RealCrowd Launches New Real Estate Investment Offering For A Historic Property With Value-Add Opportunity

The real estate investment platform RealCrowd has announced a new offering for a value-add opportunity with a multifamily property in Philadelphia, Pennsylvania, with a target internal rate of return (IRR) of 17%.

The asset is significantly undervalued considering it currently has a 40% vacancy rate and is operating at only $1.13 per square foot, compared to the market average of $1.51 per square foot. This underperformance is allowing the sponsor to acquire the property at a significant discount, creating an impressive value-add opportunity for investors.

The sponsor has budgeted for approximately $4 million in capital improvements, which works out to about $50,000 per door, and is planning on taking a holistic approach to the improvements. Everything from interior unit renovations to common areas and exteriors is on the docket and several improvements to the infrastructure and core system. The sponsor is looking to deliver a premium living experience commensurate with modern high-end apartments.

Investment Highlights

The Germantown area is a large 3,500 square mile radius that encompasses parts of both Philadelphia and New Jersey, with a historic district that dates back to 1683.

Along with the capital improvements, the sponsor will also look to immediately raise Marchwood Apartments' historically low rental rates by 5% bringing it more inline with the current Germantown market.

• Minimum investment: $25,000
• Target IRR: 17%
• Target equity multiple: 1.9x
• Target cash-on-cash return: 4%
• Target investment term: 5 years

View RealCrowd offerings on Benzinga’s Alternative Investment Screener

Deal Sponsor

Strategic Realty Holdings is the sponsor for this offering and the company has been making quite a name for itself on RealCrowd. Having completed two full-cycle deals, both with solid returns speak volumes about the management’s ability to deliver. Since 2008, Strategic Realty Holdings have exited over 40 assets totaling $742 million.

Photo: Courtesy of RealCrowd