Project name
Hampton Point (FULLY FUNDED)
Location
Hampton Point, Atlanta, Georgia, USA
Initiator
REALIANCE USA B.V.
Local partner
Property Manager
Category
276 garden style rental apartments
Expected investment term
5 years
Exit strategy
Sale to an investor
Total investment
US$ 32,079,390
Bank loan
US$ 23,739,000
Equity
US$ 8,340,390
Structure
Direct participation in Hampton Point Apartments LP of which:
– Mezzanine US$ 1,500,000
– Equity Dutch and German investors US$ 5,900,000
– Equity ICG and REALIANCE US$ 940,390
Participation
Minimum US$ 125,000 excl. 3% emission costs (236 participations of US$ 25,000)
Projected gross total return
90.6% over 5 years
Projected gross return (ROI)
18.1% per year
Distribution (per quarter, from the 2nd quarter)
8% per year
Unique selling points
Hampton Point is the fifth project in which ICG and REALIANCE enter into a partnership with a proven strategy in comparable projects.
Atlanta is one of the most dynamic regions of the US and has a favorable business climate for companies as well a good living environment for its inhabitants.
Of the 12 largest cities in the US, Atlanta has the second strongest employment growth, which results in an increasing demand for rental apartments.
Location of Hampton Point is close to Interstate 75, favorable located in relation to employment and retail centers in Henry County.
Henry County has a well-known school district, which is an important criterium in the choice for renting an apartment.
Rental prices in the submarket on the south side of Atlanta are too low to support new developments, so future competition will be limited to the current inventory.
Because Hampton Point was developed in three phases (1990, 1992 and 2000), the community has an excellent mix of different types of apartments, where the last two phases have a modern ceiling height (9-foot ceilings).
As investor and property manager, the local partner is very experienced in similar projects in the south of the US, with Atlanta as one of its key markets.
Defensive risk profile is strengthened by a 10-year fixed rate loan at an expected 4.75% per year, so during the investment term there is no refinancing risk.
Current physical occupancy rate of 98.6% in combination with ‘value-add’ potential provide an expected cash-on-cash return of 8% on an annual basis starting from the second quarter.
ICG and REALIANCE will participate for US$ 940,390 (13.7%) in the regular equity.
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl
