Projectname
The Gates at Valdosta (FULLY FUNDED)
Location
The Gates at Valdosta, Georgia, USA
Initiator
REALIANCE USA B.V.
Local partner
Property Manager
Category
Student housing
Expected investment term
36 months
Exit strategy
Sale to an (end) investor
Total investment
US$ 9,500,000
Bank loan
US$ 7,125,000
Equity Project LP US$ 2,375,000
– T2 Investments (35%) US$ 831,250
– Campus Realty Advisors (30%) US$ 712,500
– The Gates at Valdosta Capital LLLP (35%) US$ 831,250
Equity Capital LP US$ 850,000
– Participation The Gates at Valdosta LP US$ 831,250
– Costs Capital LP US$ 18,750
Structure
Participation in Gates at Valdosta Capital LLLP
Participation
Minimum of US$ 50,000 (34 participations of US$ 25,000)
Distribution from year 1
Average 9.9% per year
Projected gross total return
66.5% over 3 years
Projected gross return (ROI)
22.2% per year
Unique selling points
Student housing is a growth market and an interesting alternative to traditional rental apartments especially considering the good performance even during the financial crisis.
The Valdosta State University is a medium-sized university with 11,431 students and has a clear growth ambition with the admission of students from a number of surrounding states.
With 2,857 student rooms, only 25% of the total number of students can live ‘on-campus’-, so 75% is dependent on housing outside of the campus.
Complex with 102 existing apartments and 222 rooms is in a good location and close to the university, where the rooms distinguish themselves from its direct competitors with relatively large rooms.
Current occupancy of 91% offers the opportunity to do a quarterly distribution and with the renovation there is an “upside” potential.
The acquisition of the complex is realized at a cap rate of 7.6%, which is significantly higher than usual for similar types of real estate.
Local partner has a long-standing experience in developing, renovating and managing student housing and the experience with them in a development project is excellent.
There is a cooperation with T2 Investments, which, in addition to a role in the GP, contributes half of the equity of the Limited Partners.
The local partner participates with US$ 712,500 or 30% of the required capital.
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl
