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Investor Performance Report — Q1 2026
Asset Performance & Stabilization Report
Phenix City Apartments | 2515 College Drive, Phenix City, AL 36869
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64 Units (63 Rentable) • 2BR/1BA Value-Add • Q1 2026 (Jan–Mar) • Data as of March 31, 2026
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1 — Executive Summary
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Strong Occupancy Momentum: Physical occupancy reached 74.6% (47/63 units) at March 31, 2026, the highest level recorded since acquisition, climbing from 63.5% in January and 68.3% in February. Two additional units are already signed and pending move-in, with 13 additional units fully turned and awaiting final appliance installation, on track to be market-ready before April 30, 2026.
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Q2 Lease-Up Initiative Underway: Management is launching a targeted leasing special to lease all 13 market-ready units before the end of Q2 2026 (June 30). If successful, this would push physical occupancy to approximately 87–90%, placing the property at or near the stabilization threshold and potentially triggering the 90-consecutive-day clock as early as July 2026.
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Revenue & NOI Accelerating: Q1 2026 generated $117,872 in total operating revenue with NOI increasing each month: $8,987 (Jan), $9,771 (Feb), $14,032 (Mar). March NOI represents a 56% improvement over January, demonstrating real operational traction.
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RUBS Full Pass-Through Starting June 1, 2026: Beginning June 1, management will implement 100% RUBS recovery on water, sewer, trash, and pest control, projected to add $3,500–$4,500/month to NOI at stabilized occupancy, representing $42,000–$54,000 in additional annual income.
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Stabilization Target in Sight: Three active evictions are being processed. Of 14 previously vacant units, 13 have been fully turned. Capital deployment of $582,027 has substantially improved unit quality across the property, directly supporting rent achievement at market rates.
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2 — Executive Snapshot
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Physical Occupancy
74.6%
47 of 63 units ↑ from 63.5% in Jan
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Economic Occupancy
55.2%
Mar 2026 | Avg T-12: ~45%
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March Revenue
$42,213
↑ $4,655 vs. Jan 2026 (+12.5%)
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March NOI
$14,032
↑ 56% vs. Jan ($8,987)
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Q1 Total Revenue
$117,872
~$39,291/month avg
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Q1 Operating NOI
$32,790
$117,872 revenue − $85,082 opex
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Debt Service (Monthly)
$38,924
Fixed interest charge
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Units to 90% Target
10
Need 57 occupied, currently 47
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Units Turned / Ready
13
Awaiting appliances, ready by Apr 30
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CapEx Deployed
$582K
Through March 31, 2026
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3 — Occupancy & Leasing
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Q1 2026 Occupancy Trend
| Month |
Occupied |
Phys. Occ. |
Econ. Occ. |
Revenue |
| January 2026 |
40 |
63.5% |
56.7% |
$37,100 |
| February 2026 |
43 |
68.3% |
52.4% |
$38,558 |
| March 2026 |
48 |
76.2% |
55.2% |
$42,213 |
| Q1 Average |
43.7 |
69.3% |
54.8% |
$39,290 |
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✔ Unit Readiness Update and Q2 Lease-Up Plan
13 units have been fully turned and are awaiting final appliance delivery, with market-ready status targeted by April 30, 2026. A leasing special is being deployed to lease all 13 units before June 30, 2026. If successful, this would bring physical occupancy to approximately 87–90%, at or above the stabilization threshold, and could trigger the 90-day stabilization clock as early as July 1, 2026.
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Current Unit Status (March 31, 2026)
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Current Tenants
44
Paying, in good standing
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In Eviction
3
P-A1, P-D1, P-D7
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Turned / Awaiting Appliances
13
Market-ready by April 30
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Signed / Pending Move-In
2
Leases executed, move-in pending
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4 — Financial Performance
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Q1 2026 Monthly P&L Summary
| Line Item |
Jan 2026 |
Feb 2026 |
Mar 2026 |
Q1 Total |
| Total Rent Income |
$31,500 |
$32,188 |
$35,690 |
$99,378 |
| Ancillary / Fee Income |
$5,600 |
$6,370 |
$6,523 |
$18,493 |
| Total Operating Revenue |
$37,100 |
$38,558 |
$42,213 |
$117,872 |
| Total Operating Expenses |
($28,113) |
($28,787) |
($28,181) |
($85,082) |
| Net Operating Income |
$8,987 |
$9,771 |
$14,032 |
$32,790 |
| Interest Expense |
($38,924) |
($38,924) |
($38,924) |
($116,773) |
| Net Income |
($32,963) |
($32,179) |
($27,918) |
($93,061) |
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ℹ How to Read These Numbers
The property is generating positive and growing operating NOI each month. The bottom-line net loss is driven entirely by fixed bridge loan debt service ($38,924/month) and depreciation, neither of which is affected by occupancy gains. As occupancy reaches stabilization and NOI approaches the $38,924 monthly threshold, the property will achieve debt service coverage. This is the trajectory management is actively executing toward.
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5 — RUBS Expansion — 100% Pass-Through Effective June 1, 2026
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Beginning June 1, 2026, management will transition to a 100% RUBS (Ratio Utility Billing System) pass-through, fully recovering the cost of water, sewer, trash/garbage, and pest control from tenants. This is a significant NOI improvement initiative that requires no change to base rent.
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Current RUBS (March)
$2,574
Partial recovery, 47 units
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Monthly Utility Cost
$6,758
Q1 avg (water, sewer, trash, pest)
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Projected Full RUBS Recovery
$3,500+/mo
At 57+ occupied units, 100% pass-through
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Estimated Annual NOI Uplift
$40,000+
~$600K–$770K added asset value @ 7% cap
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ℹ Why This Matters for Investors
The property currently absorbs over $49,000 per year in utility costs that industry standard practice passes through to tenants. Full RUBS implementation eliminates this gap progressively as occupancy grows. At 7% cap rate, the $42,000–$54,000 in annual NOI improvement directly represents $600,000–$770,000 in additional asset value with no rent increase required.
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6 — Progress, Challenges & Action Plan
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Progress Achieved in Q1 2026
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Occupancy Gained Q1
+12.7%
63.5% to 76.2%
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NOI Growth Q1
+56%
$8,987 to $14,032/month
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Active Challenges and Action Plans
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Challenge 1: Occupancy Below Stabilization Target
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At 74.6%, the property is 15.4 points below the 90% threshold. Fourteen vacant units represent approximately $11,690/month in unrealized revenue at market rents.
Action: 13 units turned and awaiting appliances. Leasing special launching to target full lease-up by June 30, 2026.
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Challenge 2: Three Active Evictions
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Units P-A1, P-D1, and P-D7 carry combined past-due balances of approximately $9,820 and are in active legal proceedings.
Action: Expedite proceedings. Target re-lease within 30 days of unit recovery. Strengthen screening to prevent recurrence.
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Challenge 3: Utility Costs at 23.8% of Operating Expenses
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Monthly utility spend of $6,758 represents a significant operating burden currently only partially offset by RUBS income of $2,574/month.
Action: 100% RUBS pass-through effective June 1, 2026 will fully recover all eligible utility costs from tenants.
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Challenge 4: Debt Service Coverage Pre-Stabilization
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At $38,924/month in fixed interest, current NOI covers 36% of monthly debt service. This pre-stabilization deficit is expected and consistent with a value-add bridge loan structure.
Action: Resolves with occupancy growth and RUBS implementation. At stabilization, projected NOI narrows the coverage gap materially.
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7 — Forward Outlook — 30 / 60 / 90 Days
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30-Day Priorities (April 2026)
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→ Complete appliance installation on all 13 turned units, achieve market-ready status by April 30
→ Launch leasing special targeting qualified applicants for all 13 units
→ Convert 2 signed units to occupied status, target 80%+ occupancy
→ Advance eviction proceedings for P-A1, P-D1, P-D7, recover units for re-lease
→ Begin RUBS audit, confirm all occupied units are correctly billed ahead of June 1 transition
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60-Day Priorities (May 2026)
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→ Target full lease-up of all 13 market-ready units through leasing special
→ Target 85–90% physical occupancy (54–57 units) by May 31
→ Finalize RUBS documentation and tenant notification for June 1 full pass-through
→ Implement rent increases on legacy below-market leases at renewal
→ Continue legal proceedings to final resolution on eviction units
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90-Day Priorities (June 2026)
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→ 100% RUBS pass-through live on June 1, all utility costs flowing back to tenants
→ Reach 90% occupancy threshold (57 units), initiate 90-day stabilization clock
→ NOI target: $22,000–$28,000/month (base rent + full RUBS recovery)
→ All eviction units re-leased and contributing to income
→ Begin stabilization certification planning and refinance evaluation
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8 — Key Investor Metrics
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| Metric |
Current (Mar 2026) |
Stabilization Target |
| Physical Occupancy |
74.6% (47/63 units) |
90.0% (57/63 units) |
| Monthly Operating Revenue |
$42,213 (Mar) |
~$47,000–$52,000/month |
| Monthly Operating NOI |
$14,032 (Mar) |
$22,000–$28,000/month |
| Monthly Debt Service |
$38,924 |
$38,924 (fixed) |
| RUBS Income (Monthly) |
$2,574 |
$3,500+ (100% pass-through, June 1) |
| Total CapEx Deployed |
$582,027 |
Ongoing as needed |
| Active Evictions |
3 units |
Target: 0 |
| Units Turned / Market Ready |
13 (awaiting appliances) |
All leased by June 30 |
| Stabilization Clock |
Not yet started |
Target start: July 1, 2026 |
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✔ Investment Thesis Remains Intact
The core value-add thesis, strong market fundamentals, meaningful rent upside, and an asset capable of generating materially higher NOI at full occupancy, remains valid. The Phenix City market retains its key demand drivers. With 13 units turned and ready, a leasing special underway, and 100% RUBS pass-through launching June 1, the property is executing a clear, measurable path to stabilization.
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All financial data sourced from the official property management system as of March 31, 2026. Occupancy and income figures are based on accrual-basis accounting statements. Forward-looking projections are management estimates and are not guarantees of future performance.
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Fuquan Bilal
PHENIX CITY APARTMENTS
Prepared for investor reporting and internal review | Data as of March 31, 2026
This report is intended for authorized investors and principals only. Not for public distribution.
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