Convolo Capital’s 2023 Year in Review

What a year it’s been! Despite macro headwinds, it has been an excellent year for the Convolo Capital team and our investors. We want to wish all our investors and partners a Merry Christmas and a Happy New Year! We thought it’d be great to provide a brief recap to our investors about this year.

2023 Convolo Capital Highlights:

• 99 units with $17.6 million AUM (Assets Under Management)

• $261,494 in distributions across the portfolio

• Acquired McClure Springs a 45 unit townhome style community built in 2021 Oakwood, GA

• Under contract on Park Oaks Athens, GA a 40 unit duplex style community built in 2001 bringing the total count to 139, expected to close Q1 2024

 Convolo Capital Portfolio

Park Oaks:

Park Oaks our newest venture is under contract and expected to close in Q1 of 2024. This 40-unit, spacious property sits in a quiet 23-acre community with excellent curb appeal. Our value-add plan is to improve the unit interiors and cut down on the significant loss to lease.

The property located in Athens, GA was built in 2001 and is located off Highway 441 which connects to fast-growing Jackson County. We are purchasing with an assumable 3.57% rate. The property boasts an excellent tenant base and we are excited about how the property is projected to perform from our underwriting.

The Athens-Clarke and Jackson Counties have remained severely supply-constrained in recent years with few units coming to market despite new jobs moving to the area. Meissner Corporation recently announced a new $250mm facility expected to bring 1,700 jobs. The University of Georgia football has remained a powerhouse. The applicant pool looking to attend UGA continues to be larger and more competitive. If you are interested in learning more about investing in Park Oaks, please let one of the sponsors know and we will send over the details.

Convolo Risk Mitigation:

The Convolo team has used sound risk mitigation principles for purchasing real estate. We’ve made a strategic investment by focusing on the Northeast quadrant of Georgia experiencing phenomenal population and job gain drivers. We’ve also employed prudent capital market strategies by using fixed-rate debt and acquiring more than enough capital and reserves at the property level.

• All Properties have FIXED rate Debt.

• All debt is agency, Fannie & Freddie at lower LTVs of 60-65%.

• We maintain control of our Capex dollars and Reserves (Not lender).

• Never purchased a property below a 5% cap rate. (we do not have the risk of significant deterioration of value due to interest rates).

• Never underwritten above 3% Rent Growth and reasonable expense assumptions.

• 10%+ equity funded by sponsors on each property. ($1MM+ over portfolio)

• All deals have a Preferred return. (Investors earn before sponsors).

• Property locations with supply/demand imbalance and strong job growth.

Asset Management Highlights:

The team has grown considerably in our Asset Management expertise, a function that Convolo deems as arguably the most critical in our business. At Celeste on North, we completely transformed the exterior turning a C Class property into a modern artistic visually appealing place to live.

Our team visited each property 6-8 times during the year, each time providing feedback to our Property Managers, which ups the expectation level and ensures our goals are being met.

At each of our properties, we’ve focused 2023 efforts on maximizing retention in the face of macro headwinds and potential recession. Turn costs have risen dramatically making it more appealing to keep tenants in place with less renewal growth.

During the year, we’ve continued to invest in our quarterly reporting and monthly updates to enhance our communication with investors. 

McClure Springs

Preston Court

Celeste with new facade

Celeste at night with lights

Convolo Christmas: 🤶🎅🎄

Every year the Convolo partners sponsor a local family, providing monetary support and/or gifts for children at each property we own.

We're excited to complete this meaningful initiative again this year:

At Preston Court—we delivered Walmart & Amazon gift cards worth $500 along with toys to a family with a mother who has continued to battle health issues.

At Celeste on North—we selected two separate families and gave a $250 Walmart gift card each along with toys for young girls.

At McClure Springs-- we selected two separate families and gave a $250 Walmart gift card each along with toys for young kids.

It’s important to note that the funds for Convolo Christmas come directly from the pockets of the partners and NOT from the property budget.

Looking Ahead to 2024 & Beyond:

The team believes we’re at a unique crossroads in the growth and maturation of our company. We’ve built an incredible on-the-ground reputation for consistency and delivering results and it’s beginning to open up new opportunities and create some advantages in the marketplace.

We believe there will be some excellent and unique buying opportunities in 2024. There are many debt maturities across our space and operators that are undercapitalized due to the employment of floating rate debt. With some market disruption and a potentially lower interest rate environment, many opportunities could present themselves.

We want to thank all of our investors and partners for helping make 2023 a big success. We look forward to new opportunities to come in 2024!

Have a great Christmas and New Year!

Stephen, Jeremy, Jamie & Curtis

The Convolo Capital Team