The Avenue
Fayetville, ARK
Total Units
128
Hold Period
5 Years
Acquisition Price
$12,425,000
Sale Price
$17,145,000
Annual Rate of Return
24%
Equity Multiple
2.27x
Property Photos
Investment Overview: The Avenue, Fayetville, ARK
Acquisition & Strategy
The Avenue Apartments is a 128-unit, B Class value-add multifamily property located in Fayetteville, Arkansas, six minutes from the University of Arkansas in the heart of Northwest Arkansas, the 13th fastest growing MSA in the United States. As owner-operators, we control every phase of the business plan, from acquisition through renovation and asset management, backed by a team with more than 50 years of combined multifamily investing experience and over $350M in assets under management across the U.S. Northwest Arkansas is a market with exceptionally high barriers to entry.
Multifamily inventory is limited, assets rarely trade, and a single owner controls roughly 75% of the area’s inventory, keeping institutional-quality opportunities off the open market. Access here is earned through relationships, and our long-standing broker relationships put us at the table for this acquisition when most capital never saw it.Built in 1973 across 12 buildings with an average unit size of 928 square feet, the property has been meaningfully improved since construction, including new roofs, vinyl windows throughout, fencing, and lighting.
The current seller invested over $1.3 million into the asset, including extensive exterior improvements and interior remodeling of 59 units, leaving a proven renovation template and a clear path for the remaining units.We are acquiring the property for $12,425,000, approximately $97,000 per unit, with $8,842,000 in senior debt at a fixed rate of 5.86%, representing conservative leverage of 60.2% of total capitalization. The capital stack includes $1,301,900 in dedicated capital expenditures and $128,000 in reserves
Value Creation & Market Dynamics
The business plan renovates the 69 untouched units to a B Class finish, including shaker cabinets, granite counters, stainless appliances, and modern LED lighting, while adding private yards with privacy fencing, concrete patios, and planter beds to the 94 townhome units, an amenity that commands premium rents in a market with a 40% owner-occupied housing rate. Operating efficiency gains come from a property-wide water conservation program and LED upgrades that directly reduce utility expense and expand net operating income.
The in-place average rent of $870 is projected to increase to $1,100 post-renovation, a $230 per unit lift. Our underwriting assumes a conservative 4% annual rent growth, well below Northwest Arkansas’s actual 10.7% year-over-year rent growth, with effective rents across the region projected to increase 11% by 2027. At 5.1% vacancy, the property sits well below the market’s trajectory with meaningful room to close the gap
Market Analysis
Northwest Arkansas is one of the most compelling growth stories in the country: a population of over 560,000 growing 4.8% from 2019 to 2022, 2.1% job growth, 2.9% unemployment, and average income growth of 8.4%. The Fayetteville, Bentonville, and Rogers corridor is anchored by major corporate investment and a dense retail and employment base along the property’s West Wedington Drive corridor, which carries 37,000 vehicles per day.
Constrained supply compounds the demand story. With limited inventory, few assets trading, and concentrated ownership keeping product off the market, existing well-located assets like The Avenue hold pricing power that high-supply Sunbelt markets cannot match. The property’s location six minutes from the University of Arkansas provides a durable renter demand base, offering a compelling opportunity for stable cash flow and long-term appreciation
Investor Returns
Based on a $1,000,000 investment, the projected five-year hold delivers $452,500 in cumulative cash flow at a 9% average cash-on-cash return, plus $815,180 in equity at sale, for a total return of $2,267,680, a 2.27x equity multiple. All distributions are subject to cash flow availability
Key Investment Metrics
- Acquisition Price: $12,425,000
- Annualized Return (ARR): 24%
- Equity Multiple: 2.27x
Conclusion
The Avenue Apartments exemplifies our ability as owner-operators to access institutional-quality assets in supply-constrained markets that most capital never sees. By combining relationship-driven deal flow, below-replacement-cost pricing, a proven renovation template, and conservative underwriting in one of the nation’s fastest-growing markets, this asset is positioned to deliver compelling returns.This investment underscores Cramlet Capital’s focus on executing fundamentals-driven, owner-operated strategies in high-barrier, high-growth markets
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