All Forum Posts by: Rob Anderson

The biggest problem right now is debt so I'd work on getting your construction financing in place and making sure your underwriting still works before raising any equity to fund your deal.  

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 in Spring, TX, a suburb of Houston. Project costs, including the construction budget and fees, totaled $36.5 million (~$110,600 per unit).

The Grayson was sold on April 24th, 2019, for $48.8 million (~$147,900 per unit). 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

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

We've switched from value add to ground up construction for multifamily deals.  The numbers still work for construction.