Analysis of Investments

BR Sonoma Pointe

Bluerock

Bluerock Sonoma Pointe is an investment into a Class A Multifamily apartment complex located in Kissimmee, Florida. The property was built in 2015 and has a total of 216 units.

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.56%
  • Initial Occupancy 95.40%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 5.02%
  • Investor Purchase Price $44,533,951
  • Total Offering Size $18,803,951

Loan Information

The total loan is $25,730,000 and is from KeyBank National Association under the Fannie Mae DUS program. The term is for a total of 10 years and the first 5 years are interest only. When amortization begins it is on a 30 year schedule. The interest rate is fixed at 3.99%.

  • Yr. 1 DSCR 2.12
  • Loan-to-Offering 57.78%
  • Hold Period DSCR 2.02

Tenant Information & Lease Terms

Leases are signed on an individual basis at multifamily properties. The property manager will negotiate terms on a case by case basis. Leases are generally signed on a 12 month basis; however, this may differ for each tenant. A security deposit must be provided by the tenants and subleasing is not allowed.

Key Positives

  • The property has excellent amenities and has distinguished itself in the local market.

  • The demographics of the local area are strong with populations above 6 figures in the 5-mile radius.

  • The property was newly constructed in 2015 and therefore should require less capital expenditures to maintain it properly.

Key Risks to Consider

  • The cap rate to investors is low (5.02%).

  • There are newer units entering the local market. This will increase competition and may lead to lower occupancy and rental rates at the property. This investment is underwritten at 3.23% rent growth and that is expected to decrease to 1.4%.

  • The stabilized occupancy at the property is above the submarket and the current occupancies of the rental comparisons.

Investment Sponsor Information

Bluerock

According to the sponsor's website: "Bluerock is a national real estate investment firm headquartered in Manhattan with regional offices in Southfield, Michigan, Boise, Idaho and Newport Beach, California. Bluerock is a leading private equity real estate asset manager with a focus on Core-Plus, Value-Add, Opportunistic and Development investment strategies, and has transacted over 9 million square feet of residential and commercial real estate acquisitions since its inception in 2002. Bluerock's key principals have an average of 25 years investing experience, have been involved with acquiring over 30 million square feet of real estate with approximately $10 billion in value, and have helped launch leading real estate private and public company platforms."

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