Case Study- Lavera Lake Highlands
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Lavera Lake Highlands (Midwest Multifamily)
Prevail Real Alternative Assets is pleased to present Lavera Lake Highlands, an acquisition and renovation of a multifamily property located in Dallas, TX. In 2022 our firm partnered with Clearworth on Belle Grove at Custer, a multifamily property in Richardson, TX that is currently paying out a quarterly dividend to each investor and is performing as projected. Our partner, ClearWorth Capital is an experienced Dallas-based multifamily owner and operator with more than 5,000 units under management. They provide an opportunity for investors to achieve superior risk-adjusted returns through a comprehensive, hands-on investment selection and management approach. If you have any questions, please reach out to your advisor or contact Regan Smith at rsmith@prevailiws.com
Investor Return Summary*
- Class A – Total of $2,850,000
- $150,000 per share
- 9% preferred return
- 28.05% targeted IRR
- Class B – Total of $1,489,500
- $50,000 minimum
- 9% preferred
- 26.11% targeted IRR
Investment Snapshot
- Total Project Cost – $41,532,203
- Total Equity – $14,589,940
- Prevail Equity – $4,339,940
- Debt & Incentives – $26,942,264
- 64.9% LTC, 36 month term,
27 month Interest only
- 64.9% LTC, 36 month term,
Property Information
- Lavera finds itself nestled amidst a thriving landscape of new luxury developments. The surrounding area is undergoing rapid gentrification, attracting a wave of young and affluent families who are drawn to its premier schools and abundant entertainment options.
- Despite recent fluctuations in capital markets, DFW assets have maintained robust values, as demonstrated by transactions in late 2022 and early 2023.
- With over 7.9 million residents, the DWF metroplex ranks as the 4th largest metro in the U.S. Dallas offers a thriving job market, provides a high quality of life, and affordable living costs which is why it’s a sought-after city for all demographics.
- Lavera is currently being outperformed by renovated comps, which are commanding rents that are $400 or higher. However, with a meticulous renovation strategy in place, we have the opportunity to reposition and reprice this asset effectively within the market.
- Over two years, rents in the Lavera peer group experienced a growth of 36%, whereas Lavera only raised rents by 11% during that time due to lackluster management throughout the lease-up phase. Rent is rapidly increasing even with the current team in charge, but we believe there is an opportunity to strategically raise rents even more under our leadership.
- Lavera’s current pricing significantly undercuts recent market rates, reflecting the seller’s concession aimed at attracting a buyer with a proven track record of successful transactions.
*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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