Analysis of Investments

Denver MSA Multifamily 2

Inland

This Inland offering contains a Class-B multifamily complex located in Aurora, a suburb of Denver. The sponsor intends to make upgrades to a small number of units at the property.  

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.10%
  • Initial Occupancy 97.08%
  • Est. Time Horizon 10 years YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 5.03%
  • Investor Purchase Price $106,459,913
  • Total Offering Size $53,962,913

Loan Information

This offering is using non-recourse debt which has a 10-year term, interest only for the first 5-years, a fixed interest of 3.60%, and a 30-year amortization schedule.

  • Yr. 1 DSCR 2.68
  • Loan-to-Offering 49.31%
  • Hold Period DSCR 2.43

Tenant Information & Lease Terms

This is a typical multifamily property. Residents provide a security deposit and agree to generally acceptable conduct at the property including agreeing to maintain and not damage the units and common areas.

Key Positives

  • The property is well located near a recently completed light rail station, which provides direct access to the Denver CBD. 

  • Sponsor intends to upgrade some units in an attempt to add value and increase occupancy at the property. 

  • Population growth in the 5-mile area surrounding the property is projected to see strong 1.55% growth over the next five years. 

  • Low interest rate. 

Key Risks to Consider

  • Sponsor only intends to upgrade 47 of the 480 units at the property. This equates to less than 10% of the total units. The majority of the units have already seen renovations.  Any rent growth will rely mostly on organic rent growth within the submarket.

  • 5.03% cap rate is low for Denver and for value add investment properties.  

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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