The Borough Apartment Homes - Dallas/Fort Worth

DRCapitalHoldings is pleased to present the exclusive opportunity to acquire the Borough apartments, a 208-unit value-add community located in one of DFW’s top performing submarkets.

Borough offers a mix of one and two-bedroom floorplans, with an impressive average unit size of 786 square feet. Tenants also enjoy a well-rounded amenity package with a resort inspired swimming pool, grilling areas, clothes care centers, and controlled access gates.

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WHY WE LIKE THIS DEAL

Offering snapshot:

Our Ideal Criteria: We never recommend a deal that we aren’t investing in ourselves. We invest alongside our partners. As stewards of your capital, we’re primarily looking at the following criteria when vetting properties to see if they would be a good fit for our investors; Portfolio Highlights: Number of Units: 208 Built: 1981 Current Occupancy: 94% Average Unit Size: 786 sq ft 60% Bonus Depreciation for 2022 (77% benefit in total) 50% Return of Capital in Year 3 refinance DFW metroplex is ranked #1 relocation destination The submarket has experienced 16% YOY rent growth and 5.1% 5-year average rent growth Effective Rent: $957 ($1.22) vs Rent Comp Averages $1,219 ($1.58) Building exterior rehab completed by previous owner Deals that are conservatively underwritten. This means large contingency reserves, significant buffers for any capital improvement projects, ample expense growth factored in and modest rent growth. Breakeven rents and occupancy levels that allow plenty of downside protection so that the deal can cashflow even with significant negative headwinds. We expect a deal to meet it’s return specifications even in the event of cap rates moving unfavorably during the entire lifespan of the deal. Class B Units: 150-400 Opportunity: Value add/hybrid (value add + cashflow) Projected Returns: 8%+ cash on cash, 17%+ IRR, plus bonus depreciation tax benefits and re-fi/return of capital often in year 3. We expect all good deals to have a ‘preferred’ return such that LPs are paid first – this guarantees alignment of interests with GPs. After preferred return is paid, we typically expect a 80% share to go to LPs. Current ownership has invested significant capital into improving the property. Almost 50% of the property has been renovated. New ownership has the unique opportunity to either continue renovation in 50% of the units or push 100% of units to a premier renovation level matching nearby competitors Recently, the property has experienced phenomenal leasing trends. The most recent renovated leases have been signed at an an average of $1,121/unit. This represents a $255 premium over classic rents. Renovated units are seeing a lease trade out premium of 29%.

KEY DEAL POINTS

Investment profile VALUE ADD	Sponsor experience HYBRID	Property type Multi-Family
IRR 17%*	Equity Multiple 2.0x ($100K Investment*	Cash on Cash 8%*
Investment Period 6 years	Cost Segregation Bonus Depreciation (60% in Year 1)	Expected Closing August 2022
​Investors / GP Split 70/30	Preferred Return 8%	Total Return 100%

* Asterisk denotes a targeted metric (click to learn more). All targeted returns are stated in net-to-investor terms (i.e. net of fees and promote), provided by the sponsor, and subject to change.