Success Value-Add Renovation in Suburban Florida Drives 30% Gross IRR

Our approach

For RMR Residential, the Lighthouse Portfolio presented a rare opportunity: the ability to acquire more than 1,000 suburban Florida apartment units in a single transaction. Located across North Lauderdale and Tampa, the three communities - ARIUM Hampton Lakes, ARIUM Lakeside and ARIUM Bayou Point - offered strong in‑place cash flow, proximity to major employment hubs and meaningful value‑add potential. Acquired at an attractive basis relative to the vintage of the assets, the portfolio was strategically positioned within high‑growth submarkets where new residential construction was limited. With virtually no incoming supply within a five‑mile radius, RMR Residential saw an opportunity to capture outsized rent growth while maintaining high occupancy.

The opportunity

Each property was located in a rapidly expanding corridor benefiting from population growth, employment migration and renter preference for garden‑style living with access to transportation and services. Despite these advantages, the assets required operational realignment and incremental upgrades to fully capitalize on the market’s momentum. The portfolio’s scale also made it compelling. Acquiring more than 1,000 units simultaneously allowed RMR Residential to execute a coordinated strategy across a meaningful footprint, creating efficiency and consistency across renovation scope, management practices and leasing activity. With low competitive supply in the immediate submarkets, the team identified a clear opportunity to push rents and improve overall performance.

Asset management & execution

The properties were generating strong cash flow at acquisition, but the existing value‑add renovation program had not been fully optimized. To capture the remaining upside, RMR Residential chose to transition away from the third‑party management company and instead deploy its vertically integrated property management platform, ARIUM Living. This allowed the team to apply more rigorous revenue management, strengthen collections, reduce operating expenses and execute renovations with greater efficiency and oversight.

The value‑add initiative focused on building upon prior upgrades and elevating unit interiors and common areas to meet the expectations of renters in these growing suburban neighborhoods. Improved finishes, refreshed amenity spaces and enhanced curb appeal supported stronger market positioning and justified rent increases.

During the hold period, ARIUM Bayou Point was sold in December 2019. Subsequently, RMR Residential’s joint venture partner expressed a desire to exit their position in the remaining deals. With business plans still in progress and additional value not yet realized, RMR Residential saw untapped potential. Rather than sell prematurely, the team executed a recapitalization of the remaining assets and brought in a new joint venture partner to continue the strategy. This decisive move ensured continuity, preserved upside, and aligned the capital structure with the remaining renovation and operational objectives.

Strategic impact

Despite the relatively short 1.3‑year hold period, the Lighthouse Portfolio generated strong financial outcomes. The combination of improved operations, enhanced property management efficiency and incremental renovation created measurable value well ahead of the initial timeline. The ultimate portfolio sale delivered a 30% gross IRR and a 1.4x gross MOIC, demonstrating RMR Residential’s ability to identify mispriced opportunities, act decisively and execute value‑add strategies at scale. The success of the Lighthouse Portfolio underscores the impact of integrating property management, strengthening operational discipline and executing renovations that directly support rent growth. Even within a condensed hold period, these efforts translated into meaningful returns for investors.