Q1 2016 Update

Operating Results:

We report Sandalstone’s Q1 2016 results to be a record during the rental phase. Quarterly revenues increased 3.9% over prior quarter with a 11.4% increase over Q1 2015. The primary reason for this was the rise in rents. Vacancy was at 2.7% which was well under our historical average. The vacancy was due to the event at the Cove Landing property which we will describe later. This will be a brief update as we sent investors additonal detail with the yearly Tax return.

 

The most notable story of the Quarter involved our property at Cove Landing Avenue.  The tenant had put us in an awkward position of not letting our contractors work in the property.  The reasons cited were that they didn't feel comfortable with the way the husband was treating his wife.  We consulted many sources on the proper course of action for us.  While we would have liked to report this ourselves, we were advised that since we didn't see this first hand, all we could do was to encourage the people who did see what they saw to report it to the proper authorities.  In addition, the tenant knew a person in the Code Compliance office, so he reported the work that we couldn't do to the local office.  The Code Enforcement Officer was reasonable and allowed us to defer the work until the tenant moved out - something that we facilitated by making it very easy for them to leave.  Another "soft" way of removing a problem tenant.  The vacancy was filled in the quarter and we are relieved to end that chapter.  

Market Update 

We reference Case Shiller in each of our updates as we believe that index to be the best indicator of asset prices. SF registered annual gains of 8.5%.  The top 3 national markets were Portland, Seattle and Denver third.  Las Vegas registered a 6.0% increase which was a little over average for the nation.  We continue to be pleased with those results.

Clarameda Fund, LLC:  

-  Continued payout of monthly distribution.  Initial Partners have received over 50% of capital back in the form of distributions.  Zillow estimate of property value is up 87% from purchase price plus rehab costs.  

-  K1s were distributed and annual Management Discussion sent out - another strong year.  

In Summary,

This was a rather brief update as we mostly held serve on the existing properties, cleared up a major problem and tended to the annual taxes.  

My thanks as always to the people who assist us in our endeavors and the Partners who trust us to manage the Company with their capital.  

 

Cheers!

 

Biren
Biren Talati
Managing Member
Sandalstone Group, LLC