Private Market Real Estate: Student Housing Equity Investment Offering For 170 Units In East Lansing, MI - 16.8% Target IRR

For investors looking to add multifamily real estate to their portfolio comes a student-housing opportunity out of East Lansing, Michigan. 

Hunters Ridge Apartments & Townhomes is an equity investment in a 170-unit student housing facility at Michigan State University. The units consist of a mix of one- to three-bedroom apartments and townhomes with the deal sponsor, RM Communities, planning to implement a value-adding program to increase cash flows and overall appreciation potentials.

Having been acquired as part of an off-market transaction at a favorable acquisition cost, the sponsors will be assuming the in-place debt at an advantageous and below-market fixed rate of 3.33%. 

The sellers of the Class-B facility previously renovated 38 of the units, which are already achieving average rent premiums of $280 a month and increasing. RM Communities has invested capital into building exteriors and amenity upgrades including the clubhouse and fitness center and the installation of a dog park and lounge area. Through these renovations, including to the interiors of the remaining 132 units, RM Communities believes it will be able to increase lease rates while maintaining the current 98% occupancy rate. 

Michigan State University has an enrollment of roughly 50,000 students while the broader Lansing economy benefits from a diverse and inflation-resistant economy. Added downside protection comes from the above-average median income as well as the local economy being home to a mix of industries including education, healthcare and government as Lansing serves as the state's capital city. While multifamily real estate is considered more stable than traditional asset classes such as stocks and bonds, student housing tends to be even more stable than traditional multifamily real estate assets. 

• Minimum investment: $35,000
• Target internal rate of return (IRR): 16.8%
• Target equity multiple: 1.8x
• Target cash yield: 8.6%
• Target investment term: 4.75 year

Deal sponsor RM Communities is a sister company to RealtyMogul, one of the leading real estate technology and funding platforms. Since the group's inception, it's amassed a multifamily real estate portfolio of nearly 2,200 units valued at more than $350 million. The Hunters Ridge Apartments & Townhomes investment offering is being funded through the RealtyMogul platform and is currently available to prospective investors. 

Image: Courtesy of RealtyMogul