 18.3 acres. The project’s second phase will have 96 units.
Misenhelter has been a contractor for 30 years.
“The fact I could wear one hat positioned me to be very competitive in my pricing and execution,” he says.
Financial Federal brokered the construction loan for Misenhelter.
Rick Wood, executive vice president at Financial Federal, has seen an uptick in activity among Class A multifamily properties in Memphis.
He points out that until 15 months ago, there had been a non-distressed sale of a Class A multifamily property, or one without extenuating circumstances, in the Memphis market. But there have been several Class A properties trade in the past 15 months.
“That’s huge,” wood says.
Misenhelter will continue looking for a new project next year, maybe in Collierville, Lakeland or Arlington.
This new construction comes on the heels of several lower-grade acquisitions by Misenhelter.
Financial Federal arranged a $3.7 million permanent loan through Fannie Mae in August for Misenhelter to purchase Pinebrook Pointe Apartments. Operating as Pinebrook Pointe Apartments LLC, Misenhelter has been renovating the 248-unit property near the Winchester corridor.
This included building upgrades, additional parking lot lighting, fencing and card access gates for increased security.
“A lot of the folks who are coming in and buying these assets aren’t doing what I’m doing,” Misenhelter says. “Lower-income people, from my perspective, deserve the same quality you get in Germantown or Downtown. They deserve something they’re proud to live in.”
The property, with Keith Sheppard of Multi-South Management LLC heading up management efforts, has a 98 percent occupancy rate.
The acquisition comes on the heels of Misenhelter’s $2.8 million acquisition of French Village Apartments on Summer. He’s currently renovating those apartments.
“There have been a lot of out-of-towners take stabs at Class C properties, throw some paint at it and hope they’d be miraculously able to flip it like they might have done in 2005,” Wood says. “Instead, Wes has worked to make those properties safe and secure. As a result, occupancy, rents and collections are up while other communities are struggling.”
Misenhelter has been focusing his purchases on Class C multifamily properties, but could move up a grade or two in the future.
“As I build a base of 3-4 communities, the success of that would position me to move into more expensive properties,” Misenhelter says.
MPS-Services Inc. Residential and multi-family development and construction company President: Wes Misenhelter Phone: (901) 867-7025 Website www.mps-services.com