The JKAM team is excited to share our newest investment opportunity Verdir at Hermann Park, a 224-unit Multi-family Value Add opportunity located in the heart of Houston. 

Key Investment Details

IRR: 15%+ | Profit Multiple: 1.7x | Avg Cash-on-Cash Return: 6.2% 

Hold Term: 4 years | Pref Returns: 7% | Year Built: 2004 | Unit Count: 224 units

Why We Like The Deal:

2.5% Fixed Rate Debt –  GREEN Certified, HUD Certified 2.5% interest rate. More than 20% of the property was enhanced to be GREEN Certified, then it was refinanced on a bridge loan into a HUD loan at an incredible 2.5% interest rate. A 5% prepayment penalty is already assumed in the model. That said, it’s likely the next buyer is going to assume the loan. 

Light Value Add Renovations  – 99 of 224 units will be renovated. With those 99 units, they’re purposely spreading it across 3 years so it’s only 3 units renovated per month. Renovations are underwritten at  $6K/unit for most units, with a few upwards of $7K for the full renovations. These are projected to yield $180/month rent bumps, on top of bringing the units up-to-market rent.

Class A/A- and Proximity to Houston Medical Center – While JKAM typically focuses on Class B Multifamily, the Verdir at Hermann Park’s location is compelling as the tenants are primarily employed by Texas Medical Center down the street. The property is 93% occupied, and rents are 100% collected by the 5th of every month. Co-sponsor is a doctor who lives in that area. The property is also in close proximity to Rice University, The Houston Astrodome, the museum, district, and the Houston Zoo.  

Off-Market Sale: This property was wrapped up in a portfolio last year – but the buyer couldn’t buy it due to bridge loan terms. The seller said they weren’t going to sell, but our operating partner remained in touch, and 1-year later the seller is proceeding with selling to our Operating Partner.

Proven Operating Partner – JKAM had a successful exit on Lion’s Gate Apartments, in which we invested with this same operating partner. They are not only proven but delivered a 36% IRR on that deal. 

Distributions – Cash Flow Positive Day 1 on current, in-place rents and current occupancy, distributions to begin within 90 days.

Better Terms: Due to JKAM’s pre-existing relationship with the Operating Partner in this deal, our investors can receive the Class C terms that are typically reserved for investments of $250,000+ for JKAM’s minimum of $50,000.

Investor Timeline:

1. This offering has limited space and will be on a first come first serve basis. 

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