RK Properties, a sponsor of private placements and 1031 exchange offerings, has sold Lunaire Apartments located in Good Year, Arizona for $59.7 million. The sale was facilitated on behalf of one of the company’s tenant–in-common 1031 exchange programs and the RK Opportunity Fund IV.
Lunaire, a 240-unit Class A property built in 2008, was purchased in May 2016 for approximately $29 million. The company said that, coupled with cash flow generated during the hold period, the sale resulted in a total return on investment of 135.5 percent to the TIC investors and 108.4 percent to the shareholders in RKOF IV (calculated based on gain from sale and monthly cash flow totals on invested capital). The hold period was 4.87 years, resulting in annualized IRRs of 27.85 percent and 22.27 percent, respectively.
The company added that roughly 90 percent of the 1031 exchange investors are in the process of participating in another tax-deferred exchange into a new RK Properties acquisition.
“Lunaire was a successful valued-add opportunity where on turns we upgraded cabinets in kitchen and baths, added granite counter tops and high-end finishes,” said Steve King, chief operating officer of RK Properties. “Additionally, we did exterior upgrades and improvements to the amenities at the property. Because the location and quality of the asset the upgrades were well accepted, and we were able to push the rents to increase the value of the property on behalf of our investor/owners,” said Steve King, chief operating officer of RK Properties.
RK Properties offers multifamily replacement properties for 1031 tax deferred exchanges, as well as straight capital investment opportunities for accredited investors who are seeking a real estate investment. The firm has a 45-year track record in the multifamily market, and as of March 2021, has sponsored 157 private placement programs, of which 143 have gone full cycle.