Analysis of Investments
Greeley Flats
Nelson Partners
The offering will purchase a Student Housing facility one mile from the center of the University of Northern Colorado, in Greeley, Colorado. The property has 93-units (262 beds) with a community lounge/game room, a fitness center, a business center, a swimming pool and an outdoor grilling area.
Investment Highlights
- Yr. 1 Cash-on-Cash 6.00%
- Initial Occupancy 100.00%
- Est. Time Horizon None YEARS
- Current Cash Flow
- Yr. 1 Cap Rate to Investor 5.31%
- Investor Purchase Price $24,440,000
- Total Offering Size $11,139,000
Loan Information
The loan has a fixed rate of 4.47% for 10-years. It is interest only for 5-years with a 30-year amortization schedule.
There is no defeasance fee for prepayment, but there is a prepayment penalty: for the first 114-months of the term, the penalty is the greater of a yield maintenance payment or 1% of the outstanding principal; from months 115-141 of the term, the penalty will be 1% of the remaining principal.
- Yr. 1 DSCR 2.17
- Loan-to-Offering 54.42%
- Hold Period DSCR 2.07
Tenant Information & Lease Terms
There are two lease lengths that students can choose from: Year-round or School-year. The School-year lease does not include June or July but cost 5% more per month.
Key Positives
There is strong 7% year-over-year enrollment growth at the University for the past 5-years.
The property is only 2-blocks away from the edge of campus, and 1-mile from its center.
Key Risks to Consider
Once you factor in tax and insurance fees into the operating expenses, the CAP rate is only 4.7%.
The Physical Condition Report call for $478,428; the Sponsor has only set aside $150,000 into the reserves.
The EGR is expected to grow 3.07% during the term with the OpEx at 1.9%.
The Sponsor has projected an aggressive year-1 EGR growth of 10% above the trailing 12-months.
The rent prices are set at the high end of the market.
The Replacement Cost is only 52% of the all in purchase price.