Financial Performance:
Original Capital Investment: $560,000
IRR: 34%
Equity Multiple: 6.72X
Description:
Northeast Apartments is a government subsidized apartment community located in the historic Pendleton Heights district of Kansas City. The property is comprised of 12 two and one-half-story buildings which collectively offer an attractive unit mix of 10 one-bedroom, 76 two-bedroom, and 51 three-bedroom apartments. Community amenities include onsite laundry, off street parking, and central air conditioning.
MPC Strategy:
In 2005, McKee Private Capital expanded its footprint to include the Midwest with the acquisition of Northeast View Apartments. MPC paid less than 50% of replacement cost allowing for a debt coverage ratio in excess of 1.5 and an acquisition cap rate of nearly 11%. Property operations remained stable throughout MPC’s holding period providing investors with consistent, double-digit cash on cash returns each month. Investor demand for Project Based Section 8 assets has surged since 2005, which prompted MPC to take Northeast View to market in 2014. The property sold in the first quarter of 2015 to a non-profit group at an above market sales price securing investors tremendous appreciation on their initial equity. Northeast View exceeded MPC’s initial investment projections.
