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Lombard Equities · GP Asset Review
General Partner · Internal — deep asset review

Vernon Street Apartments

407 Vernon Street, Oakland, CA 94610
15 unitsKasa PropertiesValue-add: renovate legacy rent-controlled units to market on turnover (recapitalized Jul-2025 with senior refi + 18% preferred equity)Acq. 2022
$32,697/mo
In-Place Rent
+127% since Aug-2022 acquisition
100.0%
Occupancy (Jun-26)
0 vacant of 15; as of Jul'26
~$211,031
NOI run-rate
Q1-26 annualized; vs $224,228 refi Yr-1 plan
$2,550,000
Senior Debt
JPMorgan 5.81% IO; DSCR ~1.42
$683,252
Preferred Equity
18%; senior to common; ~16.7% IRR
$1,725,000
Common Equity
16 positions; A $1,025,000 / B $700,000
8
Reno Turns
legacy->market, up to +200%; market turns 17.2d avg
Executive summary

The thesis, right now

Vernon Street (15 units, Adams Point / Lake Merritt, Oakland) is a value-add recapitalization: legacy rent-controlled units are being renovated to market on turnover at +190-200% lifts, driving in-place scheduled rent from $14,419/mo (Aug-2022) to $32,697/mo (+127%). It was refinanced in July 2025 - a new JPMorgan senior loan ($2,550,000, 5.81% IO) plus an $683,252 18% preferred-equity injection senior to $1,725,000 of common. Current run-rate NOI ~$211,031 (Q1-2026 annualized) vs a $224,228 refi-model Year-1 plan and a $280,340 Year-5 exit target. The preferred earns ~16.7% IRR across exit-cap scenarios; common returns are thin at current marks (0.88x / -2.6% IRR at a 5.5% exit cap, 1.16x / 3.0% at 5.0%) and hinge on continued rent capture, cap compression, and a pending 2026 property-tax appeal (~$40K/yr). Operations are clean - Kasa-managed, fast market turns, no reported delinquency.

This week

What moved

VALUE-ADD

Legacy rent-controlled units renovating to market at +190-200% (305 $900->$2699); 4 legacy units still ~$62K/yr below market.

LEASING

Occupancy 100.0% (derived from turn log); market re-leases very fast (17.2d avg); 3 units on notice for July turns.

RETURNS

Refinanced Jul-2025: JPM senior $2,550,000 IO 5.81% + $683,252 preferred at 18%. Base-case common IRR modest (0.88x at 5.5% exit cap); tax appeal (Sep-2026) is an upside lever.

Data coverage

What this record contains

rent roll: completefinancials noi: completedebt: completevaluation: completedistributions: completedelinquency: none_reportedleasing efficiency: completeoccupancy series: derivedfinancials: completeexpenses: completemanagement load: complete

This page is generated from the canonical record. Dimensions marked partial/pending are honestly incomplete — not zero.

Operations

Occupancy & income

100.0%
Occupancy (latest)
$211K
NOI run-rate
$224K
Plan NOI
94%
% of plan
Occupancy trend
Aug'25 → Jul'26 · 12 months
Income · NOI · Expense by month
IncomeNOIExpenses
2022-08 Income: $14,5662022-08 NOI: $11,5842022-08 Expenses: $2,9812022-09 Income: $14,8522022-09 NOI: -$9,7312022-09 Expenses: $24,5822022-10 Income: $13,6162022-10 NOI: -$27,8602022-10 Expenses: $41,4762022-11 Income: $14,1762022-11 NOI: $8,1322022-11 Expenses: $6,0442022-12 Income: $14,8592022-12 NOI: $8,4832022-12 Expenses: $6,3762023-01 Income: $23,4372023-01 NOI: $12,9952023-01 Expenses: $10,4422023-02 Income: $21,6492023-02 NOI: -$22,7162023-02 Expenses: $44,3652023-03 Income: $25,8492023-03 NOI: $15,4362023-03 Expenses: $10,4132023-04 Income: $26,6632023-04 NOI: -$24,1252023-04 Expenses: $50,7872023-05 Income: $24,9102023-05 NOI: $22,0912023-05 Expenses: $2,8192023-06 Income: $28,5032023-06 NOI: $21,9352023-06 Expenses: $6,5682023-07 Income: $24,8792023-07 NOI: $19,6212023-07 Expenses: $5,2582023-08 Income: $21,5502023-08 NOI: $18,4512023-08 Expenses: $3,1002023-09 Income: $24,7852023-09 NOI: $18,1042023-09 Expenses: $6,6802023-10 Income: $21,7502023-10 NOI: -$4442023-10 Expenses: $22,1942023-11 Income: $24,3582023-11 NOI: $17,6902023-11 Expenses: $6,6682023-12 Income: $26,4272023-12 NOI: $22,8832023-12 Expenses: $3,5442024-01 Income: $25,3462024-01 NOI: $21,3892024-01 Expenses: $3,9562024-02 Income: $26,6332024-02 NOI: $17,3852024-02 Expenses: $9,2482024-03 Income: $30,0602024-03 NOI: $20,5702024-03 Expenses: $9,4902024-04 Income: $29,4782024-04 NOI: $23,7742024-04 Expenses: $5,7042024-05 Income: $27,5692024-05 NOI: $19,2262024-05 Expenses: $8,3432024-06 Income: $27,7322024-06 NOI: $23,3062024-06 Expenses: $4,4252024-07 Income: $29,6362024-07 NOI: $15,9042024-07 Expenses: $13,7322024-08 Income: $24,8752024-08 NOI: -$20,1172024-08 Expenses: $44,9932024-09 Income: $22,9292024-09 NOI: -$2,9532024-09 Expenses: $25,8822024-10 Income: $29,2412024-10 NOI: $21,5052024-10 Expenses: $7,7362024-11 Income: $26,2352024-11 NOI: $17,6782024-11 Expenses: $8,5572024-12 Income: $28,3922024-12 NOI: -$23,2072024-12 Expenses: $51,6002025-01 Income: $30,8432025-01 NOI: $23,8632025-01 Expenses: $6,9802025-02 Income: $31,0522025-02 NOI: $23,5012025-02 Expenses: $7,5512025-03 Income: $31,5502025-03 NOI: -$15,7242025-03 Expenses: $47,2742025-04 Income: $32,0772025-04 NOI: $27,7002025-04 Expenses: $4,3772025-05 Income: $32,1102025-05 NOI: $25,3012025-05 Expenses: $6,8092025-06 Income: $31,1032025-06 NOI: $24,9932025-06 Expenses: $6,1102025-07 Income: $32,9482025-07 NOI: $24,5932025-07 Expenses: $8,3552025-08 Income: $32,2652025-08 NOI: $24,6272025-08 Expenses: $7,6392025-09 Income: $32,2512025-09 NOI: $14,6142025-09 Expenses: $17,6382025-10 Income: $32,3372025-10 NOI: $29,2212025-10 Expenses: $3,1152025-11 Income: $32,4642025-11 NOI: $25,9092025-11 Expenses: $6,5552025-12 Income: $32,3692025-12 NOI: $26,2882025-12 Expenses: $6,0822026-01 Income: $32,5052026-01 NOI: $25,2452026-01 Expenses: $7,2602026-02 Income: $32,0862026-02 NOI: $19,9802026-02 Expenses: $12,1062026-03 Income: $33,3362026-03 NOI: $26,9222026-03 Expenses: $6,4142026-04 Income: $31,8672026-04 NOI: $22,6262026-04 Expenses: $9,2412026-05 Income: $32,1072026-05 NOI: $25,8172026-05 Expenses: $6,2902026-06 Income: $32,8262026-06 NOI: $27,9572026-06 Expenses: $4,869
Monthly operating detail
MonthIncomeNOIExpensesMargin
2022-08$14,566$11,584$2,98180%
2022-09$14,852-$9,731$24,582-66%
2022-10$13,616-$27,860$41,476-205%
2022-11$14,176$8,132$6,04457%
2022-12$14,859$8,483$6,37657%
2023-01$23,437$12,995$10,44255%
2023-02$21,649-$22,716$44,365-105%
2023-03$25,849$15,436$10,41360%
2023-04$26,663-$24,125$50,787-90%
2023-05$24,910$22,091$2,81989%
2023-06$28,503$21,935$6,56877%
2023-07$24,879$19,621$5,25879%
2023-08$21,550$18,451$3,10086%
2023-09$24,785$18,104$6,68073%
2023-10$21,750-$444$22,194-2%
2023-11$24,358$17,690$6,66873%
2023-12$26,427$22,883$3,54487%
2024-01$25,346$21,389$3,95684%
2024-02$26,633$17,385$9,24865%
2024-03$30,060$20,570$9,49068%
2024-04$29,478$23,774$5,70481%
2024-05$27,569$19,226$8,34370%
2024-06$27,732$23,306$4,42584%
2024-07$29,636$15,904$13,73254%
2024-08$24,875-$20,117$44,993-81%
2024-09$22,929-$2,953$25,882-13%
2024-10$29,241$21,505$7,73674%
2024-11$26,235$17,678$8,55767%
2024-12$28,392-$23,207$51,600-82%
2025-01$30,843$23,863$6,98077%
2025-02$31,052$23,501$7,55176%
2025-03$31,550-$15,724$47,274-50%
2025-04$32,077$27,700$4,37786%
2025-05$32,110$25,301$6,80979%
2025-06$31,103$24,993$6,11080%
2025-07$32,948$24,593$8,35575%
2025-08$32,265$24,627$7,63976%
2025-09$32,251$14,614$17,63845%
2025-10$32,337$29,221$3,11590%
2025-11$32,464$25,909$6,55580%
2025-12$32,369$26,288$6,08281%
2026-01$32,505$25,245$7,26078%
2026-02$32,086$19,980$12,10662%
2026-03$33,336$26,922$6,41481%
2026-04$31,867$22,626$9,24171%
2026-05$32,107$25,817$6,29080%
2026-06$32,826$27,957$4,86985%
Rent roll

Unit-level rent roll

Current rent-roll module not attached for this asset. Run rent_roll_parse.py on the latest month and pass the modules dir.

Financials

Operating performance · 2022-08 → 2026-06 (47mo)

$310K
NOI run-rate
80.4%
NOI margin
+38%
vs plan
$5,032
Opex / unit
NOI over time
NOI margin % over time
Year over year
YearIncomeNOIMarginOpex
2022 (5mo)$72,069-$9,392-13%$81,459
2023$294,760$121,92141%$172,838
2024$328,126$134,46041%$193,666
2025$383,369$254,88666%$128,485
2026 (6mo)$194,727$148,54776%$46,180
Expense analysis

Where the money goes

$159K
Total opex / yr
$10,569
Opex / unit
41.1%
Opex ratio
48.4%
Non-controllable
Operating expense by category · annualized run-rate, % of EGI   ■ controllable   ■ fixed (tax/insurance)
Taxes
$65,000
16.9% EGI
Utilities
$24,885
6.5% EGI
Management
$16,992
4.4% EGI
Marketing
$12,510
3.2% EGI
Other
$12,065
3.1% EGI
Insurance
$11,785
3.1% EGI
Turnover
$6,671
1.7% EGI
Repairs & Maintenance
$5,625
1.5% EGI
Administrative
$3,000
0.8% EGI
Anomalies to research
rising

Taxes

Taxes up 271% (recent vs earlier) — 27.3% of opex, ~$45,224/yr.

rising

Other

Other up 65% (recent vs earlier) — 12.8% of opex, ~$21,190/yr.

rising

Administrative

Administrative up 112% (recent vs earlier) — 4.4% of opex, ~$7,371/yr.

rising

Repairs & Maintenance

Repairs & Maintenance up 223% (recent vs earlier) — 4.1% of opex, ~$6,881/yr.

rising

Insurance

Insurance up 331% (recent vs earlier) — 2.2% of opex, ~$3,648/yr.

spike

Taxes

Taxes spiked to $38,035 in 2024-08 (~7.0x typical) — confirm one-time vs recurring.

spike

Turnover

Turnover spiked to $37,824 in 2023-02 (~108.1x typical) — confirm one-time vs recurring.

spike

Other

Other spiked to $20,124 in 2024-09 (~20.2x typical) — confirm one-time vs recurring.

spike

Marketing

Marketing spiked to $5,064 in 2023-01 (~7.2x typical) — confirm one-time vs recurring.

spike

Administrative

Administrative spiked to $6,376 in 2025-03 (~25.5x typical) — confirm one-time vs recurring.

spike

Repairs & Maintenance

Repairs & Maintenance spiked to $6,933 in 2025-09 (~14.8x typical) — confirm one-time vs recurring.

Rising = recent months vs earlier; spike = worst month ÷ typical. One-time acquisition/financing costs are stripped to NOI automatically.

Leasing efficiency

Pricing power & velocity

Market trade-out
0%
7 re-leases
Renewal increase
+3.1%
33 renewals
Value-add reno lift
+94.3%
5 renovated turns
Time to lease
33d
median · 7 turns
Trade-out = rent change re-leasing to a new resident; renewal = same-resident step-up; reno lift = outsized jump after a value-add turn. Together they separate market signal from manager pricing power from renovation premium.
Time-to-lease · detail

Actual days vacant, unit by unit

40d
Avg market re-lease (dated turns)
12/12
Turns with real move-out→move-in dates
7
Market trade-outs
Every market turn · days vacant = new resident move-in − prior resident move-out · newest first
UnitRe-leasedPrior move-outNew move-inDays vacantBasisType
202 2026-05 2026-03-31 2026-04-07 7d actual trade-out
205 2025-09 2025-08-31 2025-09-01 1d actual trade-out
305 2024-12 2024-09-30 2024-11-20 51d actual value-add reno
205 2024-11 2024-07-28 2024-10-23 87d actual trade-out
204 2024-08 2024-05-03 2024-07-19 77d actual trade-out
203 2024-08 2024-07-22 2024-08-01 10d actual trade-out
201 2024-03 2023-07-13 2024-02-08 210d actual value-add reno
104 2023-12 2023-10-01 2023-11-03 33d actual trade-out
104 2023-10 2023-07-31 2023-10-01 62d actual trade-out
304 2023-10 2023-06-25 2023-09-18 85d actual value-add reno
204 2023-05 2022-10-10 2023-04-29 201d actual value-add reno
301 2023-03 2022-10-31 2023-03-01 121d actual value-add reno
"Actual" rows use recorded move-out and move-in dates from the rent rolls; "est." rows fall back to the monthly-snapshot gap where a clean date pair is missing (which over-counts). Renovation turns are listed but excluded from the headline market time-to-lease; phantom same-lease name-changes are dropped upstream.
Rent growth · repricing impact

Trade-outs & renewals — what repricing is capturing

Trade-out rent impact
-$105/mo
7 re-leases · avg 0% · -$1,260/yr
Renewal rent impact
+$1,407/mo
33 renewals · avg +3.1% · +$16,884/yr
Reno turn impact
+$5,362/mo
5 renovated · avg +94.3%
Combined repricing
+$6,664/mo
current-manager era · +$79,968/yr annualized
Trade-out impact = monthly rent gained (or lost) re-leasing vacated units to new residents; renewal impact = rent captured stepping up in-place residents who stayed. Together they show whether the current manager is growing scheduled rent — and through which lever. Figures are for the current-manager era.
$1,311→$2,180
Avg in-place rent (2022-08→2026-07)
+66.3%
In-place rent growth
0%
Avg trade-out (7)
+3.1%
Avg renewal (33)
Average in-place vs market rent by month
2022-08 → 2026-07 · solid = in-place, dashed = market asking
$1,311$2,091$2,870
In-place rentMarket asking
Every repricing event · dated · trade-outs, renewals & reno turns · newest first
MonthUnitPrior rentNew rentΔ $/moΔ %Type
2026-05202$2,395$2,595+$200+8.4%trade-out
2026-02105$2,995$3,018+$23+0.8%renewal
2026-02201$2,470$2,489+$19+0.8%renewal
2025-11103$1,324$1,356+$32+2.4%renewal
2025-11102$1,056$1,082+$26+2.4%renewal
2025-11101$649$665+$16+2.4%renewal
2025-11303$2,003$2,019+$16+0.8%renewal
2025-11302$1,196$1,225+$29+2.4%renewal
2025-09205$2,649$2,850+$201+7.6%trade-out
2024-12305$950$2,699+$1,749+184.1%value-add reno
2024-11103$1,238$1,324+$86+6.9%renewal
2024-11102$988$1,056+$68+6.9%renewal
2024-11101$607$649+$42+6.9%renewal
2024-11205$3,150$2,649-$501-15.9%trade-out
2024-11303$1,875$2,003+$128+6.8%renewal
2024-11302$1,119$1,196+$77+6.9%renewal
2024-10301$2,495$2,645+$150+6%renewal
2024-09301$2,595$2,495-$100-3.9%renewal
2024-08204$2,300$2,395+$95+4.1%trade-out
2024-08203$2,545$2,495-$50-2%trade-out
2024-03201$1,746$2,489+$743+42.6%value-add reno
2023-12104$2,595$2,595+$00%trade-out
2023-10103$1,208$1,238+$30+2.5%renewal
2023-10102$964$988+$24+2.5%renewal
2023-10104$2,645$2,595-$50-1.9%trade-out
2023-10304$1,854$2,570+$716+38.6%value-add reno
2023-10305$927$950+$23+2.5%renewal
2023-10101$592$607+$15+2.5%renewal
2023-10202$1,802$1,848+$46+2.5%renewal
2023-10302$1,092$1,119+$27+2.5%renewal
2023-08205$3,052$3,150+$98+3.2%renewal
2023-07301$2,495$2,595+$100+4%renewal
2023-05204$1,854$2,300+$446+24.1%value-add reno
2023-03301$937$2,645+$1,708+182.2%value-add reno
2022-09204$1,800$1,854+$54+3%renewal
2022-09103$1,173$1,208+$35+3%renewal
2022-09201$1,695$1,746+$51+3%renewal
2022-09102$936$964+$28+3%renewal
2022-09304$1,800$1,854+$54+3%renewal
2022-09305$900$927+$27+3%renewal
2022-09101$575$592+$17+3%renewal
2022-09303$1,820$1,875+$55+3%renewal
2022-09202$1,750$1,802+$52+3%renewal
2022-09301$910$937+$27+3%renewal
2022-09302$1,060$1,092+$32+3%renewal
Performance trends · since inception

Occupancy, rent & turnover across the hold

Physical occupancy (avg)
88.9%
Latest 100%
Economic occupancy (avg)
74.7%
In-place ÷ market
Avg in-place rent
$1,950
$1311 → $2180 (+66.3%)
Avg loss-to-lease
$9,756
per month · gross potential − in-place
Lease turns · time-to-lease
12 · 79d
median 70d · 12 date-verified
Avg trade-out
+0%
new-lease rent change
Charts and read-through load when this tab is opened.
Physical occupancy over time · occupied ÷ 15 units
In-place vs market (asking) rent
Economic occupancy & loss-to-lease · line = econ occ, bars = $ gap
Average in-place rent by floorplan
Turnover — days vacant & trade-out % per lease · bars colored by speed; line = trade-out %
Debt & coverage

Debt-service coverage

2.08x
DSCR
$149K
Debt service / yr
$161K
Leveraged CF / yr
66%
LTV

Negative leverage

Cost of debt 5.83% vs. ~5.5% cap rate — debt costs more than the asset yields; leverage is dilutive at this basis.
Loans · 1 facility · IO uses interest, amortizing estimates P&I on 30yr
LenderBalanceRateStructureDebt svc/yrMaturity
JP Morgan Chase$2.55M5.83%IO$149K2032-08-01
Leveraged cash flow by month · NOI minus debt service (≈$12K/mo)
2022-08: -$8052022-09: -$22,1202022-10: -$40,2492022-11: -$4,2572022-12: -$3,9062023-01: $6062023-02: -$35,1052023-03: $3,0472023-04: -$36,5142023-05: $9,7022023-06: $9,5462023-07: $7,2322023-08: $6,0622023-09: $5,7152023-10: -$12,8332023-11: $5,3012023-12: $10,4942024-01: $9,0002024-02: $4,9962024-03: $8,1812024-04: $11,3852024-05: $6,8372024-06: $10,9172024-07: $3,5152024-08: -$32,5062024-09: -$15,3422024-10: $9,1162024-11: $5,2892024-12: -$35,5962025-01: $11,4742025-02: $11,1122025-03: -$28,1132025-04: $15,3112025-05: $12,9122025-06: $12,6042025-07: $12,2042025-08: $12,2382025-09: $2,2252025-10: $16,8322025-11: $13,5202025-12: $13,8992026-01: $12,8562026-02: $7,5912026-03: $14,5332026-04: $10,2372026-05: $13,4282026-06: $15,568
Green = cash to equity that month, red = shortfall covered by reserves/equity.
Valuation & equity

Valuation & returns engine

Two engines: a mark-to-market of investor equity right now (choose the NOI basis and cap rate), and a go-forward projected net IRR to the LP through a full waterfall (senior debt → senior pref → LP capital + preferred return → GP promote). All inputs are live — dial them and the numbers recompute. Marks are model-implied, not appraisals.
Distributions & capital

Cash to & from partners

active
Status
—
Distributed to date
—
Cash-on-cash
0
Capital calls
Distributions to date are to the 18% preferred (~$46,990); common receives proceeds at exit under the pref waterfall - no common distributions during the hold in the base case.
Risk & action items

What needs attention

watch

returns

Common equity marks below cost at current NOI; base-case common 0.88x/-2.6% IRR at a 5.5% exit cap (1.16x/3.0% at 5.0%). Returns hinge on rent capture + cap compression + the tax appeal.

monitor

taxes

Sep-2026 property-tax appeal decision (~$40K/yr saving if won) lifts hold-period cash to the preferred (pref IRR 16.7->17.5); does not change sale price under CA Prop 13 reset.

monitor

capital

18% preferred equity is expensive and senior to common; pref accrues if not fully cash-paid, compounding the common's subordinate position.

low

value_add

Strong embedded upside: legacy rent-controlled units renovating to market at +190-200%; in-place rent +127% since acquisition; 4 legacy units still ~$62K/yr below market.

low

leasing

Operationally clean: market turns 17.2d avg (n=4); Kasa-managed, no delinquency.