Midwest Portfolio, IN/OH
Adding to our existing 282-unit property in Cincinnati, the Views of Mt Airy, this 772-unit portfolio is really well located to allow us to capture more of the market upside. Positioned from the north side of Louisville, KY (Southeast IN) through Cincinnati and over to Columbus, OH we're really excited about the economies of scale we can also achieve for all of the needed renovations.
We're buying this portfolio at an in-place 6-7% cap (do those even exist anymore?) and a low 60% loan-to-cost. Low leverage, high cap rate, loan assumption/new debt at 4% rate - yes, I'm very excited about this deal. While we obviously still like our Southeast and Texas markets, this one provides the stable/slower growth side of the portfolio at a very low risk point. The purchase price at $70k/door is about 30% of replacement cost. We're in markets where the barrier to entry is high, the income and median household growth is strong, and there's no new inventory to compete with. It's a win-win.
We've completed our due diligence walks, as we do with every property, and confirmed our initial assumptions regarding interior renovations and exterior upgrades. And just a heads up, the live webinar below was prior to a restructuring of the deal. The powerpoint slide (slide deck) has the latest updates. Returns were slightly higher post-restructure as we were able to lower our overall cost of capital.
