Apartment TIC Investment For Sale
This is a Private, Confidential and Off-Market Offering. This property is quietly being offered and is not being widely marketed on commonly used large listing services.
• Home to a North Carolina State University with an enrollment of 17,000 students.
• The University is one of the UNC system schools, has been in existence for over 100 years and has grown steadily.
• These Apartments are close to campus, was renovated in 2010 (formerly a hotel), offers studio and one bedroom units, has an indoor / outdoor pool, fitness center, on-site leasing center, and on-site grill / restaurant.
• The property has stayed +95% occupied since its 2010 renovation.
• Selling 1031 Interests in this well-located, student property.
• The owner acquired the property in March of last year with a new JV equity source that had raised their first fund.
T• he property has been one of their top performing investments as they raised rents for the 2013-2014 school year and achieved 100% occupancy.
• Today, they are 51% preleased for the 2014-2015 school year whereas they were 41% preleased this time last year and they have raised rents 3.0% over last year's rates!
• That said, their JV partner is raising their second fund and would like to sell some or all of their interest in property so that they can 'book' a good IRR for marketing purposes-
• The property's current lender, a Bank, is willing to let the owner change the ownership structure to a TIC structure if need be, and / or allow for a new owner to assume the loan.
• The loan terms are $5,100,000 original balance (approximately $5,000,000 current balance), 4.45% rate, 25 year amortization schedule, 4 year initial term and 2 year extension option, and non-recourse.
• With the 25 year amortization, the loan is amortizing at over $100K per year and the current NOI provides for a +1.4 DSCR.
• The JV partner has placed a value on the property of $7.3mm, which is approximately a 6.5% cap, which is the same cap rate when the asset was purchased.
• Hence, for TIC investment, they can take in up to $2.3mm of equity investment before they would begin to pay down the Bank loan.
• If the buyer buys less than 50%, the buyer would be a LP with major decision rights on refi, etc. As a tic owner the buyer would be free to sell their interest anytime.
• If over 50% the seller could certainly expand discussions on control.
• If 100% it would be the buyer's deal... The seller would like to stay in the deal - the seller is the GP now with a modest interest in the deal. They would be happy to leave their interest in the deal and have no preference over being GP or LP. The seller would also welcome the opportunity to stay on as the property manager.
If interested, we will provide the executive summary on the deal plus trailing financials plus the 2014 Actuals-Budget.
The information contained herein contains confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient will be prohibited. The information contained herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about the accuracy or completeness of the information. As a buyer, it is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this property to you depends on factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. We have no knowledge of this offering other than the information received from Seller or their representatives. We are neither your agent or an agent for the seller. We will not participate in the negotiation of the purchase price or attend the showing of this property. As a buyer, you will be required to indemnify us and hold us harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this property.