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

Ashbury Court Apartments

Laurel, MD (Howard County)

Multi-Family Property
Midloch Investment Partners Minneapolis, MN
Midloch Investment Partners
  • IRR 16.1%
  • Equity Multiple 1.55x
  • Hold Period 3Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 4.54%
  • Stabilized Cash on Cash 4.61% Y3
  • First Distribution Nov 2022
  • Distribution Frequency Monthly
  • Co-Investment 48.5% ($8.5M)
  • Preferred Return 9%
  • Investor Profit Share See Financials
  • Asset Profile Value Add
  • Loan-to-Value 61.3%
  • Current Occupancy 99%

About this Property

"Off-market, discounted, value-added acquisition of transit-oriented Class A Apartments located in the Washington D.C. and Baltimore MSAs"

-Andy Sinclair, Midloch Investment Partners

Property Address 10095 Washington Blvd N
# Units 156
Year Built 2008
Year Renovated N/A
Square Footage 166,819 sq. ft.
Current Occupancy 99%
Market Occupancy 96%
Current Average Rents $1,527
Average Market Rents $1,950
Purchase Price $35,000,000
Price/Sq. Ft. $210/Sq. Ft.
Loan to Value 61.3%
Stabilized Loan to Value 43.8%

Top Questions

All answers are provided by the sponsor, Midloch Investment Partners, or its representatives.

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

Andy Sinclair, Midloch Investment Partners:

  • Attractive Basis: Acquiring at $224,358/unit for 2008 vintage Class A apartments. This price excludes any value assigned to the income-producing commercial space.”
  • Under Market Rents: The property is approximately ±99% occupied and rents for nearly $400- $500 less than other comparable properties in the markets.”
  • Low Leverage: The property benefits from a low leverage and amortizing Fannie Mae loan at ± 55% of cost. This low leverage allows us to consider a refinance or a sale for a liquidity event in the future.”
  • T.O.D. Central Location: The central location in Howard County is located approximately 30 minutes from downtown Washington DC and 30 minutes from downtown Baltimore. This Transit-Oriented Development (“T.O.D”) is adjacent to The Marc Train station at Paddock Pointe.”
  • Path of Growth: This central location has attracted key development including, Paddock Pointe, a master-planned community adjacent to the property.”
  • Potential Value Creation: The property has several vacant, never occupied commercial suites that ownership will evaluate if they can lease out. Additionally, the property has a parking lot zoned for additional apartment units that could be an additional source of value.”

 

What is your investment strategy/business plan?

Andy Sinclair, Midloch Investment Partners:

  1. "Acquire at a Discount: Midloch is acquiring Ashbury at what Midloch believes to be a discount to market pricing both on a cap rate and a price per unit. Comparable product in the submarket has sold for ±$262,000/unit (real capital analytics) vs. the purchase price of $224,358. The purchase price also assigns no value to the commercial space which is generating income."
  2. "Raise the rents: The property is approximately ±99% occupied and rents for nearly $500 less than other comparable properties in the markets. The Management Team plans to raise rents to market rental rates while selectively renovating units. Midloch has budgeted ±$12,000 per unit for renovations."
  3. "Unlock Commercial Space Value: The property has 7 commercial suites totaling 16,500 SF total. Currently, only 3 spaces are occupied. The management team will look to unlock value by either leasing up the vacancies, using the space as amenities for the community, or exploring a conversion to additional apartments."
  4. "Flexible Liquidity Options : The property benefits from a low leverage and amortizing Fannie Mae loan at 55% LTC. Furthermore, the property is projected to amortize the loan by roughly $1 million in the first 3 years. Investors are projected to average a 7.11% cumulative yield combining the cash distribution yield and amortization yield. This low leverage could allow the management team to explore a liquidity event via a cash-out refinance at a later date.
  5. "Explore Potential Value of Parking: The property’s parking is zoned for additional apartment units. While Midloch’s business plan does not attribute any value to the parking, it could provide an attractive option to a future developer. The Management Team will assess several liquidity options including selling the properties as a portfolio, selling them as individual assets, or refinancing the portfolio."

 

How has COVID-19 impacted your business plan?

Andy Sinclair, Midloch Investment Partners: "COVID-19 is providing a chance to improve upon the previous management's leniency with tenant's during COVID-19. The previous management did not raise rents and allowed COVID-19 discounts. Given the quality of the asset and the location, Ashbury Courts Apartments was renting at a substantial discount to both 1980's-2010's vintage apartments. The New Ownership Team plans to fix those management issues upon a take over."

 

 

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

Andy Sinclair, Midloch Investment Partners:

"Low Leverage: The property benefits from a low leverage and amortizing Fannie Mae loan at ± 55% of cost. This low leverage allows the Management Team to consider a refinance or a sale for a liquidity event in the future."

"Attractive Basis: Acquiring at $224,358/unit for 2008 vintage Class A apartments. This price excludes any value assigned to the income-producing commercial space."

 

NOTE: All answers provided by the sponsor, Midloch Investment Partners, or its representatives.

“Midloch retains approval and voting rights over all major decisions. Midloch's operating partner and Co-GP, Pinacle Property Group (dba Corner Lot Advisors LLC), has minority management rights and will oversee day-to-day management and leasing. Please see the PPM for more details. The Joint Venture Agreement between the Midloch Co-GP and Pinacle Co-GP is available upon request from qualified investors."

About this Property

"Off-market, discounted, value-added acquisition of transit-oriented Class A Apartments located in the Washington D.C. and Baltimore MSAs"

-Andy Sinclair, Midloch Investment Partners

Property Address 10095 Washington Blvd N
# Units 156
Year Built 2008
Year Renovated N/A
Square Footage 166,819 sq. ft.
Current Occupancy 99%
Market Occupancy 96%
Current Average Rents $1,527
Average Market Rents $1,950
Purchase Price $35,000,000
Price/Sq. Ft. $210/Sq. Ft.
Loan to Value 61.3%
Stabilized Loan to Value 43.8%

Top Questions

All answers are provided by the sponsor, Midloch Investment Partners, or its representatives.

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

Andy Sinclair, Midloch Investment Partners:

  • Attractive Basis: Acquiring at $224,358/unit for 2008 vintage Class A apartments. This price excludes any value assigned to the income-producing commercial space.”
  • Under Market Rents: The property is approximately ±99% occupied and rents for nearly $400- $500 less than other comparable properties in the markets.”
  • Low Leverage: The property benefits from a low leverage and amortizing Fannie Mae loan at ± 55% of cost. This low leverage allows us to consider a refinance or a sale for a liquidity event in the future.”
  • T.O.D. Central Location: The central location in Howard County is located approximately 30 minutes from downtown Washington DC and 30 minutes from downtown Baltimore. This Transit-Oriented Development (“T.O.D”) is adjacent to The Marc Train station at Paddock Pointe.”
  • Path of Growth: This central location has attracted key development including, Paddock Pointe, a master-planned community adjacent to the property.”
  • Potential Value Creation: The property has several vacant, never occupied commercial suites that ownership will evaluate if they can lease out. Additionally, the property has a parking lot zoned for additional apartment units that could be an additional source of value.”

 

What is your investment strategy/business plan?

Andy Sinclair, Midloch Investment Partners:

  1. "Acquire at a Discount: Midloch is acquiring Ashbury at what Midloch believes to be a discount to market pricing both on a cap rate and a price per unit. Comparable product in the submarket has sold for ±$262,000/unit (real capital analytics) vs. the purchase price of $224,358. The purchase price also assigns no value to the commercial space which is generating income."
  2. "Raise the rents: The property is approximately ±99% occupied and rents for nearly $500 less than other comparable properties in the markets. The Management Team plans to raise rents to market rental rates while selectively renovating units. Midloch has budgeted ±$12,000 per unit for renovations."
  3. "Unlock Commercial Space Value: The property has 7 commercial suites totaling 16,500 SF total. Currently, only 3 spaces are occupied. The management team will look to unlock value by either leasing up the vacancies, using the space as amenities for the community, or exploring a conversion to additional apartments."
  4. "Flexible Liquidity Options : The property benefits from a low leverage and amortizing Fannie Mae loan at 55% LTC. Furthermore, the property is projected to amortize the loan by roughly $1 million in the first 3 years. Investors are projected to average a 7.11% cumulative yield combining the cash distribution yield and amortization yield. This low leverage could allow the management team to explore a liquidity event via a cash-out refinance at a later date.
  5. "Explore Potential Value of Parking: The property’s parking is zoned for additional apartment units. While Midloch’s business plan does not attribute any value to the parking, it could provide an attractive option to a future developer. The Management Team will assess several liquidity options including selling the properties as a portfolio, selling them as individual assets, or refinancing the portfolio."

 

How has COVID-19 impacted your business plan?

Andy Sinclair, Midloch Investment Partners: "COVID-19 is providing a chance to improve upon the previous management's leniency with tenant's during COVID-19. The previous management did not raise rents and allowed COVID-19 discounts. Given the quality of the asset and the location, Ashbury Courts Apartments was renting at a substantial discount to both 1980's-2010's vintage apartments. The New Ownership Team plans to fix those management issues upon a take over."

 

 

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

Andy Sinclair, Midloch Investment Partners:

"Low Leverage: The property benefits from a low leverage and amortizing Fannie Mae loan at ± 55% of cost. This low leverage allows the Management Team to consider a refinance or a sale for a liquidity event in the future."

"Attractive Basis: Acquiring at $224,358/unit for 2008 vintage Class A apartments. This price excludes any value assigned to the income-producing commercial space."

 

NOTE: All answers provided by the sponsor, Midloch Investment Partners, or its representatives.

“Midloch retains approval and voting rights over all major decisions. Midloch's operating partner and Co-GP, Pinacle Property Group (dba Corner Lot Advisors LLC), has minority management rights and will oversee day-to-day management and leasing. Please see the PPM for more details. The Joint Venture Agreement between the Midloch Co-GP and Pinacle Co-GP is available upon request from qualified investors."

Offered By

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Assets Under
Management

Currently
$661MM 30+ assets
Exited
$220MM 10+ assets
Portfolio LTV
59.9%  
Historical
Realized Returns

Total IRR
46.5%  
Equity Multiple
1.95x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
3 years  
Size
33 Staff * Dedicated investor relations
* All information is reported by Midloch Investment Partners as of 6/18/2020.
Assets Under
Management

Currently
$661MM 30+ assets
Exited
$220MM 10+ assets
Portfolio LTV
59.9%  
Historical
Returns

Total IRR
46.5%  
Equity Multiple
1.95x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
3 years  
Size
33 Staff * Dedicated investor relations
* All information is reported by Midloch Investment Partners as of 6/18/2020.

Financials

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Offering Financial

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Diligence Preview

Location Details

Laurel, MD (Howard County)

Andy Sinclair, Midloch Investment Partners: "The central location in Howard County property is located approximately 30 minutes from downtown Washington DC and 30 minutes from downtown Baltimore. This Transit-Oriented Development (“T.O.D”) is adjacent to The Marc Train station at Paddock Pointe."

Documents

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Offering Agreement Documents

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