Blocks
This is a sample of a Delaware Statutory Trust offering. DSTs are illiquid private placements offered under Reg D to accredited investors only. The figures below are sourced from the sponsor's Private Placement Memorandum. Year-one cash-flow, cap-rate, and DSCR figures are projections, not guarantees. Loss of principal is possible.
About this offering
This is offering comes from Passco and consists of a single 400-unit apartment complex in Dunwoody, GA. The property was built in 2008 and is located roughly 16-miles north of Atlanta.
Key metrics
- Year 1 Cash Flow
- 5.00%
- Year 1 Cap Rate
- 4.93%
- Investor Purchase Price
- $84.75M
- Offering Size
- $37.95M
- Year 1 DSCR
- 2.15
- Hold Period DSCR
- 2.01
Debt structure
- Loan Amount
- —
- Lender
- —
- Program
- —
- Interest Rate
- 3.88%
- LTV
- 55.22%
- Term
- 10 years
- Interest Only
- 5 years
- Amortization
- —
Specifications
- Units
- 400
- Year Built
- 2008
- Occupancy
- 96.75%
- Strategy
- Sponsor intends to upgrade the property through exterior paint and full bottom floor renovations. Property rents are 65% below high end of market for 1BR units and 53% for 2BR units.
Market analysis
- Population
- Population and incomes are strong across the 1, 3, and 5-mile area
- New Supply
- Local competition is high; submarket saw 3,000 new units added in 2017
Principal risks
- R01Local competition is high and a large amount of units either planned or under construction. This could affect occupancy and future rent growth. The submarket saw 3,000 new units added in 2017.
- R02The 4.93% cap rate for this offering is low although the sales comps cap rate average is 4.89%. Nevertheless, with interest rate set to increase and historical cap rate compression there is a risk that investors buying in to a market at the height may find a full return of capital difficult if a recession occurs.
Property imagery
PASSCO
According to the sponsor's website: "Since 1998, Passco Companies, LLC has operated throughout all market conditions and cycles. The company has acquired over $4 billion in multifamily and commercial real estate in the United States. Since its inception, Passco Companies has become a recognized provider of investment opportunities in real estate projects.
Passco Companies is directed by a team of dedicated senior real estate professionals whose experience in the business averages 34 years, and who, collectively, have acquired over $30 billion in investment real estate projects."
Request the full offering package for Blocks
Private Placement Memorandum and sponsor materials available to accredited investors only.