This project does not involve significant entitlement or construction risk, which creates a clearer path towards stabilized cash flows. Also, we have consistently executed very similar value-add renovation projects over the past ten years. We are buying a significant amount of infrastructure in form of a pool, gym, and other common amenities which would not typically be available to tenants at this price point. Those amenities make us a very differentiated offering within the rental market
This project will reach stabilization within 24 months. We will refinance the property at that time, allowing us to return ~37% of investor capital and return 13%+ average cash-on-cash.
Riaz Capital will invest approximately $1m, or 10% of equity. Additionally, Riaz Capital prioritizes carried interest participation within its own implementation team, ensuring that those most responsible for the success of the investment are aligned with investors.
While the pandemic has harmed collections and leasing at retail, hospitality, and office space, multi-family assets have remained strong in relative terms. Thus this investment will benefit from the purchase price discount of a struggling hospitality asset while also performing with the consistent operations and receiving the valuation and financing benefits of a stable multifamily asset.
For those investors interested in Socially Responsible Investing or Environmental, Social, and Governance (ESG) metrics, this project is consistent with Riaz Capital’s commitment to ESG principles and scores quite highly on the three most critical ESG metrics for multifamily housing: Walk Score (97), Average Qualifying Income ($65k), and Access to Jobs (~3.9m jobs within a 60 minute radius via transit)
