How AION Adds Value
Case Study: The Harrison, New Jersey
AION Partners was founded by Michael Betancourt and Siraj Dadabhoy who collectively have over 50 years of experience investing in real estate and have been investing together since 2001. AION Partners acts as Operating Partner on core-plus, value-add, and opportunistic real estate investments across the U.S. Since inception, AION has acquired and operated a $3.9 billion portfolio of multifamily assets. AION’s current portfolio consists of 20,000+ apartments across 58 communities, located primarily in the greater Mid-Atlantic and Mid-West regions of the U.S.
The Team identifies and capitalizes acquisitions by tapping an exclusive, established network of high net worth individuals and institutional partners for equity. On a historical basis, all deals were capitalized on a deal-by-deal basis.
To create a diversified platform for AION’s investors and build off it’s 10 year track record of investing in multi-family properties, AION successfully closed its first discretionary fund vehicle with $52MM of committed capital in 2019. AION’ second discretionary fund closed in 2022 with over $225MM. AION has invested in workforce housing assets across the United States, including the Sun Belt, and has chosen to focus on the Mid-Atlantic and Mid-West Regions given there favorable market characteristics.
Acquire
September 2016
- In September 2016, AION acquired The Harrison, 316 units in New Brunswick, NJ, for $54M
- Sourced on an off market basis
- Acquired directly from original family developer
- Multiple operational levers & value upside
- Capitalized a $4.9M capital expenditure program
- Target Levered Returns: 26.8%% IRR & 2.02x Equity Multiple in 5 years
Institutionalize
- Implemented rent optimization software (LRO) & utility reimbursements
- 7.4% rent increase & 19% increase in total net revenue
- Expense ratio reduction (48% to 40% in 12 months)
- Renovated 41 units at an average cost of $9,044; achieved $186/month rent increases (26% ROI)
- $4.7M in completed capex projects
- 28% NOI increase in 32 months
- 7.87% average cash-on-cash yield during first 2 years
Dispose
- In 2019, AION decided to sell The Harrison after exploring other capital event opportunities (refinance or recapitalization)
- AION quickly chose a buyer and negotiated a sale price of $78M versus underwritten sell out of $76M
- AION was able to execute its 5 year business plan in less than 3 years and closed on the sale in October 2019
- Realized Gross Levered Returns: 27.1% IRR & 1.98x Equity Multiple
- 1031 exchange was utilized to defer tax liabilities generated by the sale
