Telos Capital Fund Goes Full Cycle, Nets 13% Return to Investors
TCF 3 Apartments at the Venue, a Reg D fund sponsored by ExchangeRight-affiliate Telos Capital, has gone full cycle.
TCF 3 Apartments at the Venue, a Reg D fund sponsored by ExchangeRight-affiliate Telos Capital, has gone full cycle.
Apartments at the Venue is a 618-unit, Class A multifamily property located in Valley, Alabama that was purchased by the fund in the fourth quarter of 2015 for an undisclosed amount.
The property sold in February 2018 for $51 million, or approximately $82,500 per unit, and provided Telos Capital investors with a net annual internal rate of return of 13.3 percent. The DI Wire reported earlier this month that a Reg D fund sponsored by Hamilton Point Investments purchased the property.
Telos Capital noted that its investment was approximately 45 percent lower than the developer’s original cost to build (not adjusted for inflation). The company also partnered with operators to unlock revenue that was not being captured by the previous management, it said.
During ownership, Telos and its partners increased total revenue by more than 12 percent (4Q17 compared to 4Q15) by growing occupancy and rental rates as a result of select unit upgrades and focused marketing.
The property is located in Alabama’s primary auto logistics corridor, less than 20 minutes from Kia’s manufacturing plant and the coming Sentury Tire plant. The property is adjacent to a new 410-acre Valley Industrial Park and less than an hour and a half from Atlanta, Georgia.
Built in 2008, the gated community is comprised of one-, two-, and three-bedroom units that average 1,068 square feet. Amenities include three swimming pools, a fitness center, two clubhouses with business centers, detached parking garages, and two car wash centers.
“We are pleased with the value that we created for our investors over a relatively short time period,” says Joshua Ungerecht, a Telos Capital managing member. “We felt now was the time to lock in that value by selling at what seems to be a high point in Class A multifamily demand and valuations.”
In other Telos Capital fund news, the company’s TCF 4 Stadium View Suites recently went full cycle and produced a net annual internal rate of return in excess of 29 percent to investors.
Telos Capital invests in discounted, value-added, and/or opportunistic real estate. The principals of Telos Capital and ExchangeRight Real Estate currently steward more than $1.2 billion in real estate diversified across 425 properties, 28 states, and multiple asset classes.
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