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Well Maintained Class A Asset with Value‐Add


We are seeking LP investors for the acquisition
of The Milo (the “Property”), a 230‐unit multifamily property in Houston,
Texas (Houston MSA). Completed in 2017, the Property was owned and
operated by Carlyle and features best‐in‐class design and construction. The
high quality of the project resulted in an impressive lease‐up velocity resulting
in a stabilized 92% occupancy. The Property is situated within Houston’s
Energy Corridor right next to a new development that is offering $200+ higher
rates than The Milo.

We plan to buy and hold the Property, continuing to improve its
operating metrics through diligent expense management and implementing a
value‐add program to renovate all 230 units. The upgrades will start in Year 1
and will include adding stainless steel appliances, granite countertops to the
bathrooms and study desks, adding hardwood floors, and adding smart home
packages. The upgrades are projected to generate $150 additional premium
per unit per month. Carlyle is currently receiving a $75 premium per month
for only adding hardwood floors to the living room.

The Property is currently 92% occupied with in‐place effective rents of $1,146
per month. Though the Property is currently achieving 4% growth on
renewals and 5% growth on new leases, the Sponsor is conservatively
showing 2% rent growth in Year 1 of the pro forma and 3% annual rent
growth thereafter. The Sponsor is contemplating a 3–5‐year investment
period. Given the high quality of the asset, it is likely that the next buyer will
be an institutional investor.

The Property is conveniently located on Westheimer Rd, offering excellent
visibility as well as superior access to Houston’s major highways. The Property
is within walking distance to major employment hubs.


ADDRESS 13250 Westheimer Rd Houston, TX 77077

PURCHASE PRICE $ 35.4 Million

STYLE Garden

Energy Corridor/City Centre/ SUBMARKET Briar Forest

NUMBER OF UNITS 230

YEAR COMPLETED 2017

NET RENTABLE AREA 215,176 SF

AVERAGE UNIT SIZE 863 SF

BUILDINGS
four-story residential buildings
clubhouse building with leasing office, fitness center, maintenance shop, mailroom

5 detached garage buildings

MARKET RENT $1,146 PER UNIT

MARKET RENT PSF $1.32

ACREAGE & DENSITY 7 Acres | 32.8 Units/Acre

PARKING 321 spaces | 1.39 spaces/unit

HOUSTON INDEPENDENT SCHOOL DISTRICT
Daily Elementary
West Briar Middle
Westside High

Purchase Price ‐ $35,400,000
Project Equity Required ‐ $9,928,300

3 Year hold
8% preferred return, annual compounding
Average Cash on Cash Return of 9%
Gross IRR 19%
AAR 20%

New First Lien Bridge Loan
Modeled Debt Assumption
$28,618,000 Initial Loan
3-Year (two 1-year extensions)
80% LTC
100% CapEx
3 Years Interest Only
Floating Rate 325 + LIBOR

While touring The Milo, we noticed the
clubhouse felt small and restricted. The onsite
team expressed they would have more success
converting tours to leases if the clubhouse felt
as luxurious as direct comps.

By upgrading the clubhouse to game plan is to
be able to have a higher lead to lease
conversion rate and be able to reduce marketing
expenses.

The onsite team also informed us when touring
they have recently implemented a backyard
program and are having a lot of success with it.
We plan to add 50 more backyards and charge
a $75 dollar premium monthly.

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Disclaimer: DealStream has not independently verified any of the information in this listing and makes no warranty as to its accuracy or completeness. This listing does not constitute an offer to sell, solicit or make an offer to buy an investment interest. Offers to sell, or the solicitation of offers to buy, any security can only be made through official offering documents, such as a subscription agreement and private placement memorandum.