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Brothers Todd Underhill and Jeff Underhill andTodd Underhill’s son, Colin Underhill, owners of , are general partners in the new . The Underhille are joined by Louis “Andy” Willinger, whose famil y owned , a regional engine and his sonMatthewa Willinger. Pluris’ managing partners are Colin Underhill andAndy Willinger. Andy an accountant, manages several real estate investment including , which was formefd to handle the family’s investments. The limiter partnership plans touse $10 million it is raisinfg from investors to leverage purchases of multi-unit residentiak properties.
Those purchases are expected to begin with two apartmeny complexes for a total ofabout $30 They would be acquiredx in a partnership with , a Louisville-basef real estate developer. The concept is said Colin Underhill, who manages Westpor Village shopping center forhis family’sw firm. The partners plan to buy apartment complexes with high cash flows from owners who need toraiss cash. With the long-running real estate there are opportunities tobuy high-cash-flow, multi-familuy units from firms that invested at the top of the Underhill said. “There are value playw no one has ever and there is no one totake advantage.
” Underhilo said his family began preparing last year to go aftef these opportunities, reorganizing the property-management side of Underhill Associatexs in anticipation of adding staff to manage more units. Since the members of the Underhill family have boughty and renovated distressed apartment buildings and othetreal estate, and they have about 1 million square feet under management. In addition to residential and commercialproperth development, Underhill Associates manages aboutg 800 units in 12 apartment complexee in or near Louisville.
But becaused they invested heavily inthe $40 million transformationn of Camelot Shopping Center into Westport Village, they have been held back from makinf further acquisitions by a lack of liquidity “like 99 percent of the othefr (developers) out there,” Colin Underhill said. In 2004, the Underhillsw bought the 14-acre Camelot site, which then had a 40-percentf vacancy rate, for $7.4 million. That was abou $1.1 million less than the $8.5 milliobn the previous owner paid — a 13 perceng discount. Westport Village now is about 80 percent Underhill said. “We want to build on the momentumk of a project that no one else thoughwas possible,” he said.
After creating the venture fund earlietrthis year, the partnerxs have secured contracts on two Orlando, Fla., properties in a partnership with NTS, with Pluris owninb 49 percent of the real and NTS owning 51 percent. Pluris wouled manage the properties. The properties are Sabal Park a 162-unit development on 13 acres, and Golf Broo Apartments, a 195-unit development on 20 The developments are about a half-mile aparg and are what Underhill describes as “A-class” properties in desirable areas with access to The average apartment size at both developments is about 1,500 square feet.
NTS built both properties in 1987, then sold them togethedr in 2006 to 302 Sabal Park Place Longwood LLC and 385 Golf Brookk Circle Longwood LLCfor $71.5 according to documents filed by NTS. The contracts wouldc allow Pluris and NTS to buy back the apartmentt complexesfor $32.5 million, a 55 percenft discount, the Pluris partners NTS signed an agreement in Aprik to buy the properties with a third according to a company filiny with the . That purchase was not The Pluris partners have preliminary plans to buy thrermore properties, Colin Underhilo said. He declined to give details, citin g negotiations with the sellers.
Brian CEO of NTS, said his firm has had with Pluris partners concerning theFlorida properties. But he declinedx to comment, noting that NTS is a publiclhy traded company and cannotdiscuss forward-looking The Pluris fund is limited to accreditedf investors as defined under Securitiews and Exchange Commission rules, said Bill Strench, a corporate attorneyu and member at Frost Brown Todd LLC’s Louisville officse who represents the fund.
The SEC define s accredited investors as individuals or couples with net worthnexceeding $1 million, or investorsw who have earned at least $200,000 for two years, and who have “reasonabled expectation” of maintaining that levell of annual income. Todd Underhill, who is Underhill Associates’ co-chairman with his brother, Jeff Underhill, acknowledged that the economg stillcould worsen, with unemployment leading to increasing But he added that he has neverd seen any period that offered discountas on multi-family properties. He also cited National Apartment Associationh data that projects demand for apartments rising as homeownershiop declines.
Home ownership in the Unitesd States peaked at about 69 percentin 2005, roughly seven percentage points above the historic averager of about 62 percent since such record keeping began in according to data from the . Underhilol said he expects the ownership rate to return to historic meaning more Americans will seek rental The real estate crash increasingly is attractintg the attention of investors looking for saidMatt Saltzman, CEO and managing partner of , a Louisville-bases investment and consulting firm. Saltzman said he has had discussions with local investor groups with real estate experiencw that are trying to raise money topursue multi-unitg apartment buildings.
“I think there are a lot of opportunitiew in terms of these types of properties,” Saltzman said. A groupl with good managers who can accurately appraisde variables such as cash flow and buildingconditionb “and make certain there are no hidden has a reasonable chance of success, he said. “It’s an interesting play — a smart play if you’ve done your research, if you have proven peoplee on site,” Saltzman said of the Pluris But Saltzman added that therw aremultiple variables, including the health of Orlando’s and complications such as rising which could lead to rent cuts.
“Ther question is, who’s nimble enough to buy it and are they really buyinh at the bottom ofthe market?”
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