Date of ownership: Nov 2018
Date of sale: Still owned
Northern cross apartments is an investment into a higher end “institutional quality” asset and was done to diversity across asset classes. This was a bigger deal in terms of number of units and investor equity required. The opportunity for large gains is present which makes this a great opportunity. Further the stabilized asset, exit strategy and property fits nicely into the overall portfolio.
Property Information
Size: 398 Units
Number of buildings: 19
Year Built: 2001
Business Plan:
Renovate Units – $7.500 / unit upgrade
Enhance exterior and common areas
Improve property Management
Financials:
Purchase Price: $48,600,000
Equity Raised: $21,500,000
Projected Returns:
Average Cash on Cash Return: 8.6%
Average annual return: 21.1% (including capital gains)
Total Investor Return: 150%
Total Investor IRR: 16.1%
Insert into table:
Year 1: 8.0%
Year 2: 8.2%
Year 3: 8.6%
Year 4: 8.8%
Year 5: 9.3%
Year 6: 8.3%
Year 7: 96.6%
Capital Gains: 32%
Exit Strategy:
7 year hold time.
Have 20 year mortgage for flexibility on exit timing