Case Studies
Carling on Frankford
(Midwest Multifamily-Closed Deal)
Prevail Alternative Assets is pleased to present Carling on Frankford – a multifamily acquisition opportunity located in Carrollton, TX. The asset is a traditional garden style multifamily property consisting of 274 units, originally constructed in 1983. The current owner of the asset is selling for near total equity loss, which provides an attractive “entry” position.
The project will utilize capital improvements on the property to bring rents up to market and position the asset to be an attractive target for strategic buyers. We anticipate a 36-month hold period on this project, with flexibility to shift strategy if needed. If you are interested in this opportunity or have any questions, please reach out to your advisor or contact Regan Smith at rsmith@prevailiws.comInvestor Return Summary*
- Class A – Total of $3,500,000
- $250,000 per share
- 9% preferred return
- 22% – 24% LP Net IRR Targeted
- 14 shares available
- Class A – Total of $3,500,000
- Class B – Total of $2,500,000
- $100,000 per share
- 7.50% preferred return
- 20% – 22% LP Net IRR Targeted
- 25 shares available
- Class B – Total of $2,500,000
Investment Snapshot
- Total Project Cost – $43,841,192
- Total Equity – $14,837,856
- Prevail Equity – $6,000,000 (40.4% of Total)
- Senior Loan – $29,003,337
- SOFR + 3.5% with potential to go lower if
SOFR drops - 66.2% Loan-to-Cost (LTC)
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- SOFR + 3.5% with potential to go lower if
Property Information
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- Current owner is operating below market. Vacancy on property has averaged 15% over the last 12 months and market vacancy within a 3-mile radius is roughly 6%. With a revamped marketing strategy and improved on-site operations, we have an opportunity to “raise” this asset to market and capitalize on its historic underperformance relative to the surrounding market.
- Our low-cost basis on entry versus replacement cost for a similar property is very attractive. Rough per-unit acquisition price on the property is $135k, while the per-unit cost of undertaking a new build on a similar property is $230k.
- The current owner of the asset had already renovated 45% of the property units as well as the clubhouse before being forced to sell.
- We project cash distributions to investors during the life of the project, including during construction, with the majority of return on the project realized on exit
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*These are all preliminary estimates, with no guarantee of performance, and involve risk.
Belle Grove at Custer
(Midwest Multifamily-Closed Deal)
Prevail Real Estate Opportunities is pleased to present Belle Grove at Custer, an acquisition and renovation of a 202-unit multifamily property located in Richardson, TX.
Our partner, ClearWorth Capital is an experienced Dallas based multifamily owner and operator with more than 5,000 units under management. ClearWorth has acquired and renovated 24 multifamily projects with a combined value of more than $700 million. Prevail investors will be providing $4,000,000 of a total of $13,070,000 in equity for this acquisition and renovation. Investor Return Summary*
- IRR Targeted:Â Â Â 21%
- 3 Year Average Cash on Cash:Â Â Â 7.85%
- Proforma Hold:Â Â Â Â 3 Yrs
Investment Snapshot
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- Initial Project Cost: $35,500,000
- Equity: $13,070,000
- Initial Loan: $22,430,000
- Minimum Investment: $50,000
- Average unit (SF): 959
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Property Information
- The purchase price of $154,455 per door ($161 psf) is substantially lower than market replacement costs.
- This 202-unit multifamily property is currently 96% occupied and over the last 30 days, the current owner has increased rent by more than 9% on 20 lease renewals. Year over year rent growth in the area has been 20.75%.
- The current owner has invested $10,526 per unit over the last 12 months in upgrades and improvements. Our plan is to invest an additional ~$13,000 per unit to complete internal upgrades that will support further rent increases to market.
- Belle Grove is located in Richardson, TX close to hundreds of thousands of jobs. Single family homes in the area have appreciated more than 20% in the last year and the complex is just south of the ‘Canyon Creek’ neighborhood with home values ranging from $450k- $1MM+.
- Within a 3-mile radius, there are 38 properties that are all 96% occupied. There is only 1 new complex under construction in the area and Belle Grove’s post renovation rents will be ~$500 less per unit than the new complex rates.
*These are all preliminary estimates, with no guarantee of performance, and involve risk.
Company Info
This communication is neither an offer to sell nor a solicitation of an offer to buy any security. An offer may only be made via a written offering document by Prevail Alternative Assets, LLC (“Prevail”). Prevail will provide such offering documents (“Documents”) only to qualified accredited investors and has prepared this communication solely to enable you to determine whether you are interested in receiving additional information about it or the real estate project summarized above (the “Project”). This communication must be read in conjunction with the Documents prior to making any investment decision. Information about the Project contained herein has not been audited or reviewed by any third party. While projections about the Project’s future performance is based on Prevail’s experience and good faith judgments, the recipient should understand that projections are based on numerous assumptions, including that the current economic environment continues, that existing asset performance trends will continue to track business plans, that historical behavior of the Project’s property type will not change, that perception of market opportunities for disposition will hold true, and that the competitive landscape within which the Project operates will not change. Returns to investors would be contingent upon numerous events occurring and subject to considerable risks. Significant assumptions were made by Prevail to calculate the presented projections, including assumptions on the amount of leverage used by the Project, the Project having sufficient assets and cashflows, debt service and capital expenditures, the continuation of favorable leasing terms, the operating costs for the Project, the costs of taxes and insurance, the absence of claims against the Project, that lease terms (including rental rates) continue, that projected occupancy and rollover rates continue, that management and other expenses remain constant, and that property-level debt will not need to be refinanced at less favorable terms.
The Project’s future capitalization will be contingent upon numerous events occurring and subject to considerable risks. The occupancy and rollover rates of the Project will be dependent upon many factors beyond the control of the Project or Prevail. Any expression of targeted rates is merely a statement of a goal. Significant assumptions were made by Prevail to calculate the presented occupancy and rollover rates. Many factors can impact the Project’s after-tax returns, including the risk that tax laws may change. A myriad of factors may impact the Project’s ability to achieve any returns. Any number of factors could contribute to results that are materially different. All investment opportunities presented by Prevail involve substantial risk and may result in the loss of some or all of your investment. Please do not forward this email.
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