Hoosier Woods Apartments is a two-phase partially affordable apartment complex developed in 2003 and 2005. Located in Anderson, Indiana, Hoosier Woods provides a buyer the opportunity to acquire 214 units in the county seat of Madison County roughly 40 miles northeast of Indianapolis. Anderson has maintained a roughly 7% submarket vacancy since 2016 and is projected to remain there moving forward, while asking rents are increasing at roughly 2% year-over-year since the end of 2013. Hoosier Woods Phase I was placed into the LIHTC program upon completion in 2003 and has 88% (92 units) of units rent restricted at 40%, 50%, and 60% of AMI. The LIHTC LURA is set to expire in 2057 after a longer extended use period was selected, also making this phase ineligible to go through the Qualified Contract process. Phase I also has 11% (11 units) restricted by a HOME LURA with 2 units restricted at 50% AMI and the remaining 9 restricted at 80% AMI. The HOME LURA is set to expire in 2022.Phase II was placed into the LIHTC program upon completion in 2004/2005 with 88% (97 units) of units rent restricted at 30%, 40%, 50%, and 60% of AMI. The initial compliance period of the LIHTC LURA concluded in 2019 and the property became Qualified Contract eligible at that time meaning that all 97 units covered by the LURA are eligible to be converted to market rate units. The extended use period is set to expire in 2029. Phase II also is restricted by a HOME LURA with 10% (11 units) restricted at 50% AMI (2 units) and 80% AMI (9 units). The HOME LURA is set to expire in 2024.Taking Phase II through the Qualified Contract (QC) process would provide a buyer immediate rental upside. Although all 97 LIHTC units are eligible through the QC process 11 units will remain rent restricted by the HOME LURA regulations through 2024. Nine of those 11 units will be eligible to be rented at 80% AMI as opposed to the more restrictive LIHTC rental restrictions. Still, a buyer would be able to convert 86 units to market rate, bringing the total number of market rate units to 99 out of 110 Phase II units. Implementing a moderate rehab program, market rents for the converted units would bring roughly $208/unit/month in rental premiums or nearly $214,600 annually.
