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

Kani Le'a Apartments

Kailua-Kona, HI

Multi-Family Property
Southwestern Property Corp. Denver, CO
Southwestern Property Corp.
  • IRR 19.6%
  • Equity Multiple 1.64x
  • Hold Period 3-5Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 7% Y3
  • First Distribution Dec 2023
  • Distribution Frequency Quarterly
  • Co-Investment 10% ($221K)
  • Preferred Return 10% IRR
  • Investor Profit Share 70%
  • Asset Profile Value Add
  • Loan-to-Value 44%
  • Current Occupancy 100%

About this Property

"Kani L’ea Apartments is a Value Add multifamily opportunity in Kona, Hawaii that has been owned by the sponsor since 2016 and has favorable 3% fixed rate debt in place along with a strong sponsor track record in the market and stable current cash flow."

- Mark Campbell, Southwestern Property Corp.

Address 75-5706 Kalawa Street
Square Footage 10,150 sq. ft.
# of Units 12
Year Built 1973
Year Renovated 2021
Current Occupancy 100%
Market Occupancy 98.9%
Current Average Rents $1,808
Average Market Rents $2,200
Purchase Price $3,295,000
Price per Square Foot $324.63
Stabilized Loan to Value 30%

 

Top Questions

All answers are provided by the sponsor, Southwestern Property Corp., or its representatives.

 

Why are you buying the Property?

Mark Campbell, Southwestern Property Corp.: "Kani Le'a Apartments is a 12 unit multifamily property in downtown Kona Hawaii just blocks from the water and the cruise ship terminal. This property is Fee Simple unlike much of the land in Hawaii. The Sponsor has owned the property since 2016 and is the largest market rate apartment owner on the Big Island of Hawaii. The property has rents that are currently $200 per month under market. Through renovation and re-tenanting the Sponsor expects to increase rents at least $250. The property has a 3% fixed 10 year loan at the low LTV of 44% making the asset extremely secure against the current interest rate market. The ownership replaced the mansard roof in 2020 and the parking lot in 2021, painting is scheduled for the exterior of the property in October 2022. This property is being purchased at a higher than market cap rate for Hawaii."

 

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

Mark Campbell, Southwestern Property Corp.:

  1. "Irreplaceable stable location"
  2. "Low 3% fixed interest rate and 44% LTV"
  3. "Value add in one of the nations most desirable markets"
  4. "Sponsor has 7 year history with the property, strong market presence and is the direct property manager"
  5. "Current property cash flow and under market rents"

 

What is your investment strategy/business plan for the Property?

Mark Campbell, Southwestern Property Corp.: "The strategy is to recapitalize the property to allow for physical improvements including: exterior paint, roofing, fencing, amenities, landscaping, and unit renovations. These physical improvements will enable the sponsor to raise unit rents over 15% within the first year of investment. The property will cash flow during the investment period then be sold. This will result in a 20%+ gross IRR over the investment period."

"Uniquely this project has a low loan to value of only 44% and a fixed interest rate loan at 3% for 10 years. This loan is a strong asset to the property and the low loan to value makes this project much lower risk than comparable projects."

 

How has COVID-19 impacted your business plan?

Mark Campbell, Southwestern Property Corp.: "COVID 19 has benefitted this asset as during the pandemic rental rates in Kona increased. During this time the Sponsor was also able to lock in fixed interest debt at 3% prior to any interest rate increases. The end of the COVID 19 pandemic has also increased tourism demand for Hawaii which is stimulating this market further. The project is also located in downtown Kona and its walkability has seen an increase in demand due to COVID 19."

 

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

Mark Campbell, Southwestern Property Corp.: "Because of the Sponsors long term history with the project there are minimal risks at this point. One risk is increased cost of construction for the value add improvements. There is no interest rate risk associated with the loan. There is always the risk of increased cap rates at sale and the Sponsor has mitigated this by modeling a cap rate significantly above comparable sales for similar properties in Hawaii. The Sponsor also intends to completely renovate the property during the value add process so there is a minimal occupancy risk during that period but given that this property has a rental waitlist currently the vacancy risk is very low."

 

NOTE: All answers provided by the sponsor, Southwestern Property Corp., or its representatives.

About this Property

"Kani L’ea Apartments is a Value Add multifamily opportunity in Kona, Hawaii that has been owned by the sponsor since 2016 and has favorable 3% fixed rate debt in place along with a strong sponsor track record in the market and stable current cash flow."

- Mark Campbell, Southwestern Property Corp.

Address 75-5706 Kalawa Street
Square Footage 10,150 sq. ft.
# of Units 12
Year Built 1973
Year Renovated 2021
Current Occupancy 100%
Market Occupancy 98.9%
Current Average Rents $1,808
Average Market Rents $2,200
Purchase Price $3,295,000
Price per Square Foot $324.63
Stabilized Loan to Value 30%

 

Top Questions

All answers are provided by the sponsor, Southwestern Property Corp., or its representatives.

 

Why are you buying the Property?

Mark Campbell, Southwestern Property Corp.: "Kani Le'a Apartments is a 12 unit multifamily property in downtown Kona Hawaii just blocks from the water and the cruise ship terminal. This property is Fee Simple unlike much of the land in Hawaii. The Sponsor has owned the property since 2016 and is the largest market rate apartment owner on the Big Island of Hawaii. The property has rents that are currently $200 per month under market. Through renovation and re-tenanting the Sponsor expects to increase rents at least $250. The property has a 3% fixed 10 year loan at the low LTV of 44% making the asset extremely secure against the current interest rate market. The ownership replaced the mansard roof in 2020 and the parking lot in 2021, painting is scheduled for the exterior of the property in October 2022. This property is being purchased at a higher than market cap rate for Hawaii."

 

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

Mark Campbell, Southwestern Property Corp.:

  1. "Irreplaceable stable location"
  2. "Low 3% fixed interest rate and 44% LTV"
  3. "Value add in one of the nations most desirable markets"
  4. "Sponsor has 7 year history with the property, strong market presence and is the direct property manager"
  5. "Current property cash flow and under market rents"

 

What is your investment strategy/business plan for the Property?

Mark Campbell, Southwestern Property Corp.: "The strategy is to recapitalize the property to allow for physical improvements including: exterior paint, roofing, fencing, amenities, landscaping, and unit renovations. These physical improvements will enable the sponsor to raise unit rents over 15% within the first year of investment. The property will cash flow during the investment period then be sold. This will result in a 20%+ gross IRR over the investment period."

"Uniquely this project has a low loan to value of only 44% and a fixed interest rate loan at 3% for 10 years. This loan is a strong asset to the property and the low loan to value makes this project much lower risk than comparable projects."

 

How has COVID-19 impacted your business plan?

Mark Campbell, Southwestern Property Corp.: "COVID 19 has benefitted this asset as during the pandemic rental rates in Kona increased. During this time the Sponsor was also able to lock in fixed interest debt at 3% prior to any interest rate increases. The end of the COVID 19 pandemic has also increased tourism demand for Hawaii which is stimulating this market further. The project is also located in downtown Kona and its walkability has seen an increase in demand due to COVID 19."

 

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

Mark Campbell, Southwestern Property Corp.: "Because of the Sponsors long term history with the project there are minimal risks at this point. One risk is increased cost of construction for the value add improvements. There is no interest rate risk associated with the loan. There is always the risk of increased cap rates at sale and the Sponsor has mitigated this by modeling a cap rate significantly above comparable sales for similar properties in Hawaii. The Sponsor also intends to completely renovate the property during the value add process so there is a minimal occupancy risk during that period but given that this property has a rental waitlist currently the vacancy risk is very low."

 

NOTE: All answers provided by the sponsor, Southwestern Property Corp., or its representatives.

Offered By

Login or Register to See More Details

Available to Registered Users

  • Get to know the sponsor behind the offering with key information
  • See an overview of their experience and success
  • Understand their investment strategies
  • Easy access to contact the sponsor directly to learn more
Assets Under
Management

Currently
$252.96MM 30+ assets
Exited
$543.08MM 50+ assets
Portfolio LTV
43%  
Historical
Realized Returns

Total IRR
42%  
Equity Multiple
2.78x  
Annual Cash
7.6%  
Years Of
Experience

As Principals
25+ years  
In Business
27 years  
Size
12 Staff  
* All information is reported by Southwestern Property Corp. as of 10/21/2020.
Assets Under
Management

Currently
$252.96MM 30+ assets
Exited
$543.08MM 50+ assets
Portfolio LTV
43%  
Historical
Returns

Total IRR
42%  
Equity Multiple
2.78x  
Annual Cash
7.6%  
Years Of
Experience

As Principals
25+ years  
In Business
27 years  
Size
12 Staff  
* All information is reported by Southwestern Property Corp. as of 10/21/2020.

Financials

Login or Register to View Financials

Available to Accredited Investors:

  • Get an overview of important financial details to make a smarter investment
  • Analyze the financial pro forma to see how projected returns are distributed over time
  • Review source and uses and other important details
Offering Financial

Sponsor Diligence Report

Login or Register to View Report

Available to Accredited Investors:

  • View principal experience
  • Review background check results
  • Track record verification
Diligence Preview

Location Details

Kailua-Kona, HI

Mark Campbell, Southwestern Property Corp.: "The property is located in the heart of downtown Kona, Hawaii just blocks from the ocean, beach, restaurants, hotels, entertainment and cruise ship port. The property sits on a small hill above the street below it so there are unobstructed views of the ocean and the town from the units. Being located at the end of a street allows for a private feeling at the property and low traffic as an amenity. The site is fee simple, which is rare for prime land in Hawaii and is a completely irreplaceable. It is unlikely that investors looking this property will ever have the opportunity to own a similar property in Hawaii. Additionally, Hawaii has extremely high barriers to entry and new projects commonly take over 10 years to permit creating a lack of supply and a major housing crisis further benefitting this property and location."

Documents

Login or Register to View Documents

Available to Accredited Investors:

  • View, download, and print the offering PPM (Private Placement Memorandum)
  • View, download, and print the detailed financial projections
  • Access all of the important documents for this offering in one place
Offering Agreement Documents

Frequently Asked Questions

Below are some of the most frequently asked questions about this offering.

RealCrowd is free for investors. RealCrowd charges a technology access fee to the operating partner for our services. We do not charge investors any upfront fees, ongoing asset management fees or promote/carried interest in the investments.

RealCrowd offerings are open to accredited investors. RealCrowd does not recommend or advise on any offering on our platform. While we have minimum history and experience threshold for sponsors who post on our platform, if you are unable to perform your own due diligence, please consult with an attorney or financial advisor prior to making an investment.

RealCrowd is a marketplace that connects investors with qualified sponsors. We strive for transparency and impartiality. For this reason, we do not participate in any offerings on our site.

Have a Question?

Send Southwestern Property Corp. and/or RealCrowd a message. If you have a question about this offering ask Southwestern Property Corp.. If you have a question about the transaction process or other general inquiry, RealCrowd will be happy to help.

Please resolve the captcha and submit.

We'll get back to you soon!

In the meantime, you can create an account to view detailed information about Kani Le'a Apartments.

In the meantime, please review the offering documents and financials.