Analysis of Investments

Colorado Multifamily Portfolio 3

Inland

This offering includes 3 Colorado multifamily properties. There are 710 units across the 3 properties.

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.00%
  • Initial Occupancy 95.23%
  • Est. Time Horizon None YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 4.79%
  • Investor Purchase Price $186,080,998
  • Total Offering Size $91,372,086

Loan Information

The loan for the Aurora property is non-recourse, has a fixed rate of 3.92%, and is interest-only for five yeras.

The loan for the Broomfield property is non-recourse, has a variable rate of one-month LIBOR plus 165 basis points, includes a hedge option by means of a Swap within the initial 177 months.

The loan for the Ft. Collins property is non-recourse and has a fixed rate of 3.64%, and is interest-only for five years.

  • Yr. 1 DSCR 2.41
  • Loan-to-Offering 50.90%
  • Hold Period DSCR 2.2

Tenant Information & Lease Terms

Aurora: The tenants at this property primarily work in Healthcare and Tech. The top employers are HealthONE and University of Colorado Hospital; there are also other health companies in the top employer list. The lower cost of living and lower business costs are drawing tech companies from Boulder and Silicon Valley.


Broomfield: The tenants at this property primarily work in Healthcare and Tech. The top employers are HealthONE and University of Colorado Hospital; there are also other health companies in the top employer list. The lower cost of living and lower business costs are drawing tech companies from Boulder and Silicon Valley. 


Ft. Collins: The tenants at this property primarily work in Healthcare and Education. The top employers are Colorado State University and University of Colorado Health. There is also a few tech companies in the top employer list such as HP, Industry that is producing income at a high rate is mining, construction, and manufacturing.

Key Positives

  • The market for apartment rentals in Colorado, Denver, and Ft. Collins are growing, creating an increase in demand for multifamily housing.

  • There is also an increase in income in the area, leading to an increase in deman for Class A housing in particular, allowing for potential future rent increases. 

Key Risks to Consider

  • Low CAP Rate at 4.79%

  • The underwriting on the offering is aggressive. In particular the effective gross rent is projected to grow over 14% and the net operating income is project to grow 8.5%

  • Should a swap occur, its rate will be set in interms of market conditions, which are unknown.

Investment Sponsor Information

Inland

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.

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