HPI VILLAS DST
1 Lakeview Way, Jonesboro, GA 30238
Beneficial Interests: $10,000,000
Offering Price: $23,975,000
- Loan Proceeds: $13,975,000
- Current Cash Flow: 9.82%
- Loan-to-Offering Price Ratio: 58.3%
- Minimum Investment[1031]: $200,000
Hamilton Point Investments LLC (“HPI”) is a real estate investment firm founded in 2009 by Matthew A. Sharp and J. David Kelsey (“Principals”), after the two merged their former companies, which were formed in 2005 and 2007, respectively.The Company has a highly exper ienced team of seasoned professionals specialized in asset management, property management,accounting, reporting, acquisitions and financing.
256-Unit Apartment Community Property
256-unit garden-style apartment community situated on 25.0 acres.Built in 1995 to class-A construction standards with large unit sizes, averaging 1,068 square feet.Hamilton Point Investments LLC (“Sponsor” or “HPI”) is offering accredited investors Delaware Statutory Trust (“DST”) interests in Villas by the Lake (“Villas”). The 256-unit property is located in the Atlanta suburb of Jonesboro, Georgia
INVESTMENT HIGHLIGHTS
Business Strategy
Hamilton Point Property Management LLC will continue to manage the property, as it has since May 2013. Self-management is a key tenet of HPI’s investment strategy and is a crucial element to maintaining institutional quality property oversight that includes revenue enhancement, cost control and tenant credit quality.
Net Income Enhancement
• Maintain strong occupancies above 94%. Vacancy rate was 2.7% at Villas and 3.5% at the competitive set of eight properties as of February 22, 2016. Despite these consistently low vacancy rates, a 6% constant vacancy rate was included in the cash flow projections.
• Increase rental rates. Although we feel we may be able to achieve significant rental rate increases in response to the low vacancy rate, we have assumed a 3% annual growth rate for both revenues and expenses. It is our belief we may be able to increase rates by more than 3%.
• Continue unit interior upgrade program to include hardwood flooring on ground floor units, refinished kitchen and bathroom counters and cabinets, and replacement of brass colored fixtures with brushed nickel to allow for rental rate premiums on those units.
• Continue with strict expense controls made possible by Sponsor’s self-management of the property. While third party property managers may significantly upcharge the property for property level employees, operating and capital expenses, Hamilton Point Property Management does not upcharge any items, leading to significant expense savings
Investment Summary
• Class A apartment community built in 2003 to high-quality construction standards
• Total capitalization of $93,652 per unit ($82.83 per square foot),which is below replacement cost
• Occupancy rate of 97.3% (2/22/16) and average occupancy rate of 95.4% for 12 months ending 2/22/16.
• Sponsor has managed Villas for three years and owns five other apartment properties in Georgia
• Sponsor’s asset management office is located in Atlanta, 20 minutes from Villas
• 10-year hold period offering projected 6.0% initial yield and 6.6% projected average yield over ten year hold period
• 30-year amortization with 3-year interest only period reduces debt by $1,811,556 during hold period
• $600,000 upfront escrow plus $76,800 per year ongoing capital reserve escrow
PROPERTY OVERVIEW
256-Unit Apartment Community Property
• 256 unit garden-style apartment community situated on 25.0 acres
• Built in 2003 to high quality construction standards
• Large unit sizes, averaging 1,106 square feet
• 49 detached garage units
• Interiors with fully-equipped kitchens, nine-foot ceilings, washerdryerconnections, wood flooring in select units, hard-wired alarms, walk-in closets, six-panels doors and private patios or porches
• Amenities include a swimming pool, clubhouse, fitness center,business center, tennis court, gated entry, volleyball court, dog park and grilling area
ABOUT Inland Real Estate Group of Companies, Inc.
The Inland Real Estate Group of Companies, Inc. (Inland) is one of the nation’s largest commercial real estate and finance groups, representing nearly 50 years of expertise and integrity in the industry. As a business incubator, Inland specializes in creating, developing and supporting member companies that provide real estaterelated investment funds – including limited partnerships, institutional funds and nonlisted real estate investment trusts (REITs) – and real estate services for both third parties and Inland-member companies.
In March 2001, Inland Private Capital Corporation was formed to provide replacement properties for investors wishing to complete a tax-deferred exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, as well as investors seeking a quality, multiple-owner real estate investment. The programs sponsored by IPC offer securities to accredited investors on a private placement basis.