Somerset and Stratton Park Apartments Dallas/Fort Worth, Texas

Investment Type
Asset Profile
Value Add
Min. Investment
Estimated Hold
Target Return (IRR)
Target Annual Cash
This deal is oversubscribed

Offered By

Nicholas Residential is a fully integrated Multifamily Investment Firm executing on opportunities in Dallas, Houston, and San Antonio, Texas. While only seeking out properties with management enhancement opportunities, Nicholas Residential focuses on the following: <...


About this Property

Nicholas Residential LLC is pleased to present the opportunity to invest in our upcoming multifamily acquisition, Somerset and Stratton Park Apartments. The two Class ‘B’ properties, well located in Fort Worth, Texas, are being purchased for $33m with a total capitalization of $36.2m. The properties were built in 1986 and consist of 528 individually metered units.

Residents enjoy first class amenities including a resident clubhouse, large swimming pool, walk‑in closets, private patios and balconies, fireplaces, washer/dryer connections, onsite laundry facilities, controlled access gates and a courtyard area with gazebo and an outdoor kitchen.

The average household income within three miles of the property is $62,430. With ample parking and an attractive mix of 1 bedroom and 2 bedroom units, the property is well situated to fit the needs of established adults as well as families with children in the surrounding area.

Nicholas Residential will secure a Freddie Mac loan at 79% LTV, 3.85% interest, 5 years interest only, 30‑year amortization, and a maturity date of 2026. The debt is fully assumable upon sale and eligible to be resized back to 75% LTV.

Although investment underwriting assumes a 5-year hold period, deals are overcapitalized at closing to avoid capital calls and sustain the projects cash-flow through a potential downturn in the market. The project is expected to close on October 25th, 2016.

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Key Points

  • Sponsor providing favorable structure with a 10% preferred return and monthly distributions.
  • Year-one cap rate of 7.15%.
  • Targeted Cash on Cash returns average of 15.8% over the hold period.
  • The investment targets a 20.85% IRR and 2.24x multiple on a 3 to 5 year hold.
  • 10 year Freddie Mac loan with 5 years interest only at 3.85%.
  • Existing rents are currently $180 below other fully improved units at the properties.

About this Sponsor

Nicholas Residential LLC

Dallas, Texas

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Location Details

Dallas/Fort Worth, Texas

The properties are located at the intersection of the heavily traveled Interstate 30 and Interstate 820 in the southeast quadrant, providing direct access to downtown Fort Worth and nearby major employers.

Stratton Park and Somerset have immediate access to nearby shopping centers including Ridgmar Mall, Target, Sam’s Club, and Big Lots. Ridgmar Mall is home to 100 name-brand stores and is anchored by Dillard’s, Macy’s, Neiman Marcus, and JCPenney.

Residents are 10 minutes from all Fort Worth has to offer in the Fort Worth Cultural District, Downtown Fort Worth, Sundance Square and the Near Southside Medical District, home to more than 121,000 high-income jobs.

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