Property Details
Below Market Rents  Below Market Occupancy  Repositioning Opportunity  NOI Growth 
Asset Profile
Value Add

LURIN: The Emerald Coast 7 (Florida Panhandle Portfolio)

Florida Panhandle

Multi-Family Property
LURIN Dallas, TX
LURIN
  • IRR 36.85%
  • Equity Multiple 2.49x
  • Hold Period 3Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 11.96% in Y3
  • First Distribution Dec 2023
  • Distribution Frequency Quarterly
  • Co-Investment 10% ($2.12M)
  • Preferred Return 9%
  • Investor Profit Share 65%
  • Asset Profile Value Add
  • Loan-to-Value 80%
  • Current Occupancy 89%

About this Property

"A portfolio of 7 value-add apartment communities in the Florida Panhandle, where LURIN plans to use its in-house Construction and Property Management teams to extensively renovate and reposition the assets in some of the best performing markets for multifamily housing."

- Jon Venetos, LURIN

 

Property  7 Property Portfolio
# of Units 616
Current Occupancy  89%
Market Occupancy  95%
Current Average Rent $888
Average Market Rent $969
Acquisition Price $75,500,000
Price/SF $138.66
Stabilized Loan to Value 56%
Property Addresses

Sound View

1100 Pippen Dr
Mary Esther, FL 32569

The Cove

119 Monahan Dr
Fort Walton, FL 32547

Briarwood

2203 Beck Ave
Panama City, FL 32405

Callaway Bay

1406 S Berthe St
Panama City, FL 32404

Admiral Pointe

100 Redwood Circle
Pensacola, FL 32506

Westwood Landing

1665 Dogwood Place
Pensacola, FL 32505

Hilburn Apartments

6030 Hilburn Drive
Pensacola, FL 32504

Year Built 1995 1969 1979 1983 1969 1974 1966
Year Renovated N/A 2020 N/A N/A N/A N/A N/A
Square Footage 92,400 55,795 64,800 45,814 125,525 80,320 78,830
# of Units 84 78 80 60 132 96 86
Current Occupancy 99% 99% 100%; 100% 69% 79% 96%
Market Occupancy  98% 98% 99% 99% 97% 97% 97%
Current Average Rents $1,117 $985 $854 $962 $781 $719 $913
Average Market Rents $1,200 $1,206 $973 $980 $843 $796 $902

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

Update 11/17/2021:

  • ”A strategic LURIN investor has a mandate to solely invest in vehicles with single tier promote structures. As such, LURIN has modified their promote waterfall for all investors, which is now reflected in the updated net return profile.”
  • ”The underwriting has been updated to include final debt terms. Leverage has decreased to 80% LTC or $79M; however, the spread increased by 65bps to 440bps over 1M US LIBOR.”
  • ”Over the past several months financials have improved at each of the properties. That said, the going-in financial position of the portfolio has improved.”
  • "Lastly, LURIN updated its market rent comparable survey and identified a $25/month on average increase on proforma rents across the portfolio.”

 

Why are you buying these properties?

Jon Venetos, LURIN: "LURIN has assembled a portfolio of seven properties, The Emerald Coast 7, in the Florida Panhandle totaling 616 units. The portfolio of assets includes properties in Fort Walton (The Cove and Sound View), Pensacola (Hilburn Apartments, Westwood Landing and Admiral Pointe), and Panama City (Briarwood Apartments and Callaway Bay). This portfolio creates a unique opportunity to invest in a collection of assets in one of the strongest rent growth markets in the US. LURIN’s in-house construction and operations teams also have proven track records and scale in Florida’s Emerald Coast of implementing renovation programs while outperforming originally underwritten rents. Additionally, the portfolio offers diversification benefits with assets of varying vintages that require a range of renovation upgrades and repositioning efforts, which are all areas in which LURIN has specialized expertise."

"All seven properties are off-market transactions with sellers who could not deploy sufficient capital to implement an effective value-add program. LURIN was presented the Fort Walton and Panama City assets from the same seller who sold LURIN two Fort Walton deals in 2019. LURIN recently exited those transactions after a two-year hold and achieved an estimated IRR of over 53% and 65% and multiples over 2.3x and 2.7x. The seller of two Pensacola assets acquired the properties in 2018 with minimal insurance coverage, and following Hurricane Sally, was unable to adequately repair the properties to their pre-storm conditions due to their reliance on third-party contractors to perform construction and maintenance. Both properties have many down units with faulty roofs and leaks, and the seller decided to exit the Florida market altogether. The 3rd Pensacola property is located next to one of LURIN’s existing Pensacola assets, and as such, LURIN has been in communication with the owner about exiting the asset. The asset has been neglected by the current ownership and is ripe for the deployment of a value-add improvement."

"The assets are located in some of the best performing markets for value-add multifamily housing in Florida and are supported by excellent demographics and market fundamentals. Recently named the “cyber coast”, the Florida Panhandle is quickly becoming a stronghold for healthcare, financial services, and technology companies as businesses relocate to take advantage of Florida’s business friendly tax environment, quality of life, cost of living and diverse employment base. In addition, the US military has a very strong and large presence in the region with six main military installations."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  1. "Premier Location: The Emerald Coast, which stretches from Pensacola to Panama City in Florida’s Panhandle, has experienced extraordinary growth over the past decade – a trend that accelerated during the pandemic with migration trends to the Southeast United States. Navy Federal Credit Union, the world’s largest credit union, employs over 5,500 people in Pensacola with plans to add an additional 5,000 over the next five years. Pensacola is also home to the University of West Florida and Pensacola State College, which combined have an enrollment of approximately 24,000 students. The region is home to six military installations, of which three are the largest USAF bases in the US. The military presence in the region is over 100,000 personnel and includes Hurlburt Field Air Force Base, Eglin Air Force Base, Tyndall Air Force Base, Training Center Corry Navy Base, NAS & Naval Hospital Pensacola Base and NAS Panama City Navy Base. "
  2. "Strong Market Fundamentals: Multifamily fundamentals have improved dramatically in the Florida Panhandle over the past five years. In the region, asking rents grew at an unprecedented rate during the first half of 2021 and both the average asking rate and annual rent growth rate reached a new record high in Q2 2021. According to AxioMetrics, rent growth and occupancy in the three major submarkets are as follows:
    • "Pensacola rent growth is 16% year-over-year and occupancy is 97%"
    • "Fort Walton rent growth is 22% year-over-year and occupancy is 98%"
    • "Panama City rent growth is 16% year-over-year and occupancy is 99%."
  3. "Proven Track Record in Panhandle: LURIN’s in-house construction and operations teams, Integrated Renovations (FKA as LURIN Construction Services “LCS”) and LURIN Property Management (“LPM”) have proven track records in Florida’s Emerald Coast of implementing renovation programs while outperforming originally underwritten rents. LURIN currently owns and operates 12 assets in Florida consisting of 2,761 units across four markets including: Fort Walton, Pensacola, Tampa, and Fort Myers. "
  4. "Nine of the 12 assets (1,148 units) are located in the Florida panhandle. LURIN has renovated over 750 units in the region and has completed over $30M of exterior/amenity improvements in the past 30 months. In addition, given LURIN’s scale in the area, LPM has the ability to attract and retain top talent on the operations front which allows for an immense competitive advantage in today’s tight labor market."

    "LURIN will be purchasing the Fort Walton and Panama City properties from the same seller as The Greens on 5th and Elevate at 604 West – both LURIN properties based in Fort Walton. LURIN recently exited those transactions after a two-year hold and achieved an IRR of 53% and 2.3x for Greens on 5th (vs underwritten 26% & 1.9x) and an IRR of 65% and a multiple of 2.7x for Elevate at 604 West (vs underwritten of 26% & 1.9x). In addition, specifically to the operations, LURIN underwrote rent increases to $1.29/sqft at Elevate and $1.31/sqft at Greens but achieved $1.49/sqft and $1.42/sqft respectively."

    "In addition to recent dispositions of the two Fort Walton assets, LURIN has achieved equal or exceeded underwritten rent increases across all of LURIN’s existing assets in the region. By way of example, in September 2020, LURIN acquired a portfolio in Pensacola, coined “The Pensacola 5” by LURIN, and immediately began implementing its value-add renovation strategy and management turnaround plans. Since takeover, LURIN has increased effective rents across the portfolio on average $431, or 54%, in newly renovated units."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s business plan vary slightly by property, however, the approach on all seven properties will be to improve on-site operations and to transform each of the properties into solid class-B communities through an extensive interior and exterior value-add strategy. LURIN’s renovation strategy will be focused on three key areas: i) interior upgrades, ii) exterior improvements, and iii) adding additional and improving existing amenities. LURIN believes its value-add investment will yield an average rental increase of $319 per month per unit. As previously mentioned, LURIN will be using its in-house construction teams for both interior and exterior renovations."

"It is LURIN’S intention to dispose of the asset roughly 36 months into the project life cycle after fully repositioning the asset, assuming normal market conditions. That said, opportunity may exist to refinance the asset prior to 36-month period, return LP capital and cash flow the asset for a period beyond 36-months."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted LURIN’s business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are several potential operational risks associated with the investment, including but not limited to: i) expiration of leases, ii) unexpected delays in construction, iii) cost overruns in construction, iv) due diligence may not reveal all underlying property conditions, v) financing and refinance risk, and vi) general local market risk for the Panhandle of Florida. Additional risks for this investment include unforeseen material events such as hurricanes or a global pandemic. LURIN believes these risks are mitigated through its vertically integrated platform, which controls construction and operations. Additionally, LURIN engages third party consultants to individually insure each property against unforeseen circumstances."

 

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

About this Property

"A portfolio of 7 value-add apartment communities in the Florida Panhandle, where LURIN plans to use its in-house Construction and Property Management teams to extensively renovate and reposition the assets in some of the best performing markets for multifamily housing."

- Jon Venetos, LURIN

 

Property  7 Property Portfolio
# of Units 616
Current Occupancy  89%
Market Occupancy  95%
Current Average Rent $888
Average Market Rent $969
Acquisition Price $75,500,000
Price/SF $138.66
Stabilized Loan to Value 56%
Property Addresses

Sound View

1100 Pippen Dr
Mary Esther, FL 32569

The Cove

119 Monahan Dr
Fort Walton, FL 32547

Briarwood

2203 Beck Ave
Panama City, FL 32405

Callaway Bay

1406 S Berthe St
Panama City, FL 32404

Admiral Pointe

100 Redwood Circle
Pensacola, FL 32506

Westwood Landing

1665 Dogwood Place
Pensacola, FL 32505

Hilburn Apartments

6030 Hilburn Drive
Pensacola, FL 32504

Year Built 1995 1969 1979 1983 1969 1974 1966
Year Renovated N/A 2020 N/A N/A N/A N/A N/A
Square Footage 92,400 55,795 64,800 45,814 125,525 80,320 78,830
# of Units 84 78 80 60 132 96 86
Current Occupancy 99% 99% 100%; 100% 69% 79% 96%
Market Occupancy  98% 98% 99% 99% 97% 97% 97%
Current Average Rents $1,117 $985 $854 $962 $781 $719 $913
Average Market Rents $1,200 $1,206 $973 $980 $843 $796 $902

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

Update 11/17/2021:

  • ”A strategic LURIN investor has a mandate to solely invest in vehicles with single tier promote structures. As such, LURIN has modified their promote waterfall for all investors, which is now reflected in the updated net return profile.”
  • ”The underwriting has been updated to include final debt terms. Leverage has decreased to 80% LTC or $79M; however, the spread increased by 65bps to 440bps over 1M US LIBOR.”
  • ”Over the past several months financials have improved at each of the properties. That said, the going-in financial position of the portfolio has improved.”
  • "Lastly, LURIN updated its market rent comparable survey and identified a $25/month on average increase on proforma rents across the portfolio.”

 

Why are you buying these properties?

Jon Venetos, LURIN: "LURIN has assembled a portfolio of seven properties, The Emerald Coast 7, in the Florida Panhandle totaling 616 units. The portfolio of assets includes properties in Fort Walton (The Cove and Sound View), Pensacola (Hilburn Apartments, Westwood Landing and Admiral Pointe), and Panama City (Briarwood Apartments and Callaway Bay). This portfolio creates a unique opportunity to invest in a collection of assets in one of the strongest rent growth markets in the US. LURIN’s in-house construction and operations teams also have proven track records and scale in Florida’s Emerald Coast of implementing renovation programs while outperforming originally underwritten rents. Additionally, the portfolio offers diversification benefits with assets of varying vintages that require a range of renovation upgrades and repositioning efforts, which are all areas in which LURIN has specialized expertise."

"All seven properties are off-market transactions with sellers who could not deploy sufficient capital to implement an effective value-add program. LURIN was presented the Fort Walton and Panama City assets from the same seller who sold LURIN two Fort Walton deals in 2019. LURIN recently exited those transactions after a two-year hold and achieved an estimated IRR of over 53% and 65% and multiples over 2.3x and 2.7x. The seller of two Pensacola assets acquired the properties in 2018 with minimal insurance coverage, and following Hurricane Sally, was unable to adequately repair the properties to their pre-storm conditions due to their reliance on third-party contractors to perform construction and maintenance. Both properties have many down units with faulty roofs and leaks, and the seller decided to exit the Florida market altogether. The 3rd Pensacola property is located next to one of LURIN’s existing Pensacola assets, and as such, LURIN has been in communication with the owner about exiting the asset. The asset has been neglected by the current ownership and is ripe for the deployment of a value-add improvement."

"The assets are located in some of the best performing markets for value-add multifamily housing in Florida and are supported by excellent demographics and market fundamentals. Recently named the “cyber coast”, the Florida Panhandle is quickly becoming a stronghold for healthcare, financial services, and technology companies as businesses relocate to take advantage of Florida’s business friendly tax environment, quality of life, cost of living and diverse employment base. In addition, the US military has a very strong and large presence in the region with six main military installations."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  1. "Premier Location: The Emerald Coast, which stretches from Pensacola to Panama City in Florida’s Panhandle, has experienced extraordinary growth over the past decade – a trend that accelerated during the pandemic with migration trends to the Southeast United States. Navy Federal Credit Union, the world’s largest credit union, employs over 5,500 people in Pensacola with plans to add an additional 5,000 over the next five years. Pensacola is also home to the University of West Florida and Pensacola State College, which combined have an enrollment of approximately 24,000 students. The region is home to six military installations, of which three are the largest USAF bases in the US. The military presence in the region is over 100,000 personnel and includes Hurlburt Field Air Force Base, Eglin Air Force Base, Tyndall Air Force Base, Training Center Corry Navy Base, NAS & Naval Hospital Pensacola Base and NAS Panama City Navy Base. "
  2. "Strong Market Fundamentals: Multifamily fundamentals have improved dramatically in the Florida Panhandle over the past five years. In the region, asking rents grew at an unprecedented rate during the first half of 2021 and both the average asking rate and annual rent growth rate reached a new record high in Q2 2021. According to AxioMetrics, rent growth and occupancy in the three major submarkets are as follows:
    • "Pensacola rent growth is 16% year-over-year and occupancy is 97%"
    • "Fort Walton rent growth is 22% year-over-year and occupancy is 98%"
    • "Panama City rent growth is 16% year-over-year and occupancy is 99%."
  3. "Proven Track Record in Panhandle: LURIN’s in-house construction and operations teams, Integrated Renovations (FKA as LURIN Construction Services “LCS”) and LURIN Property Management (“LPM”) have proven track records in Florida’s Emerald Coast of implementing renovation programs while outperforming originally underwritten rents. LURIN currently owns and operates 12 assets in Florida consisting of 2,761 units across four markets including: Fort Walton, Pensacola, Tampa, and Fort Myers. "
  4. "Nine of the 12 assets (1,148 units) are located in the Florida panhandle. LURIN has renovated over 750 units in the region and has completed over $30M of exterior/amenity improvements in the past 30 months. In addition, given LURIN’s scale in the area, LPM has the ability to attract and retain top talent on the operations front which allows for an immense competitive advantage in today’s tight labor market."

    "LURIN will be purchasing the Fort Walton and Panama City properties from the same seller as The Greens on 5th and Elevate at 604 West – both LURIN properties based in Fort Walton. LURIN recently exited those transactions after a two-year hold and achieved an IRR of 53% and 2.3x for Greens on 5th (vs underwritten 26% & 1.9x) and an IRR of 65% and a multiple of 2.7x for Elevate at 604 West (vs underwritten of 26% & 1.9x). In addition, specifically to the operations, LURIN underwrote rent increases to $1.29/sqft at Elevate and $1.31/sqft at Greens but achieved $1.49/sqft and $1.42/sqft respectively."

    "In addition to recent dispositions of the two Fort Walton assets, LURIN has achieved equal or exceeded underwritten rent increases across all of LURIN’s existing assets in the region. By way of example, in September 2020, LURIN acquired a portfolio in Pensacola, coined “The Pensacola 5” by LURIN, and immediately began implementing its value-add renovation strategy and management turnaround plans. Since takeover, LURIN has increased effective rents across the portfolio on average $431, or 54%, in newly renovated units."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s business plan vary slightly by property, however, the approach on all seven properties will be to improve on-site operations and to transform each of the properties into solid class-B communities through an extensive interior and exterior value-add strategy. LURIN’s renovation strategy will be focused on three key areas: i) interior upgrades, ii) exterior improvements, and iii) adding additional and improving existing amenities. LURIN believes its value-add investment will yield an average rental increase of $319 per month per unit. As previously mentioned, LURIN will be using its in-house construction teams for both interior and exterior renovations."

"It is LURIN’S intention to dispose of the asset roughly 36 months into the project life cycle after fully repositioning the asset, assuming normal market conditions. That said, opportunity may exist to refinance the asset prior to 36-month period, return LP capital and cash flow the asset for a period beyond 36-months."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted LURIN’s business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are several potential operational risks associated with the investment, including but not limited to: i) expiration of leases, ii) unexpected delays in construction, iii) cost overruns in construction, iv) due diligence may not reveal all underlying property conditions, v) financing and refinance risk, and vi) general local market risk for the Panhandle of Florida. Additional risks for this investment include unforeseen material events such as hurricanes or a global pandemic. LURIN believes these risks are mitigated through its vertically integrated platform, which controls construction and operations. Additionally, LURIN engages third party consultants to individually insure each property against unforeseen circumstances."

 

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

Offered By

LURIN

LURIN

Dallas, TX

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Assets Under
Management

Currently
$1.3B 30+ assets
Exited
$233MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Realized Returns

Total IRR
27%  
Equity Multiple
2x  
Annual Cash
N/R  
Years Of
Experience

As Principals
5+ years  
In Business
6 years  
Size
90 Staff * Dedicated investor relations
* All information is reported by LURIN as of 9/30/2021.
Assets Under
Management

Currently
$1.3B 30+ assets
Exited
$233MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Returns

Total IRR
27%  
Equity Multiple
2x  
Annual Cash
N/R  
Years Of
Experience

As Principals
5+ years  
In Business
6 years  
Size
90 Staff * Dedicated investor relations
* All information is reported by LURIN as of 9/30/2021.

Financials

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Location Details

Florida Panhandle

Jon Venetos, LURIN: "Sound View and The Cove are located in Fort Walton, which is in southern Okaloosa County between Pensacola and Panama City. Both properties are south of Eglin Air Force Base, the world’s largest air force base with over 20,000 employees. The heavy military presence facilitates strong job growth among technology and defense-contract-oriented firms. Among the well-known large local employers are L3 Technologies, Sierra Nevada Corporation, Lockheed Martin and Boeing."

"Briarwood and Callaway Bay are located in Panama City, which is in Bay County between Destin and Mexico Beach. Panama City is home to Tyndall Air Force Base and the Naval Support Activity Center with a combined total of 9,090 military and civilian personnel. Tyndall Air Force base is undergoing a $4.9 billion redevelopment and will be receiving 72 new F-35 fighter jets by 2023. In addition, the city is slated to break ground on the $520 million Gulf Coast Parkway development this year. The four-lane 30-mile highway is designed to spur economic development, reduce travel times to and from Panama City, provide a direct route for freight carriers between Highway 98 and 231, and allow easier traffic from US 231 to and from Panama City International Airport."

"Admiral Pointe, Westwood Landing, and Hilburn Apartments are located in Pensacola, which is 40 miles west of Fort Walton. Pensacola’s economy is distributed across Government and Military employment, Financial Services, Transportation and Utilities, Leisure and Hospitality, Education and Health. Pensacola main employers include Naval Air Station Pensacola (23,400 personnel), Pensacola Christian College (1,584 employees), Navy Federal Credit Union (8,697 employees), and Baptist Healthcare (7,347 employees). In 2021, Pensacola’s unemployment rate was 5.9%, with the 30-34 population benefiting from a 1.5% unemployment rate."

Documents

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