Telos Capital Fund Goes Full Cycle; Nets Over 29% IRR to Investors

TCF 4 Stadium View Suites, a Reg D fund sponsored by Telos Capital, has gone full cycle. The fund invested in Stadium View Suites, a Class A student housing development located in Ames, Iowa.

TCF 4 Stadium View Suites, a Reg D fund sponsored by ExchangeRight-affiliate Telos Capital, has gone full cycle. The fund invested in Stadium View Suites, a Class A student housing development located in Ames, Iowa.

Stadium View Suites was developed as a luxury student housing development on the southeast side of Iowa State University, centrally located less than a 10-minute walk to Iowa State athletic facilities, retail, and restaurants.

The total development consists of 197 units and 518 beds, and the property’s 2nd phase construction was completed as of July 2017. Stadium View Suites sold in December 2017 for nearly $38.7 million.

The property was 99 percent occupied for the 2016–2017 academic year and, including Phase 2, was 99 percent pre-leased for 12 months of the 2017–2018 academic school year.

Telos’s original underwriting had three scenarios—a downside-case, base-case, and upside-case. The projected annual returns from those three scenarios were 13.7 percent, 18.7 percent, and 23.0 percent, respectively. The final sale produced net annual internal rates of return in excess of 29 percent to investors.

Telos Capital invests in discounted, value-added, and/or opportunistic real estate, and the principals have invested more than $7.5 million across 14 separate funds alongside investors.

Managing member Joshua Ungerecht said, “By frequently serving as the largest investors in each of the investments that we source, we’re able to create a significant alignment of interests. We’re extremely pleased that this fund outperformed even the higher end of our original projections.”

The principals of Telos Capital and ExchangeRight Real Estate currently steward more than $1.2 billion of real estate diversified across 400 properties, 28 states, and multiple asset classes.

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