Overview
Jones Lang LaSalle (“JLL”) has been retained on an exclusive basis by the Seller to arrange the sale of a $121.2 million multifamily loan (the “Loan” or “Note”). The Loan is secured by the first priority mortgage in two garden-style apartment complexes located in suburban Orlando, FL (the “Property,” “Properties,” or “Collateral”). In addition, the Loan features a pledge of equity on the mortgage borrowing entity’s interest that owns the fee simple interest in the Properties. As of September 2024, the Loan is non-performing, with an unpaid principal balance of $121,244,398.
Totaling 560 units, the class A apartment complexes were constructed in 1989 and 2000 and partially renovated from 2022-2024. Benefiting from recent enhancements, the Properties feature numerous luxury-level amenities, including resort-style pool & sun deck, modern fitness center, outdoor kitchen and grill, smart thermostats, quartz countertops, and stainless-steel appliances. As of July 2024, the Properties feature a weighted average occupancy of 93.6%.
The offering presents investors the unique opportunity to acquire the Loan at an attractive cost basis, significantly below replacement cost, with a potential path to ownership through a UCC foreclosure process via a pledge of equity.
Investment Highlights
Recent Capital Improvements
Benefiting from $7 million ($12.5K per unit) of capital improvements & rent premiums since 2022, the Properties have experienced significant upgrades to the common area, unit exterior & façade, and unit interiors, where approximately 60.4% of units have been renovated, commanding a rent premium of $455.
Pledge of Equity
The Loan is structured with a pledge of equity, significantly shortening the path to ownership through the UCC foreclosure process.
Strong In-Place Cash Flow
As of July 2024, the Properties are producing strong in-place cash flows, with a combined July T-12 NOI of approximately $6.1 million, derived from a weighted stabilized tenant base occupying 93.6% of the Properties.
Attractive Basis
At $121.2 million in total unpaid principal balance, Investors have the potential to step into the ownership position on a recently renovated multifamily property at a discount to the Borrower’s acquisition basis in 2022.
Strong Demographic Fundamentals
Conveniently located within the Sun Belt in suburban Orlando, the Properties benefit from strong demographic trends, such as having the 6th highest population growth in the past three years and July year-over-year employment growth of 1.9%.