The Reserve at 5th
Description:
The Reserve at 5th consists of 5 two-story townhouse apartment buildings which are situated on a 1.59 acre site. The garden style community features a desirable unit mix of two-bedroom/1.5-bathroom townhouses which are appointed with high end finishes including granite countertops and in suite laundry appliances.
MPC Strategy:
Located four miles east of Eugene, the city of Springfield has experienced a housing shortage in recent years and has an average vacancy rate of just 2% as a result. McKee Private Capital identified this asset as a replacement property for a 1031 exchange and successfully closed the transaction in December, 2017, marking its first acquisition in the state of Oregon. We obtained financing through Freddie Mac’s small balance loan program. In addition to monthly cash distributions, investors can expect steady appreciation in asset value given the underlying fundamentals in this growing market.
New Yorker Apartments
Description:
The New Yorker Apartments is comprised of one three-story building located in the historic district of Downtown Bakersfield. This midrise community features a unique unit mix of studio, one, and two bedroom apartments all of which have been thoughtfully restored to maintain their authentic vintage ambiance. Common area amenities include on site laundry facility, off street parking, and a beautifully landscaped courtyard appointed with a koi pond.
The Opportunity:
McKee Private Capital purchased the New Yorker Apartments in September, 2017, marking our first expansion into the Bakersfield market. MPC raised equity from two private investors and utilized Freddie Mac’s small balance loan program, which features a 36 month interest only period. MPC investment projections indicate that this investment will generate a cash on cash yield in excess of 9% per annum. With limited supply in the pipeline and Bakersfield citywide vacancy rates averaging just 2.3%, investors can expect outsized cash on cash returns with their participation in this investment.
Charles Schwab Investment Center
Description:
Constructed in 2014 as a build-to-suit for Charles Schwab & Company, this property is located in Overland Park, one of the highest income, high growth corridors of Johnson County, Kansas. Charles Schwab (NASDAQ: SCHW) is a publicly traded company with a Standard & Poor’s A+ credit rating.
Purchased subject to a 10 year triple net, fully guaranteed corporate lease, plus three 5 year options, each with 10% rent increases, this investment will generate solid, growing returns over the next 20+ years, with virtually no landlord responsibilities.
The hard corner signalized intersection where the property is located boasts daily traffic counts of over 50,000 cars per day, and the average household incomes within a 1 mile radius of the property exceed $145,000 annually. We are confident that this investment will produce good long term income, as well as value appreciation due to its outstanding location.
MPC Strategy:
This investment will provide MPC investors with a truly passive income by producing immediate cash flow in excess of 6%, with steady increases over the life of the tenancy.
Sierra Vista
Financial Performance:
Projected Investor Dividends (Year 1): 7.25%
Description:
Sierra Vista consists of 6 two-story multifamily apartment buildings located in Seeley, CA, just 10 miles west of El Centro. The community contains 24 two-bedroom, two bath apartments and 24 three-bedroom, two bath apartments. Sierra Vista provides affordable housing to families earning no more than 30%, 40%, 50%, and 60% of Imperial County AMI (area median income). Each set aside has a dedicated number of units ownership must lease to renters within the prescribed income caps. Community amenities include washer/dryer connections, playground, clubhouse, and covered parking.
The Opportunity:
Acquired in December of 2016, Sierra Vista has provided investors with the opportunity to acquire Southern California real estate at a significant discount to replacement cost. The affordability designation is advantageous in this lower income MSA, which caters to workforce families primarily in the agriculture and services sectors. Modest rent increases coupled with more efficient management practices will bolster investor returns going forward.
Casa Del Sol
Financial Performance:
Projected Investor Dividends (Year 1): 7.25%
Description:
Casa Del Sol consists of 10 two-story multifamily apartment buildings located in Calipatria, CA, just 25 miles north of El Centro. The community contains 41 two-bedroom, two bath apartments and 40 three-bedroom, two bath apartments. Casa Del Sol provides affordable housing to families earning no more than 30%, 40%, 50%, and 60% of Imperial County AMI (area median income). Each set aside has a dedicated number of units ownership must lease to renters within the prescribed income caps. Community amenities include covered parking, washer/dryer connections, playground, clubhouse, and barbecue area.
The Opportunity:
Acquired in December 2016, Casa Del Sol provides investors with the unique opportunity to acquire Southern California real estate at below replacement cost. The affordability designation is advantageous in this lower income MSA, which caters to workforce families primarily in the agriculture and services sectors. Modest rent increases coupled with more efficient management practices will bolster investor returns going forward.
Sierra Pointe
Financial Performance:
Projected Investor Dividends (Year 1): 7.0%
Description:
Sierra Pointe consists of 15 two-story apartment buildings situated on two parcels totaling approximately 11 acres in St. George, UT. Just 40 miles west of Zion National Park, this garden style community features an attractive unit mix of studio, one, two, and three bedroom apartments. Common area amenities include on site laundry facilities, community fitness center, playground, sauna, and garage parking.
MPC Strategy:
McKee Private Capital purchased Sierra Pointe in January 2016, marking our first expansion into the Utah market. MPC raised equity from seven private investors and assumed the Seller’s existing debt, which will mature in 2023. MPC investment projections indicate that Sierra Pointe will generate a cash on cash in excess of 9% per annum. While operations were stable under previous ownership, MPC is confident that meaningful rent growth is achievable with moderate unit upgrades and a more aggressive lease renewal campaign. Median physical occupancy rates among similar type properties in St. George have been 99% for the past three years. Additionally, the local population has increased by approximately 30% over the last ten years and is poised for further growth.
Woodwinds
Financial Performance:
Original Capital Investment: $580,000
Projected Investor Dividends (Year 1): 8.75%
Description:
Woodwinds Apartments consist of 6 two-story multifamily apartment buildings located in
Norfolk, Nebraska. The buildings contain a total of 44 two-bedroom and 6 three-bedroom apartment townhomes all of which are made affordable to our residents with rental assistance provided under a HAP Contract (Housing Assistance Payments), administered by the U.S. Department of Housing and Urban Development. Amenities include an onsite laundry facility, playground, and central air conditioning.
MPC Strategy:
McKee Private Capital had the opportunity to acquire Woodwinds Apartments on an off-market basis in January of 2013. Upon takeover, MPC terminated the existing HAP Contract and negotiated a new, budget based Contract with HUD. As a result, Woodwinds is no longer subject to periodic RCS (rent comp surveys) and therefore has zero exposure to market rent reductions. This investment continues to generate solid, double-digit returns to investors each month.
Park Madison Apartments
Description:
Situated just 15 minutes south of Indianapolis, Park Madison Apartments is comprised of 7 two-story multifamily apartment buildings located on approximately three acres of land. The community consists of 56 two-bedroom floor plans totaling 64,400 rentable square feet for a generous 1,150 square feet of living space per apartment. Property amenities include built-in microwaves, washers/dryer connections, private patios and balconies, walk-in closets, and ample off street parking.
The Opportunity:
Park Madison provides investors with the unique opportunity to acquire real estate below replacement cost in a growing secondary market. With rents in the Indianapolis market expected to expand by 3.5% in 2017, Park Madison will continue to provide our investors with solid, conservative revenue growth. This investment is currently generating annualized cash flow in excess of 10%.
The Oaks Apartments
Financial Performance:
Original Capital Investment: $2,895,000
IRR: 32%
Equity Multiple: 3.77X
Market Overview:
Lincolnton, NC is a bedroom community located 37 miles northeast of Charlotte, and part of the Charlotte MSA.
Located between the Blue Ridge Mountains and coastal plains, the Charlotte metro stretches 3,198 square miles across the Piedmont region of the Southeastern United States. It contains seven counties in North Carolina: Mecklenburg, Gaston, Union, Cabarrus, Iredell, Rowan and Lincoln. South Carolina counties include York, Lancaster and Chester. A strong financial presence has contributed to the local population growing to more than 2.4 million citizens, becoming one of the nation’s fastest growing metros over the past 15 years.
Charlotte currently boasts a population of over 800,000 people. The Charlotte metro is expected to gain 18% population growth over the next 7 years. The largest portion of this gain will be due to in-migration.
Charlotte has a well-educated and highly trained labor pool that is attracted by a variety of industries and employers located in the metro. The metro’s employment base is growing and diversifying, drawing Fortune 500 companies. Though the finance sector is a large driver of the economy, manufacturing, healthcare and energy industries also play a vital role. The low cost of doing business attracts companies. Eight Fortune 500 companies have headquarters in the region: Bank of America, Lowe’s, Quintiles Transnational Holdings, Duke Energy, Family Dollar, Nucor, Sonic Automotive and Domtar. Highly ranked universities provide employment and produce a highly educated workforce, drawing top companies to the area.
Property Description:
The Oaks is comprised of 8 two story garden style buildings spread over 10 beautifully landscaped, wooded acres. Built in 2002, the Oaks stands as Lincolnton’s premier apartment community. Unit mix is comprised of 20-1BR/1BA, 79-2BR/2BA, and 12-3BR/2BA Units. Property has covered balconies and breezeways, and 230 parking spaces, including fully enclosed garages. Amenities include Clubhouse, Fitness Center, Onsite Laundry as well as en-suite laundry hookups, Basketball Court and Dog Park.
MPC Strategy:
McKee Private Capital acquired the Oaks from its original developer in July of 2018. While the property had been well maintained physically, it had been undermanaged as demonstrated by high vacancy. A more aggressive leasing campaign was implemented resulting in NOI growth in excess of twenty percent within the first year of ownership. In Spring of 2022, ownership made the decision to divest the asset resulting in a return of equity four times over.
Riverfront
Financial Performance:
Original Capital Investment: $740,000
IRR: 37%
Equity Multiple: 7.34X
Description:
Riverfront consists of 3 three-story multifamily apartment buildings located in
South Sioux City, Nebraska, just across the Missouri River from Iowa. The community contains one, two, and three-bedroom apartments and caters to low income households earning no more than 60% of Dakota County’s AMI (area median income). Community amenities include onsite laundry facilities in each building, laundry hook-ups, garages for rent, and a playground.
MPC Strategy:
McKee Private Capital acquired Riverfront in December of 2013 as part of a 1031 tax deferred exchange. After increasing NOI by more than 30%, MPC refinanced the existing debt allowing investors a 100% return of capital. Recognizing the volatility in capital markets, MPC made the decision to divest Riverfront in the Spring of 2022 realizing a significant gain on sale.
