Analysis of Investments



This is offering comes from Passco and consists of a single 400-unit apartment complex in Dunwoody, GA.  The property was built in 2008 and is located roughly 16-miles north of Atlanta.  

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.00%
  • Initial Occupancy 96.75%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 4.93%
  • Investor Purchase Price $84,750,000
  • Total Offering Size $37,950,000

Loan Information

This offering is using 10-year debt, with the first 5-years interest only, and fixed interest at 3.88%. 

  • Yr. 1 DSCR 2.15
  • Loan-to-Offering 55.22%
  • Hold Period DSCR 2.01

Tenant Information & Lease Terms

This offering is a typical multifamily property. Leases are generally 12-months. No concessions are currently being offered to tenants. 

Key Positives

  • Property rents are 65% below the high end of the market for 1 bedroom units and 53% for 2 bedroom units. 

  • Population and incomes are strong across the 1, 3, and 5-mile area. 

  • Sponsor intends to upgrade the property through exterior paint and full bottom floor rennovations.

  • No concessions or discounts being offering by current property management group.  

Key Risks to Consider

  • Local competition is high and a large amount of units either planned or under construction.  This could affect occupancy and future rent growth.  The submarket saw 3,000 new units added in 2017.

  • The 4.93% cap rate for this offering is low although the sales comps cap rate average is 4.89%.  Nevertheless, with interest rate set to increase and historical cap rate compression there is a risk that investors buying in to a market at the height may find a full return of capital difficult if a recession occurs.    

Investment Sponsor Information


According to the sponsor's website: "Since 1998, Passco Companies, LLC has operated throughout all market conditions and cycles. The company has acquired over $4 billion in multifamily and commercial real estate in the United States. Since its inception, Passco Companies has become a recognized provider of investment opportunities in real estate projects.

Passco Companies is directed by a team of dedicated senior real estate professionals whose experience in the business averages 34 years, and who, collectively, have acquired over $30 billion in investment real estate projects."