Successful Renovation Execution Drives 18% Gross IRR for Atlanta Community

Investment thesis

In December 2016, RMR Residential acquired ARIUM Vinings Station, a 315‑unit garden‑style apartment community located in Atlanta’s desirable Vinings submarket, for $53.8 million. The property possessed strong structural and design advantages - nine‑foot ceilings, townhome‑style layouts and attached garages - that aligned well with renter preferences for suburban communities offering space, privacy and convenience. Despite these attributes, the property was not performing to its potential. The seller had renovated 60% of the units but failed to appropriately price and market them. In a counterintuitive dynamic, renovated homes were leased at rents below those of unrenovated units, creating significant loss to lease and leaving substantial value unrealized. RMR Residential saw an opportunity to correct this misalignment, finish the renovation program and reposition the property within its competitive set.

Our approach

The opportunity

At the time of acquisition, ARIUM Vinings Station represented a compelling value‑add opportunity for an operator with the resources and discipline to reset operations. The previous owner’s renovation strategy had been well intentioned but poorly executed, resulting in upgraded units that failed to command appropriate rents due to weak marketing and ineffective lease‑up processes. This gap between physical improvements and operational execution created a clear path for value creation. Additionally, the remaining 40% of units still required renovation, allowing RMR Residential to not only complete the modernization effort but also bring the entire community to a consistent finish level that met market expectations.

Beyond the unit interiors, the property’s common areas - including the leasing center, clubhouse and amenity spaces - were dated and underutilized. These spaces represented untapped potential to elevate the resident experience and improve leasing performance. Together, these opportunities created a strong foundation for a transformative repositioning strategy.

Asset management

RMR Residential implemented a focused business plan centered on rent optimization, renovation completion, and amenity enhancement. The first priority was to immediately correct pricing on the 60% of units that had already been renovated. Through strategic rent increases on renewals and the launch of an aggressive marketing campaign, the team repositioned these units at more appropriate market rent levels. This early intervention successfully captured value that had previously been left on the table.

Within the next phase of the plan, RMR Residential renovated the remaining 40% of unrenovated units to match the standard of those previously upgraded. This ensured consistency in the product offering and supported the premium rental rates the market was willing to absorb. At the same time, the team undertook a thoughtful reimagining of the property’s common areas. The leasing center was redesigned into a more functional and welcoming environment, the clubhouse was refreshed to better support community engagement and the fitness center was relocated to overlook the pool, creating an attractive focal point. Updated furniture, fixtures and equipment further modernized the community and strengthened its competitive position.

Strategic impact

Through disciplined execution, RMR Residential delivered strong operational and financial outcomes at ARIUM Vinings Station. Rents increased from approximately $1,200 per unit ($1.12 per square foot) at acquisition to more than $1,800 per unit ($1.67 per square foot) at the time of sale - a substantial improvement driven by strategic pricing, thoughtful renovations and repositioned amenities. These enhancements elevated the property’s standing in the Vinings submarket and contributed to sustained occupancy and leasing momentum throughout the hold period.

Financial performance reflected the success of the strategy: In September 2023, RMR Residential sold ARIUM Vinings Station for $79 million. The investment generated a gross IRR of 18% and a gross MOIC of 2.7x over a 6.9‑year hold period, demonstrating the effectiveness of the value‑add approach and the team’s ability to unlock significant value through operational and physical improvements.