Analysis of Investments

Bellemeade Farms Apartments

Capital Square Realty Advisors

The twelve apartment buildings that make up the Bellemeade Farms complex sits on over fifteen acres and makes up over 305,000 rentable Sq. Ft. Developed in 1988, the property underwent thorough renovations in 2017-18. Amenities include a clubhouse, leasing office, a business center, and a fitness center.

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.35%
  • Initial Occupancy 94.60%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 5.17%
  • Investor Purchase Price $79,437,000
  • Total Offering Size $34,100,000

Loan Information

The loan is on a ten-year term with a fixed interest rate. The first five years are interest-only, and years six through ten are on a thirty-year amortization schedule.

  • Yr. 1 DSCR 2.01
  • Loan-to-Offering 57.07%
  • Hold Period DSCR 1.95

Tenant Information & Lease Terms

Multifamily leases are typically 12-months in length.

Key Positives

  • The current rent rate is near the median market rent. There will be room to grow rent with plans for renovations to an additional 115-units,

  • The sponsor's growth projections look realistic.

  • The property was acquired at a high CAP rate (5.7%).

Key Risks to Consider

  • The year 1 growth projection (+7%) seems a little high.

  • The Sponsor’s NOI projection is 7.71% above historic NOI, which seems too aggressive given current occupancy and rent levels.

  • The Sponsor’s projections for the operating expenses are 2.4% lower than the appraisal’s projection, which could cut into returns.

Investment Sponsor Information

Capital Square Realty Advisors

Capital Square 1031 is a national real estate investment and management company. The firm sponsors institutional-quality real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. Capital Square uses the Delaware Statutory Trust (DST) structure to make quality real estate available to a larger number of investors.