The properties were acquired for $48,433,606 at a 6.66% cap rate, at a discount exceeding $1,350,000 to appraised value. Total acquisition costs including closing expenses and carry reach $52,476,257.
Valuation ladder
Acquisition price$48.43M
Offering price$60.05M+24.0%
Appraised value$1.35M2.2% of offering
Cap rate spread & load
Acquisition cap rate6.66%
Syndicated cap rate6.66%
0 bps of spread between acquisition and syndicated cap rate.
Upfront load (all-equity)9.45%equity = offering price
Load net of reserves6.54%
Acquisition Price
$48,433,606
Offering Price
$60,051,084
Appraised Value
The portfolio was purchased at a discount of more than $1,350,000 below its appraised value, but no acquisition cap rate or going-in yield is disclosed in the excerpts provided.
Upfront Load
—
Load on Equity
—
Load on Offering Price
—
Acquisition Cap Rate
6.66%
Syndicated Cap Rate
6.66%
Premium / Discount
—
Appraisal / Offering %
100%
Less Reserves %
2.91%
Strengths
- Purchased at a discount of >$1,350,000 below appraised value
- 6.66% acquisition cap rate
Concerns
- Carrying costs total $1,046,823