MLG Capital is excited to pursue the acquisition of a true off-market class A+ apartment acquisition that has a rare co-investment opportunity associated. Mercer Crossing is a 509-unit apartment community with a spectacular location within Farmers Branch, TX (Dallas, TX MSA). MLG Capital is seeking an estimated $31,200,000 of equity for this transaction. Our series of funds will be providing investment into this deal and co-investment availability will be limited to approximately $10MM. The transaction is anticipated to close May 2017.
This institutional quality deal provides an opportunity for high net worth, family office and RIA investors to participate in a truly rare off-market deal in a highly desired sub-market of Dallas, TX.
Please find more information about this very unique opportunity in the below Deal Overview section. We are more than happy to provide additional information upon request by reaching out to a team member below or completing the form on the bottom of this webpage.
Paperwork completion and investment dollars will likely be called upon mid-April.
- Acquiring the Asset at a Discount
- MLG Capital is acquiring the property at a discount to comparable transactions. This is a Class A asset of the type that typically warrants a Class A low cap rate (5-5.25% for example), however, MLG Capital is acquiring the asset at a ±6.03% cap rate on year 1 stabilized NOI.
- Off-market Acquisition due to Relationship
- MLG Capital sourced this local acquisition through an established relationship.
- Near Los Colinas in Farmer’s Branch. It’s located in one of the strongest school districts in Dallas. Additionally this property is keenly located near employment centers with ±35 Million square feet of Office and approximately six Fortune 500 companies are located within a 10-15 minute drive of this property. In this pocket there is limited competitive land available for new construction.
- Truly Rare Opportunity
- Asset such as this is not typically available outside of institutional investors.
- Strong Financial Returns with Moderate Leverage and Believable Assumptions
- Projected cash on cash distributions – ±8.3% (5 year avg), year 1 targeted ±7.4%
- Targeted LTC ±64%
- The blended property occupancy is below market occupancies largely due to the newly built Phase II (2016 delivery). MLG Capital has ability to finish the lease up of the property – without taking construction risk. The overall market is 95% occupied.
- The DFW region is expected to grow to a population of 10.5 million people and employ more than 6.6 million by the year 2040
- As of Q2 2016, the population increased 2.0 percent during the last four quarters accounting for an increase of 144,600 people. During this same time, the number of households increased by 61,000, a 2.4 percent increase (Marcus & Millichap)
- Roughly 396 people are moving to DFW every day
- DFW’s residential population is expected to increase 9.0% by 2021, equating to one new person in DFW every 4.3 minutes (CBRE)
- Dallas-Plano-Irving MSA ranked #2 in job growth in the entire United States in 2016, second only to NYC
- Since 2014 the Dallas-Plano-Irving MSA has been in the top 3 in terms of job growth nationally and in the top 10 since 2013
- According to Marcus & Millichap, 130,500 jobs were created in 2016.
- For 2017, the metroplex is forecast to increase 2.9%, creating 105,000 jobs.
- According to the Bureau of Labor Statistics, job growth in Dallas-Plano-Irving, TX Metro Division was 3.9% in December 2016, reflecting 95,300 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.4%.
- Sub market
- Far Northwest/Framers Branch as a sub market experienced 4.3% rent growth in 2016 which was above the market average of 4%
- North Irving as a sub market experienced 3.5% rent growth in 2016 which was slightly below the market average of 4%
- As of 4Q16 the Far Northwest/Framers Branch submarket was 95.2% occupied. The submarket’s occupancy is expected to increase to 95.8% in 2016 and average 95.6% from 2016 to 2018.
- As of 4Q16 the North Irving submarket was 95.3% occupied. The submarket’s occupancy is expected to increase to 95.8% in 2016 and average 95.5% from 2016 to 2018.
Deal Document Center:
A high level of the Mercer Crossing opportunity is available via PDF.
More information, investment summary package and proforma, may be received by reaching out to a team member below or completing below form.
** Information contained on this webpage is presented for informational purposes only and is not an offer to sell interests in a security. Offers to sell an investment in MLG/PF Mercer Co-Investor LLC will only be made to a qualified purchaser by the delivery of the MLG/PF Mercer Co-Investor LLC Investment Summary Book (V1.0), relevant supplements, and accompanied by a subscription document booklet. Please reference these items for complete details**
Need more information? Reach out today to our team!
|David Binder, Jr.
VP – Private Equity
VP- Private Equity
VP- Capital Markets
AVP -Private Equity