Project name
Landing Square (FULLY FUNDED)
Location
Landing Square, Atlanta, Georgia, USA
Initiator
REALIANCE USA B.V.
Local partner
Property Manager
Dayrise Residential
Category
322 ‘Class A-’ garden style rental apartments (2008)
Expected investment term
5 years
Exit strategy
Sell to an end investor
Total investment
US$ 49,066,500
Bank loan
US$ 36,200,000
Equity of Landing Square Multifamily LP (Project LP) US$ 12,866,500
Landing Square Capital LP US$ 11,500,000
ICG en REALIANCE US$ 1,366,500
Structure
Direct participation in Landing Square Capital LP, of which:
– Mezzanine Netherlands US$ 2,000,000
– Mezzanine Germany US$ 500,000
– Equity Dutch investors US$ 7,000,000
– Equity German investors US$ 2,000,000
Disclaimer: The underlying amounts may vary at closing
Participation
Vanaf US$ 125,000 (460 participations of US$ 25,000)
Distribution (per quarter)
8% per year for the equity (from the 2nd quarter 2020)
7% per year for the mezzanine (from the 2nd quarter 2020)
Projected gross total return
85,9% in 5 years
Projected gross ROI
17,2% per year
Unique selling points
Landing Square is the seventh project in which ICG and REALIANCE collaborate. The strategy of acquisition, renovation and management in comparable projects has proved itself.
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. The metroplex has showed a consistent employment growth over the last few years, which results in an increasing demand for rental apartments.
The location of Landing Square is close the important Interstate 285, favorable located in relation to e.g. employment centers in Downtown Atlanta and around Hartsfield Jackson International Airport (the largest airport in the world) as well as to retail centers like Greenbriar Mall and Camp Creek Marketplace.
The ‘Class A-’ complex with 322 large apartments has a mix of studio’s, 1- , 2-, and 3-bedroom apartments with open floorplans and modern ‘9 foot’ ceilings as well as light patio’s. By upgrading the units to the highest standard in the submarket the rents can be increased significantly. Besides that, for at least 20% of the units (64) there currently is a rent restriction. This will end in 2023 after which these rents can be raised as well.
As investor and property manager, the local partner is very experienced in similar projects in the south of the US, in which they have built up a portfolio of almost 16.000 apartment. With around 4.500 apartments, Atlanta is one of their key markets.
The defensive risk profile is partly based on a 10-year fixed rate loan with leverage of 73,8%. This eliminates the financing risk during the investment period and the ‘exit’ can be chosen at the right moment in the cycle. Because the long-term interest rates have recently declined, the expected interest rate is 4,25% per year. With this interest rate investors can benefit from attractive financing conditions.
Current physical occupancy rate of 96,6% in combination with ‘value-add’ potential provide an expected cash-on-cash return of 8% on an annual basis starting from the second quarter. At the ‘exit’ it is expected that the return can be more than doubled.
ICG and REALIANCE will participate for US$ 1.366.500 (13,2%) in the regular equity.
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl
