The asset was acquired for $37,325,000, resulting in a 5.25% acquisition cap rate. Total acquisition cost including fees and reserves equals $44,994,000, reflecting an 8.38% syndicated cap rate.
Valuation ladder
Acquisition price$37.33M
Offering price$44.99M+20.5%
Premium / discount to appraised value
1%
Cap rate spread & load
Acquisition cap rate5.25%
Syndicated cap rate8.38%
313 bps of spread between acquisition and syndicated cap rate.
Upfront load on offering6.00%
Load on equity47.95%
Load net of reserves4.14%
Acquisition Price
$37,325,000
Offering Price
$44,994,000
Appraised Value
—
Upfront Load
—
Load on Equity
—
Load on Offering Price
6%
Acquisition Cap Rate
5.25%
Syndicated Cap Rate
8.38%
Premium / Discount
1%
Appraisal / Offering %
—
Less Reserves %
3.67%
Strengths
- Acquisition cap rate underwritten at 5.25%
- Clear submarket focus in Upper Arlington/Downtown Columbus
Concerns
- $7,669,000 spread between acquisition price and total offering cost
- Front-end load increases investor basis