New Offering: Madison Overland Park. Fixed 3.9% rate debt in an A+ submarket

We are thrilled to introduce Madison Overland Park, a 200 unit townhome style community in an A+ market.  The Overland Park suburb of Kansas City is one of the most affluent and desirable areas in the state of Kansas.  Its school district is ranked #1 in the state.  Within a 1 mile radius of the property, the household income is $104k.  The submarket occupancy also boasts a 95% occupancy–as does this property with 99% collections.  Panasonic is building a $4 billion Tesla battery factory about 15 minutes away from the property.

Oh, and, the best part?   We are assuming the 3.9% fixed rate loan that the seller currently holds with Fannie Mae.   In today’s higher interest rate environment, being able to secure several years of 3.9% fixed is like striking gold.  

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This is also one of the more attractive cost basis entry points we’ve encountered in a while.  Our total cost for the project is around $176 per sq ft (psf), but sales of comparable assets over the past 12 months have been around $222.   We’ve got two exit strategies for this asset.  The year 3 exit price is underwritten at $234 psf and the year 5 exit is underwritten at $249 psf—which doesn’t require much growth over that time from current comp sales.