Sule Aygoren Carranza

Carmel, IN—Looking for better returns than in traditional condo markets, Abacus Capital Group LLC has ventured into the Midwest. The company is currently selling units in its latest conversion project, the 186-unit Wentworth at WestClay, located within the Village of Westclay, a 680-acre, high-end, master-planned community here.

Abacus bought the property a year ago from its original developer, A.G. Spanos & Co., for nearly $15.2 million shortly after it was completed, according to the firm's president and chief executive officer, Benjamin Friedman. It was brand-new and 70% leased at the time.

"We determined that the property's highest and best use was to convert it to condos, and once we acquired it for conversion, we stopped the leasing," he explains. "We wanted to keep the units fresh and be able to implement our upgrade program without disturbing too many residents at the time. We spent almost $2 million on a substantial upgrade program to the asset, upgrading its finishes and common areas to condo specifications." While most investors look to the East and West Coasts for plays, what led a New York City-based real estate investment firm to head into the Midwest, a region that has overall experienced sluggish job growth and poor multifamily fundamentals? For Abacus, which does 75% of its business in the multifamily sector and the balance in condo conversions, specifically in Miami, New York and California, The Wentworth purchase marked its entry into the area, Friedman relates. In fact, the firm considers the Midwest to be a "third coast" for the US, and sees opportunities in cities with strong economic fundamentals and that offer value when compared with other options.