目录
What Is Value-Add Multifamily Real Estate?
Value-add multifamily real estate is an investment strategy that creates value by upgrading physical assets and improving operations. It often targets underperforming apartment buildings with potential for higher rents and better resident retention. Smartland specializes in executing this strategy with discipline, precision, and investor alignment.
Why Did Smartland Acquire Shorewood Apartments?
Shorewood Apartments, a 151 unit building in Cleveland, Ohio, was acquired due to its potential for repositioning. At acquisition, rents were significantly below market, and most units had not been updated in years. The building’s location along Lake Shore Boulevard offered steady demand from healthcare, university, and working class renters.
What Was the Plan?
Smartland’s strategy focused on three core areas:
- Interior Unit Renovations
- Upgraded kitchens, bathrooms, flooring, lighting, and fixtures
- 112 units renovated by end of Q1 2025
- Exterior and Common Area Improvements
- Parking lot sealing and striping
- LED lighting throughout interior and exterior
- New community room, signage, and outdoor gathering areas
- Operational Efficiency and Leasing Performance
- Accelerated unit turns and proactive leasing
- Improved resident services and technology driven communication
Before Unit Renovations
After Unit Renovations
How Has Shorewood Financially Improved Since Acquisition?
Comparing performance at acquisition to performance today helps show the impact of the value-add plan.At the time of acquisition, average rents were in the mid six hundred to eight hundred dollar range. Today, renovated units achieve higher rent levels. Net Operating Income has also grown.
Table: Rent And NOI Then Versus Now
| Metric | At Acquisition | Q1 2025 Performance | Growth Summary |
| Average 1 bedroom rent | 667 dollars per month | 849 to 949 dollars per month | Increase of about 27 to 42 percent |
| Average 2 bedroom rent | 800 dollars per month | Up to 1,300 dollars per month | Increase of up to about 63 percent |
| Annualized Net Operating Income | 303,000 dollars per year | About 341,000 dollars per year | Increase of about 12 percent |
The comparison shows that rent growth came from targeted renovations and better operations
Annualized Net Operating Income increased from about 303,000 dollars per year at acquisition to about 341,000 dollars per year today. This represents an increase of roughly 12 percent. Shorewood moved from an underperforming asset toward a more stable income producing property.
What Challenges Emerged?
In August 2024, a severe storm caused significant damage, including roof loss and flooding that affected over 40 units. Leasing activity paused for several weeks. The building’s seventh floor was especially impacted. Restoration costs and lost revenue posed a major challenge.
How Did Smartland Respond?
Smartland had secured a Business Income Protection insurance policy in advance. The policy paid out over $179,000 in Q1 2025. These funds supported emergency repairs, stabilized cash flow, and avoided a drawdown of reserves.
Table: Restoration Timeline
| Event | Status |
| Roof damage (Aug 2024) | Resolved |
| 7th floor offline | Restoration 95% complete as of Mar 2025 |
| Units restored | Most back online by Feb 2025 |
What Were the Financial Results in Q1 2025?
Q1 2025 Operating Performance:
- Operating Income: $322,867
- Net Operating Income (NOI): $85,147
- Net Income: $62,617
February 2025 Rent Collections: $104,009.47 (property record)
While March saw elevated one time costs due to unit turnovers and payroll catch up, overall quarterly results marked a clear recovery.
How Did the Renovation Strategy Drive Rent Growth?
Renovated units achieved significant rent premiums:
- 2-Bedroom Units: Up to $1,300/month
- 1-Bedroom Units: Ranged from $849 to $949/month
These increases closed the gap between in-place and market rents. Renovated units also leased faster and retained residents longer.
How Did Shared Spaces Improve Resident Retention?
Smartland modernized Shorewood’s shared spaces to increase resident satisfaction:
- Refinished lobby and hallways
- Installed new signage and lighting
- Opened a new community room (Q2 2025 launch)
- Built a new gazebo and outdoor picnic area
Cleaner spaces and consistent maintenance reduced mid term move outs. Residents cited better service and upgraded features in renewal feedback.
What Role Did Operational Efficiency Play?
Smartland drove NOI through cost discipline and process improvements:
- Reduced vacancy days through faster unit turns
- Controlled maintenance and vendor expenses
- Introduced value added services (laundry, internet, smart units)
- Increased late fee collections
These adjustments positioned Shorewood for sustainable income growth.
Smart Unit Technology
What About Distributions and Investor Protection?
Quarterly preferred distributions continued on a partial basis. Unpaid amounts accrued per the operating agreement. Shorewood’s fixed-rate debt structure shielded it from rate volatility, and the insurance proceeds helped preserve capital.
Smartland prioritized:
- Cash reserve protection
- Full stabilization before surplus distributions
- Transparent investor reporting
What Comes Next?
Smartland’s focus in Q2 and beyond includes:
- Reaching 95%+ occupancy
- Completing final seventh-floor restorations
- Enhancing NOI and margin stability
- Preparing for long-term exit planning as Shorewood enters year four of the hold period
What Does Shorewood Demonstrate?
Shorewood is a live example of Smartland’s value-add multifamily real estate model:
- Strategic renovation drove rent growth
- Risk management preserved capital through disruption
- Operational improvements elevated resident satisfaction
- Financial discipline enabled a fast recovery and ongoing investor alignment
Final Thoughts
Smartland successfully repositioned Shorewood Apartments despite construction challenges, a major weather event, and rising costs. The asset is now nearing full stabilization. As a result of strong execution and careful planning, Shorewood is set up as a high performing, income producing investment with long term upside.
This case shows how Smartland creates value through a full stack approach to acquisition, renovation, management, and investor transparency.
This article is for educational purposes and is not tax, legal, or investment advice.
FAQs
What makes Shorewood a value-add opportunity?
At purchase, most of the 151 units were dated and rents trailed the market. The Lake Shore Blvd location had steady demand, so upgrades and better operations could lift rent and retention.
What exactly did Smartland renovate?
112 units were upgraded by the end of Q1 2025 (kitchens, baths, flooring, lighting, fixtures). Exterior and common-area work included LED lighting inside and out, parking lot seal/stripe, new signage, a community room, and outdoor gathering spaces.
How did rents and NOI change after the plan?
Average 1 bedroom rent moved from about $667 to $849–$949. Average 2 bedroom rent increased from ~$800 to as high as $1,300. Annualized NOI rose from roughly $303,000 at acquisition to about $341,000 in Q1 2025—an increase of ~12%.
What setbacks did the property face, and how were they handled?
A severe August 2024 storm damaged the roof and flooded 40+ units, with the 7th floor hardest hit. Business Income Protection insurance paid over $179,000 in Q1 2025, funding repairs and stabilizing cash flow while units were restored (most back online by Feb 2025; 7th floor ~95% complete by March).
What did Q1 2025 performance look like?
Operating income was $322,867; NOI was $85,147; net income was $62,617. February rent collections totaled $104,009.47. March included higher one time costs for turns and payroll catch up.
How did operations support the turnaround?
Faster unit turns, proactive leasing, tighter vendor and maintenance controls, and tech enabled resident communication. Added services (laundry, internet, select “smart unit” features) helped drive durable NOI.
What happened with investor distributions and risk management?
Preferred distributions continued on a partial basis, with unpaid amounts accruing per the agreement. Fixed-rate debt reduced rate volatility risk, and insurance proceeds preserved reserves and capital.
What’s next for Shorewood?
Priorities include reaching 95%+ occupancy, completing final 7th floor work, pushing NOI and margin stability, and preparing for long term exit planning as the asset enters year four of the hold.
