As of the close of Q2 2023, 506 South boasted an impressive occupancy rate of 94.94% and a 98.88% pre-leasing rate. This is mostly due to a dedicated focus on expense management and fostering renewal rate growth, which has produced an impressive streak of 5 consecutive months of Net Rental Income growth. We anticipate that this positive trajectory will persist under robust market conditions and the guidance of our experienced partner and team.
Rental rates and occupancy continue to exhibit robust strength. With a recent primary focus on selectively renovating units, particularly the transition from classic units to full premium 2-bedroom offerings, this has been especially rewarding. This strategic move has resulted in a remarkable average rental increase of 32.5% ($277), with some units achieving an impressive maximum increase of 64% ($536) compared to previous rates. Overall, rents have demonstrated a commendable 21.2% increase since the property’s acquisition, and this upward trend remains a driving force.
Income slightly exceeded budget expectations by 1.6%. Expenses managed to exceed projections by 0.58% during the last quarter, a notable accomplishment given unforeseen challenges such as increased insurance costs. Our partner and team were able to negotiate and secure more favorable rates, saving an impressive $50,000 over the previous policy, which enabled expenses to stay maintained within 1% of the budget and achieve a positive NOI of 0.49%.
Here are a few images of the completed renovations: