At a glance
- The 70 in the fund's name suggests a long line of predecessor vehicles; how many there were, or how they performed, the coverage does not say.
- Built in 2007 and 93 percent occupied today, the property has held above 90 percent physical occupancy for the past decade and, per Elevest's summary, has offered no rental concessions over the last 12 months.
- Targeted terms are conventional for a syndicated equity offering: an 8 percent preferred return, an 85/15 split between limited and general partners, a 15.6 percent projected IRR and 2.01x projected equity multiple, a two-to-five-year hold, and monthly cash distributions expected to begin 60 to 90 days after closing.
Elevest Capital, a Scottsdale firm that describes itself as a private equity shop focused on passive multifamily investing, has launched Fund 70 — a $19.1 million equity raise against the $42 million purchase of a 229-unit, 35-story apartment tower in downtown Dallas — and is selling the deal on the asset's stability rather than a turnaround. The 70 in the fund's name suggests a long line of predecessor vehicles; how many there were, or how they performed, the coverage does not say.
Built in 2007 and 93 percent occupied today, the property has held above 90 percent physical occupancy for the past decade and, per Elevest's summary, has offered no rental concessions over the last 12 months. At $42 million across 229 units, the basis is roughly $183,000 a door, which raises the question of whether the return comes from rent growth or from the exit.
Targeted terms are conventional for a syndicated equity offering: an 8 percent preferred return, an 85/15 split between limited and general partners, a 15.6 percent projected IRR and 2.01x projected equity multiple, a two-to-five-year hold, and monthly cash distributions expected to begin 60 to 90 days after closing. The $200,000 minimum points to private-client capital rather than institutions, though the summary supports that inference only through the check size itself.
Two return figures without a base
The projected 5.25 percent exit cap rate arrives without a going-in cap, so a buyer cannot tell from the offering summary whether the 2.01x multiple leans on occupancy growth or on cap compression. The 4 percent targeted average cash flow has the opposite problem: the offering summary does not say whether it is measured against equity or against price, which leaves a 4 percent cash-flow target sitting under an 8 percent preferred return with no visible reconciliation.
Assuming the equity and the purchase price are the only capital sources, the raise covers about 45 percent of the price, placing the deal at the routine end of an apartment capital-formation market that, as this publication has argued, has turned toward extensions, preferred equity and rescue capital. Elevest is buying an occupied building with a decade of occupancy above 90 percent.
The summary gives no closing date, so the 60-to-90-day distribution clock is the first milestone an investor can actually time.
Reported by the Fundraising desk from Institutional Real Estate, Inc. (IREI). Published . Corrections