Investment Info:
Large multi-family (5+ units) commercial investment investment.
Purchase price: $36,000,000
Cash invested: $6,000,000
Sale price: $48,800,000
In March of 2015 Bridgeview Real Estate started development on a 330-unit multifamily community named The Grayson Apartments (the “Project”) in Spring, TX, a suburb of Houston.
Project costs, including the construction budget and fees, totaled $36.5 million (~$110,600 per unit). The initial capitalization was funded with $30.500 million of senior financing, $4.7 million of PE equity, and $1.3 million of equity capital from BV investors.
The development and delivery of all 330 units was completed on time and on budget. The Project was fully (90%+) leased and stabilized by March of 2017. Upon stabilization, the Sponsor refinanced the asset to replace the high-interest construction loan.
The Grayson was sold on April 24th, 2019, for $48.8 million (~$147,900 per unit), an increase of ~33.7% relative to the total Project basis.
BV's investors realized an internal rate of return ("IRR") of 18.65% and a cash-on-cash return of 2.01x over the 49-month investment horizon.
What made you interested in investing in this type of deal?
The property is located just a few miles south of the Exxon Mobil campus that was just finishing out at the time.
How did you finance this deal?
Senior Debt and equity from a PE shop and individual accredited investors
What was the outcome?
A 2x return for investors in 49 months
