Five-year floating rate debt at 300 basis points over 3-Month LIBOR with one year of interest-only payments.
At the time of acquisition, the community had only recently leased up to 100% and thus did not have a positive trailing 12-month income history. With the seller being familiar with RADCO’s reputation in the marketplace and knowing that few buyers would have understood its value without proven cash flow, RADCO was able to acquire the property in an off-market deal.
$433,000 capital improvements plan included interior and exterior upgrades, common area updates, and amenity enhancements.
At the end of June 2016, revenue had increased 55% and in-place rents had increased 39% following the acquisition.
After a 42-month hold, the sale achieved a 36.45% Limited Partner IRR and a 2.24x Limited Partner equity multiple.