Analysis of Investments

National Multifamily Portfolio 3

Inland

This investment contains three separate multifamily properties located in Maple Grove, Minnesota, East Raleigh, North Carolina, and Shelton, Connecticut. 

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.00%
  • Initial Occupancy 92.50%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 4.80%
  • Investor Purchase Price $218,042,339
  • Total Offering Size $100,617,339

Loan Information

Each property has its own loan and none are cross-collateralized. All three are non-recourse to investors. 

Maple Grove: 10-year term, fixed interest rate, interest only first 5-years, 30-year amortization. 
East Raleigh: 7-year term plus a 3-year extension option with rates above, 5-years interest only term, 30 year amortization for original term and 28- year amortization for the extension.
SW Connecticut: 7-year term plus a 3-year extension option with rates above, interest only period of 5-years, and 30-year amortization for original term and 28 year amortization for the extension.

  • Yr. 1 DSCR 2.19
  • Loan-to-Offering 53.85%
  • Hold Period DSCR 2.02

Tenant Information & Lease Terms

Maple Grove: This area houses major research institutions and corporate HQ's. There is a highly educated workforce, but high costs of living and business costs could hinder further growth to the area. 

East Raleigh: This area of NC is home to high tech industry companies. This may allow for higher wage employees entering the area, potentially able to pay class-A rents. 

Connecticut: The properties general MSA is home to high income jobs in the financial services sector. Living costs have also increased as a result. The property's rents may need to be lowered to compete with other areas.

Key Positives

  • All three property locations have access to major MSA's.  Additionally they are located within consumer areas. 

  • There are high wage jobs and tech industries prevalent near all three properties. 

Key Risks to Consider

  • Each property is charging rents higher than average market rents. 

  • Two properties are above, or at, stabilized occupancy.  This could limit revenue growth. 

  • Upfront reserves may not be enough to cover anticipated CapEx. 

  • EGR growth of 12% AND 10% for NOI may be aggressive. 

  • 4.80% cap rate is low.  

Investment Sponsor Information

Inland

The Inland Real Estate Group of Companies, Inc. ("Inland"), is an industry leader and one of the nation's largest commercial real estate and finance organizations. As a business incubator, we specialize in creating, developing and supporting Inland member companies that provide commercial real estate-related services and alternative investment funds, including limited partnerships, institutional funds and non-listed and listed REITs.

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