Penn Capital's 192-unit Acquisition in North Carolina

[Percy N.]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $34,700,000
Cash invested: $7,500,000

192-unit institutional class B+ property located in between the Research Triangle Park area and Greensboro, NC.

What made you interested in investing in this type of deal?

We specialize in owning and operating (we are vertically integrated and manage our own properties) multifamily in markets that have good job growth and good population grown but are underserved and fly below the radar.

After underwriting many deals in the North Carolina markets for almost 18 months we found an off-market deal that met our stringent underwriting criteria.

How did you find this deal and how did you negotiate it?

This was an off-market deal that needed a lot of negotiations with the sellers and we finally convinced them to sell it to us and our investors.

How did you finance this deal?

Through agency debt at ~67%, pref equity from an institutional investor and common equity from our investor-partners.

How did you add value to the deal?

Value-add via cosmetic renovations to the units.
Added additional services that the residents request.

What was the outcome?

We are in the midst of implementing our business plan.
Occupancy is at 94%

Lessons learned? Challenges?

We have gained a lot of real world experience from our 10+ syndications as lead sponsors.