The real estate was acquired for $66,600,000, representing a $1,500,000 discount to appraised value at a 5.81% cap rate. Total acquisition costs including reserves reach $74,380,024.
Valuation ladder
Acquisition price$66.60M
Offering price$78.11M+17.3%
Appraised value$1.50M1.9% of offering
Premium / discount to appraised value
41%
Cap rate spread & load
Acquisition cap rate5.81%
Syndicated cap rate5.81%
0 bps of spread between acquisition and syndicated cap rate.
Upfront load on offering6.00%
Load on equity9.45%
Load net of reserves-1.20%
Acquisition Price
$66,600,000
Offering Price
$78,111,498
Appraised Value
—
Upfront Load
—
Load on Equity
—
Load on Offering Price
6%
Acquisition Cap Rate
5.81%
Syndicated Cap Rate
5.81%
Premium / Discount
41%
Appraisal / Offering %
—
Less Reserves %
2.56%
Strengths
- Purchase price executed at $1,500,000 below appraised value
- 5.81% entry cap rate matches prevailing institutional benchmarks
Concerns
- Total acquisition cost with reserves expands basis to $74.38M