Case Study
Reed Parque Townhomes
Case Study
Reed Parque Townhomes
Asset Name
Asset Name
Reed Parque Townhomes
Location
Location
Houston, TX
Venture
Venture
RMI
Property Type
Property Type
LIHTC
Size
Size
192 units
All in Cost
All in Cost
$12M (~$63K per unit)
Strategy
Strategy
Affordable Housing / Ground-Up Development
Aquisition Date
Aquisition Date
2000
Sale Date
Sale Date
N/A (still owned by RMI)
Projected Exit Value
Projected Exit Value
$12M (~$63K per unit)
Realized Exit Value
Realized Returns
Realized Returns
30.35% IRR / 12.7 EMx
Asset Name
Reed Parque Townhomes
Location
Houston, TX
Venture
RMI
Property Type
LIHTC
Size
192 units
All in Cost
$12M (~$63K per unit)
Strategy
Affordable Housing / Ground-Up Development
Aquisition Date
2000
Sale Date
N/A (still owned by RMI)
Projected Exit Value
$12M (~$63K per unit)
Realized Exit Value
Realized Returns
30.35% IRR / 12.7 EMx
Key Investment Thesis
Ground-up Development, Site Preparation, Government Funding, 9% Tax Credits, Strong Operations/Management, Leveraged HUD Relationships
Overview
Reed Parque Townhomes (the “Property”) was a ground-up affordable housing development utilizing 9% low-income housing tax credits (“LIHTC”). The 100% townhome design with low density was made financially feasible due to a low land basis (brownfield development).
The Property was developed in an area that lacked substantial development as well as quality affordable housing and sewer infrastructure. Challenges included plugging numerous abandoned oil wells, strict low-income compliance obligations and designing a construction plan within a tight budget with minimal contingencies.
Infrastructure required a packaged water treatment plant tethered to a future obligation to connect to city sewer lines once extended. This was eventually completed.
Sourcing
The Property was sourced through local partnerships and leveraged community development incentives including partnering with a minority owned Historically Underutilized Business (“HUB”).
The initial acquisition involved identifying a suitable site with potential for affordable housing development and securing necessary financing through State of Texas Low Income Housing Tax Credits and a Community Development Block grant issued by the City of Houston.
Business Plan Execution
RMI was actively involved in the detailed planning and coordination, from architectural design to construction within a highly constrained budget from the tax credit syndicators.
RMI completed the development on time, on budget and in strict compliance. Upon, lease-up, RMI received a development fee of $1.3M (15% of eligible basis).
Post-construction, the property faced significant damage from Hurricane Ike but utilized a Community Development Block grant loan for repairs, ensuring compliance with all regulations and maintaining financial performance.
The Property has achieved impressive financial returns over the last ~24 years of a 30.35% IRR and 12.7 EMx, illustrating a successful execution of a complex affordable housing development that continues today*
Key Investment Thesis
Ground-up Development, Site Preparation, Government Funding, 9% Tax Credits, Strong Operations/Management, Leveraged HUD Relationships
Overview
Reed Parque Townhomes (the “Property”) was a ground-up affordable housing development utilizing 9% low-income housing tax credits (“LIHTC”). The 100% townhome design with low density was made financially feasible due to a low land basis (brownfield development).
The Property was developed in an area that lacked substantial development as well as quality affordable housing and sewer infrastructure. Challenges included plugging numerous abandoned oil wells, strict low-income compliance obligations and designing a construction plan within a tight budget with minimal contingencies.
Infrastructure required a packaged water treatment plant tethered to a future obligation to connect to city sewer lines once extended. This was eventually completed.
Sourcing
The Property was sourced through local partnerships and leveraged community development incentives including partnering with a minority owned Historically Underutilized Business (“HUB”).
The initial acquisition involved identifying a suitable site with potential for affordable housing development and securing necessary financing through State of Texas Low Income Housing Tax Credits and a Community Development Block grant issued by the City of Houston.
Business Plan Execution
RMI was actively involved in the detailed planning and coordination, from architectural design to construction within a highly constrained budget from the tax credit syndicators.
RMI completed the development on time, on budget and in strict compliance. Upon, lease-up, RMI received a development fee of $1.3M (15% of eligible basis).
Post-construction, the property faced significant damage from Hurricane Ike but utilized a Community Development Block grant loan for repairs, ensuring compliance with all regulations and maintaining financial performance.
The Property has achieved impressive financial returns over the last ~24 years of a 30.35% IRR and 12.7 EMx, illustrating a successful execution of a complex affordable housing development that continues today*
1) Projected exit value if sold today per recent sale comps ($60,000 per Unit).
2) Realized returns not including a sale. Total RMI investor equity check was $340K. If the Property were sold today, gross returns would be a 31.27% IRR / 44.7 EMx.
A commercial real estate investment and development platform.
2001 Kirby Dr, Suite 310,
Houston, TX 77019
Copyright © 2024 Lionsmark. All Rights Reserved
Terms & Conditions
Privacy & Policy
A commercial real estate investment and development platform.
2001 Kirby Dr, Suite 310,
Houston, TX 77019
Copyright © 2024 Lionsmark. All Rights Reserved
Terms & Conditions
Privacy & Policy
A commercial real estate investment and development platform.
2001 Kirby Dr, Suite 310,
Houston, TX 77019
Copyright © 2024 Lionsmark. All Rights Reserved
Terms & Conditions
Privacy & Policy
A commercial real estate investment and development platform.
2001 Kirby Dr, Suite 310,
Houston, TX 77019
Copyright © 2024 Lionsmark. All Rights Reserved
Terms & Conditions
Privacy & Policy