Re: New Investment Open

We are now under contract for Oaks of Timbergrove, a 1974 Class C property located just west of the Heights and 0.5 miles north of an 80 acre mixed use development that breaks ground later this year.

Please RSVP for our upcoming webinar to learn more. What follows in a brief description of the opportunity.

• Reservation link:?Investment Webinar
• Time & Date: May 3rd at 8:00 PM Central

This investment will be a major renovation/repositioning on a 1974-built asset in a core, infill location with outstanding demographics in the surrounding area. This is more reminiscent of a value-add deal from 5-6 years ago as these opportunities have been fewer and far between as everything has traded in recent years. The seller has owned Oaks since 2014 (assumed a 10y FNMA loan maturing soon) and has spent approximately $5MM on major capital projects including a major renovation of the office/clubhouse and a light renovation on ~80% of the units (basically a modern turnover to baseline finishes). As we mentioned in previous newsletters our primary focus has been newer vintage, value-add deals, but we chased this one given the location and the untapped potential.

We are intimately familiar with the area and the renovation scope here. TriArc’s office is less than 5 minutes from the property.?Our VP of Acquisitions lives in the Heights a few minutes away and has driven by the property countless times and takes his kids to the park in the neighborhood behind the property. TriArc has partially completed a similar value-add play on Melrose Apartments (pictured above) – located in an adjacent submarket (Oak Forest) – achieving premiums of ~$400/unit. Melrose was especially challenging as the asset was acquired in September 2019, early in the pandemic. We anticipate Oaks being better due to the location and economic conditions.

Looking at the rent comps – Dominion and Montabella are similar major reno/reposition plays, but Oaks of Timbergrove is in a substantially better location. For reference – Dominion is the same area as our Melrose acquisition mentioned above. Dominion and Montabella’s areas are both in the path of growth and are capitalizing on the explosive growth of Heights/Timbergrove in recent years. Grove at White Oak is a good comp as well, but it is only partially renovated and the units are very small. Timbergrove Station is the newest property in the immediate area (just south of Oaks back in the same neighborhood) and their rents today are $400-500 more than existing rents at Oaks on like-sized units.

So long story short, Timbergrove and surrounding “inner loop” areas have seen major growth in recent years. The property has excellent access to major freeways and nearby employment hubs, and Timbergrove is immediately adjacent to the Heights, which has become borderline unaffordable and provides all the lifestyle amenities a tenant could want (including greenspace!). With affluent demographics, the area will only get better and new capital is continuing to flow into the immediate area as seen by the below outline for 3 pending developments that will make up the 80 acre mixed-us development 0.5 miles south of us.

To learn more, please RSVP for the webinar below. The Deal Room will be open after the event and everyone who registers for the webinar will be sent a link.

• Reservation link:?Investment Webinar
• Time & Date: May 3rd at 8:00 PM Central

Invest for tomorrow,

Joseph Bramante