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

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.