The real estate was acquired for $47,427,394 at an acquisition cap rate of 6.32%, compared to an as-is appraised value of $48,250,000.
Valuation ladder
Acquisition price$47.43M
Offering price$58.42M+23.2%
Appraised value$48.25M82.6% of offering
Premium / discount to appraised value
21.09%
Cap rate spread & load
Acquisition cap rate6.32%
Syndicated cap rate5.13%
119 bps of spread between acquisition and syndicated cap rate.
Upfront load (all-equity)9.45%equity = offering price
Load net of reserves6.03%
Acquisition Price
$47,427,394
Offering Price
$58,423,431
Appraised Value
$48,250,000
$48,250,000 (As-Is); $48,950,000 (As-Stabilized)
Upfront Load
$10,996,037
Load on Equity
—
Load on Offering Price
9.45%
Acquisition Cap Rate
6.32%
Syndicated Cap Rate
5.13%
Premium / Discount
21.09%
Appraisal / Offering %
82.59%
Less Reserves %
3.42%
Strengths
- Acquired at $47,427,394, slightly below the as-is appraised value of $48,250,000
- Going-in acquisition cap rate of 6.32%
Concerns
- Syndication compresses effective cap rate to 5.13%