Nicholas Residential is a fully integrated Multifamily Investment Firm executing on opportunities in Dallas, Houston, and San Antonio, Texas. While only seeking out properties with management enhancement opportunities, Nicholas Residential focuses on the following.
About this Property
Nicholas Residential LLC is pleased to present the opportunity to invest in our upcoming multifamily acquisition, Somerset and Stratton Park Apartments. The two Class ‘B’ properties, well located in Fort Worth, Texas, are being purchased for $33m with a total capitalization of $36.2m. The properties were built in 1986 and consist of 528 individually metered units.
Residents enjoy first class amenities including a resident clubhouse, large swimming pool, walk‑in closets, private patios and balconies, fireplaces, washer/dryer connections, onsite laundry facilities, controlled access gates and a courtyard area with gazebo and an outdoor kitchen.
The average household income within three miles of the property is $62,430. With ample parking and an attractive mix of 1 bedroom and 2 bedroom units, the property is well situated to fit the needs of established adults as well as families with children in the surrounding area.
Nicholas Residential will secure a Freddie Mac loan at 79% LTV, 3.85% interest, 5 years interest only, 30‑year amortization, and a maturity date of 2026. The debt is fully assumable upon sale and eligible to be resized back to 75% LTV.
Although investment underwriting assumes a 5-year hold period, deals are overcapitalized at closing to avoid capital calls and sustain the projects cash-flow through a potential downturn in the market. The project is expected to close on October 25th, 2016.
- Investors will receive Monthly Distributions.
- Targeted Cash on Cash returns average of 15.8% over the hold period.
- Sponsor providing favorable structure with a 10% preferred return.
- The investment targets a 20.85% IRR and 2.24x multiple on a 3 to 5 year hold.
- Value creation opportunity through capital improvements and improved management.
- Existing rents are currently $180 below other fully improved units at the properties.