NAS successfully delivered a buyer for Alexis at Town East, a 224-unit, multifamily community located approximately 13 miles northeast of downtown Dallas. The sale of the property resulted in a cumulative return of 270% for investors who originally purchased the property as a group of tenants-in-common (TIC) owners in January 2006.
The tremendous return on the co-owners’ investment can be attributed, in large part, to a decision made by the group in 2016 to refinance rather than sell the property at time when market conditions were not favorable.
As the maturity date of the original loan approached in January 2016, NAS executives presented options that included refinancing the property and extending the hold period until market conditions improved. The NAS team then worked with co-owners to refinance the property while securing a capital resource to finance the TIC-structured property, with favorable terms, at a time when capital markets were resistant to financing properties that consisted of multiple co-owners.
Refinancing the asset also presented a major challenge as some co-owners preferred to sell rather than extend the investment holding period. Capital sources required a guarantor for each property ownership position. With procedural guidance from the NAS team, three Town East investors stepped forward as guarantors, satisfying these lending requirements.
The refinancing strategy proved to be extremely successful as the property value increased substantially, due in part, to aggressive marketing efforts spearheaded by NAS that maintained an occupancy level of over 95%, despite the tragic impact of COVID-19 on the marketplace.
Refinancing as a TIC property added an additional benefit to the property investors as each co-owner now has the option of deferring the capital gains tax on the sale of the asset by following the IRS rules governing 1031 Exchange properties. For more information about the 1031 Exchange process and to download a free guide visit our 1031 Information section.
“Prior to the original loan’s maturity date in 2016, we presented options to the TIC owners that we believed would enhance the property’s market position,” commented Karen E. Kennedy, President and Founder of National Asset Services and NAS Investment Solutions. “The result was a tremendous outcome for our investment clients and is a good example of our ability to help a determined group of investors turn a possible negative investment outcome into an incredible success story.”
Ryan Epstein, Managing Director, Investment Sales with Houston-based Walker & Dunlop, served as disposition broker representing the Town East TIC investors.
“I have worked with NAS on several transactions over the last few years and one thing is always consistent; they are true advocates for their investors,” commented Mr. Epstein. “They do a tremendous job preserving the asset to ensure the greatest residual value and cash flow for their clients. It’s always a pleasure to work with the NAS team as they are organized, thorough and just great people to do business with.”
Atlanta-based JMG Realty provided onsite property management and leasing for Town East, a 222,916 square foot suburban multifamily community situated on 15 acres, consisting of eleven buildings with an average unit size of 995 square feet. The property offers spacious one, two, and three-bedroom garden-style apartment homes and is located within easy access to major employers, dining, retail, and a variety of entertainment venues.
“This is one of the best success stories of my career,” commented Adi Peery, NAS’ Vice President of Portfolio Management, responsible for asset management of the property. “The incredible results were achieved as a direct result of a total team effort with open communication between NAS, property management and the property co-owners.”
“My first experience with Karen Kennedy and her team at NAS happened about 10 years ago when she took over management of the first property, I was invested in as a TIC co-owner,” commented Holly Krupnick, a TIC co-owner in the Town East multifamily property. “Town East sold at an extremely favorable price, and I couldn’t be happier with the results. I’m enthusiastically invested in 3 DST properties sponsored by NAS Investment Solutions and managed by NAS. All are doing well.”