Fort Myers Multifamily
The offering is a Class B Multifamily property in Fort Myers, Florida. Built in 1988, with a second phase completed in 1997, the property is a mix of 1-, 2-, and 3-bedroom units, totaling 296.
The Sponsor’s value-add strategy includes installing new appliances, updated countertops, cabinets fixtures, hardware, lighting and wood-style floors for 168 of the units.
- Year 1 Cash Flow 4.60%
- Initial Occupancy 92.60%
- Est. Time Horizon None
- Yr 1. Cap Rate to Investors 5.09%
- Investor Purchase Price $51,820,364
- Total Offering Size $23,971,364
The loan is a 15-year term (first 8-years are interest-only), 4.75% fixed rate, on a 30-year amortization schedule. A cash sweep will be triggered if the Debt Service Coverage Ratio drops below 1.35.
Prepayment of the loan can be paid in full at any time, with these conditions:
- If paid in the first 174 months: a penalty of whichever is greater, (A) yield maintenance premium or (B) 1% of the loan's outstanding principal.
- If paid after 174 months, but before month 178: a penalty of 1% of the loan's outstanding principal.
- If paid after month 178: no penalty for prepayment.
- Yr. 1 DSCR 1.88
- Loan-to-Value 53.74%
- Hold Period DSCR 2.04
A long-term 15-year loan, 8 of which are Interest-Only, will bridge a potential recession.
A value-add strategy to 57% of the units.
A low cap rate especially for a Class B property of 5.09%.
Reserves depend on bonus rent being accrued.
Since nearly all bonus rents will be put towards the reserves, this decreases cash flow with an average Cash-on-Cash return of 4.75%.
The rents are above market: 15%, according to CoStar; 5% according to the appraisal.
The Inland Real Estate Group of Companies, Inc. ("Inland"), is an industry leader and one of the nation's largest commercial real estate and finance organizations. As a business incubator, we specialize in creating, developing and supporting Inland member companies that provide commercial real estate-related services and alternative investment funds, including limited partnerships, institutional funds and non-listed and listed REITs.