Property Details
Below Market Rents  Repositioning Opportunity  NOI Growth 
Asset Profile
Value Add

LURIN: Meadowrun Apartments

Pensacola, FL

Multi-Family Property
Lurin Dallas, TX
Lurin
  • IRR 20.1%
  • Equity Multiple 1.6x
  • Hold Period 3Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 8.2% in Y3
  • First Distribution Jul 2022
  • Distribution Frequency Quarterly
  • Co-Investment 10% ($943K)
  • Preferred Return 9%
  • Investor Profit Share See Financials
  • Asset Profile Value Add
  • Loan-to-Value 73%
  • Current Occupancy 97%

About this Property

"Meadowrun Apartments, a Class-C+ property located in Pensacola, Florida, is a 200-unit property that was built in 1983. LURIN is well positioned to turn the asset into a solid class-B+ property through an extensive value-add strategy."

-Jon Venetos, LURIN

 

Address 3205 E Olive Rd
Square Footage 179,360 sq. ft.
# of Units 200
Year Built 1983
Year Renovated N/A
Current Occupancy 97%
Market Occupancy 95.2%
Current Average Rents $928/unit
Average Market Rents $1,337.65/unit
Purchase Price $28,500,000
Price/Sq. Ft. $158.90
Stabilized Loan to Value 64.94%

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos, LURIN: "LURIN is under contract to acquire a class-C+ property located in Pensacola, Florida. Meadowrun is a 200-unit property built in 1983. LURIN’s business plan will be to transform the asset into a solid class-B+ property through an extensive value-add strategy. The property will represent LURIN’s sixth acquisition in the Pensacola area in the past year. Meadowrun is being purchased for $28,500,000 or $142,500/unit. The equity request from Partners to facilitate the transaction is approximately $9.44M due on or before May 3rd, 2021."

"History: Meadowrun will represent LURIN’s sixth acquisition in the Pensacola area in the past year. Meadowrun is being purchased for $28,500,000 or $142,500/unit. The equity request from Partners to facilitate the transaction is approximately $9.44M due on or before May 3rd, 2021."

"LURIN was notified of the deal via its extensive network of brokers, which allowed it to engage the seller prior to their decision to initiate a formal marketing process for the asset. LURIN’s bid for the property was below another group in price, but due to more favorable terms and surety of close, LURIN was able to successfully pre-empt the marketed process and were awarded the deal."

"LURIN has experience executing construction and management disciplines in commensurate markets throughout Florida, specifically the Panhandle. LURIN plans to invest $5.595 million (or $27,975 per unit) into the property to extensively renovate interior units and exteriors as well as modernize exterior amenities and common areas. In addition, LURIN’s operational presence in the Panhandle allows for significant efficiencies and economies of scale."

"The value creation strategy will begin with capping expenses while increasing and stabilizing occupancy and net operating income. LURIN intends to introduce consistency with regards to management through their own in-house management team, LURIN Property Management (“LPM”). Secondly, LURIN Construction Management (“LCM”) & LURIN Construction Services (“LCS”), will efficiently deliver newly renovated units rivaling the quality of the competing assets in the area, at a discount, while achieving market rents."

"Rent Growth: Pensacola’s strong military presence and growing financial services sector has allowed the economy to weather the downturn in tourism due to the coronavirus pandemic. Rent growth has remained resilient through the pandemic in Pensacola and demand for renovated product is showing no signs of abatement as rents have grown 5.0% over the past year (per CoStar). In terms of whole dollars, effective market rents have reached $1,087 and effective rent growth has increased above its historical market average to 5.2%."

"Strong Market Fundamentals: Referred to as “The Cradle of Naval Aviation,” Pensacola’s economy has a strong military presence followed by Healthcare and Financial Services as its other main economic drivers. West Florida Healthcare, the system that West Florida Hospital operates within, is the seventh-largest employer in the area providing 1,200 jobs. In addition, the property is located less than 5 miles south of University of West Florida, a public university, with an enrollment of over 12,000 students. Also known as “the Emerald Coast,” Pensacola is home to a large hospitality industry anchored by a warm, tropical climate and beautiful white sand beaches. The property is less than 2 miles from the Escambia Bay and only 15 minutes away from nearby Avalon Beach."

"The Pensacola apartment market is one of the tightest in Florida due to a combination of robust population and employment growth and a constrained supply of renovated product coming online. According to CoStar, there are currently no new units set to be delivered to the market over the next 12 months. The majority of the new units delivered in 2019 and 2020 were class-A units geared towards an upscale tenant base. LURIN’s value-add plan for Meadowrun will provide the Pensacola market with newly renovated workforce housing product, while being in close proximity to the businesses that employ Meadowrun’s target tenant base."

"Pensacola’s growth in financial services can be traced back to Navy Federal Credit Union, which announced they plan to double their workforce by 2026. Additionally, the bulk of Pensacola’s temporary job losses during the pandemic were concentrated in the leisure and hospitality industry, while government, financial services, and healthcare suffered little to no job losses in 2020."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  1. Proven Track Record in this Market: LURIN currently owns five assets in the Pensacola market and five in the neighboring Fort Walton Beach market totaling 1,097 units. LURIN Construction Management (“LCM”) and LURIN Property Management (“LPM”) have proven track records in the Panhandle. LCM has renovated over 450 units in the Fort Walton Beach market and completed over $4M of exterior/amenity improvements in the past 18 months. LPM has successfully repositioned its current assets in the Fort Walton Beach market, increasing rents on renovated units at its properties by an average of ~$300."
  2. "Strong Rent Growth Potential: Fueled by momentum from a rapidly growing economy and a lack of new construction, Pensacola has experienced a strong increase in both occupancy and rental rates over the past decade. Per RealPage, Pensacola’s Q4-2020 year-over-year effective rent growth was 6.1% and is forecast to be 5.5% in 2021. Rent growth has remained strong, demand continues to build, and Pensacola landed within the top 3 rental growth markets in Florida, only behind Tampa and Ocala (CoStar)."
  3. "Workforce Housing Demand: LURIN’s primary focus is workforce housing, and the greater Pensacola MSA’s population is projected to increase 4.3% over the next 5 years and the economy is quickly becoming a stronghold for healthcare, financial services and manufacturing jobs as businesses relocate to Florida to take advantage of its business-friendly tax environment and diverse employment base."
  4. "Premier Location: The property is located less than 2 miles from West Florida Hospital, across the street from Ferry Pass Middle School, 5 miles south from University of West Florida, and 4 miles north from Pensacola International Airport (all major employers in the area). The Pensacola Bay area is also known as the “Western Gate to the Sunshine State,” and the property is minutes away from some of the most beautiful white sand beaches in the country."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s renovation strategy will be focused on three key areas; i) interior upgrades, ii) exterior improvements / curing deferred maintenance, and iii) adding additional & improving existing amenities. LURIN believes its value-add investment will yield an average rental increase of $385 per month per unit. LURIN will be using its in-house construction teams for both interior and exterior renovations."

"With regards to operations, LURIN will implement its proven approach for workforce housing encompassing; i) staffing, ii) day-to-day operations, iii) branding & marketing, iv) curb appeal and v) service improvements, through its own in-house management team, LURIN Property Management (“LPM”)."

"It is LURIN’S intention to refinance the asset roughly 21-23 months into the project life cycle, assuming normal market conditions, capitalizing on the value enhancements made to the asset. Once a refinance is complete and the asset is stabilized, it is LURIN’s intention to make quarterly distributions until the underwritten 36-month exit. That said, opportunity may exist for a sale prior to the 36-month mark, in which case LURIN may pursue an earlier exit and monetize the investment."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted LURIN’s business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are a number of potential operational risks associated with this investment, including but not limited to:"

  1. "Expiration of leases,"
  2. "Lease termination and tenant defaults,"
  3. "Due diligence may not reveal all property conditions,"
  4. "Unexpected delays in construction,"
  5. "Financing and refinancing risk, and"
  6. "General local market risk for Pensacola, Florida."

"Additional risks for this investment include an unforeseen material event such as a hurricane or global pandemic."

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

About this Property

"Meadowrun Apartments, a Class-C+ property located in Pensacola, Florida, is a 200-unit property that was built in 1983. LURIN is well positioned to turn the asset into a solid class-B+ property through an extensive value-add strategy."

-Jon Venetos, LURIN

 

Address 3205 E Olive Rd
Square Footage 179,360 sq. ft.
# of Units 200
Year Built 1983
Year Renovated N/A
Current Occupancy 97%
Market Occupancy 95.2%
Current Average Rents $928/unit
Average Market Rents $1,337.65/unit
Purchase Price $28,500,000
Price/Sq. Ft. $158.90
Stabilized Loan to Value 64.94%

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos, LURIN: "LURIN is under contract to acquire a class-C+ property located in Pensacola, Florida. Meadowrun is a 200-unit property built in 1983. LURIN’s business plan will be to transform the asset into a solid class-B+ property through an extensive value-add strategy. The property will represent LURIN’s sixth acquisition in the Pensacola area in the past year. Meadowrun is being purchased for $28,500,000 or $142,500/unit. The equity request from Partners to facilitate the transaction is approximately $9.44M due on or before May 3rd, 2021."

"History: Meadowrun will represent LURIN’s sixth acquisition in the Pensacola area in the past year. Meadowrun is being purchased for $28,500,000 or $142,500/unit. The equity request from Partners to facilitate the transaction is approximately $9.44M due on or before May 3rd, 2021."

"LURIN was notified of the deal via its extensive network of brokers, which allowed it to engage the seller prior to their decision to initiate a formal marketing process for the asset. LURIN’s bid for the property was below another group in price, but due to more favorable terms and surety of close, LURIN was able to successfully pre-empt the marketed process and were awarded the deal."

"LURIN has experience executing construction and management disciplines in commensurate markets throughout Florida, specifically the Panhandle. LURIN plans to invest $5.595 million (or $27,975 per unit) into the property to extensively renovate interior units and exteriors as well as modernize exterior amenities and common areas. In addition, LURIN’s operational presence in the Panhandle allows for significant efficiencies and economies of scale."

"The value creation strategy will begin with capping expenses while increasing and stabilizing occupancy and net operating income. LURIN intends to introduce consistency with regards to management through their own in-house management team, LURIN Property Management (“LPM”). Secondly, LURIN Construction Management (“LCM”) & LURIN Construction Services (“LCS”), will efficiently deliver newly renovated units rivaling the quality of the competing assets in the area, at a discount, while achieving market rents."

"Rent Growth: Pensacola’s strong military presence and growing financial services sector has allowed the economy to weather the downturn in tourism due to the coronavirus pandemic. Rent growth has remained resilient through the pandemic in Pensacola and demand for renovated product is showing no signs of abatement as rents have grown 5.0% over the past year (per CoStar). In terms of whole dollars, effective market rents have reached $1,087 and effective rent growth has increased above its historical market average to 5.2%."

"Strong Market Fundamentals: Referred to as “The Cradle of Naval Aviation,” Pensacola’s economy has a strong military presence followed by Healthcare and Financial Services as its other main economic drivers. West Florida Healthcare, the system that West Florida Hospital operates within, is the seventh-largest employer in the area providing 1,200 jobs. In addition, the property is located less than 5 miles south of University of West Florida, a public university, with an enrollment of over 12,000 students. Also known as “the Emerald Coast,” Pensacola is home to a large hospitality industry anchored by a warm, tropical climate and beautiful white sand beaches. The property is less than 2 miles from the Escambia Bay and only 15 minutes away from nearby Avalon Beach."

"The Pensacola apartment market is one of the tightest in Florida due to a combination of robust population and employment growth and a constrained supply of renovated product coming online. According to CoStar, there are currently no new units set to be delivered to the market over the next 12 months. The majority of the new units delivered in 2019 and 2020 were class-A units geared towards an upscale tenant base. LURIN’s value-add plan for Meadowrun will provide the Pensacola market with newly renovated workforce housing product, while being in close proximity to the businesses that employ Meadowrun’s target tenant base."

"Pensacola’s growth in financial services can be traced back to Navy Federal Credit Union, which announced they plan to double their workforce by 2026. Additionally, the bulk of Pensacola’s temporary job losses during the pandemic were concentrated in the leisure and hospitality industry, while government, financial services, and healthcare suffered little to no job losses in 2020."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN:

  1. Proven Track Record in this Market: LURIN currently owns five assets in the Pensacola market and five in the neighboring Fort Walton Beach market totaling 1,097 units. LURIN Construction Management (“LCM”) and LURIN Property Management (“LPM”) have proven track records in the Panhandle. LCM has renovated over 450 units in the Fort Walton Beach market and completed over $4M of exterior/amenity improvements in the past 18 months. LPM has successfully repositioned its current assets in the Fort Walton Beach market, increasing rents on renovated units at its properties by an average of ~$300."
  2. "Strong Rent Growth Potential: Fueled by momentum from a rapidly growing economy and a lack of new construction, Pensacola has experienced a strong increase in both occupancy and rental rates over the past decade. Per RealPage, Pensacola’s Q4-2020 year-over-year effective rent growth was 6.1% and is forecast to be 5.5% in 2021. Rent growth has remained strong, demand continues to build, and Pensacola landed within the top 3 rental growth markets in Florida, only behind Tampa and Ocala (CoStar)."
  3. "Workforce Housing Demand: LURIN’s primary focus is workforce housing, and the greater Pensacola MSA’s population is projected to increase 4.3% over the next 5 years and the economy is quickly becoming a stronghold for healthcare, financial services and manufacturing jobs as businesses relocate to Florida to take advantage of its business-friendly tax environment and diverse employment base."
  4. "Premier Location: The property is located less than 2 miles from West Florida Hospital, across the street from Ferry Pass Middle School, 5 miles south from University of West Florida, and 4 miles north from Pensacola International Airport (all major employers in the area). The Pensacola Bay area is also known as the “Western Gate to the Sunshine State,” and the property is minutes away from some of the most beautiful white sand beaches in the country."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s renovation strategy will be focused on three key areas; i) interior upgrades, ii) exterior improvements / curing deferred maintenance, and iii) adding additional & improving existing amenities. LURIN believes its value-add investment will yield an average rental increase of $385 per month per unit. LURIN will be using its in-house construction teams for both interior and exterior renovations."

"With regards to operations, LURIN will implement its proven approach for workforce housing encompassing; i) staffing, ii) day-to-day operations, iii) branding & marketing, iv) curb appeal and v) service improvements, through its own in-house management team, LURIN Property Management (“LPM”)."

"It is LURIN’S intention to refinance the asset roughly 21-23 months into the project life cycle, assuming normal market conditions, capitalizing on the value enhancements made to the asset. Once a refinance is complete and the asset is stabilized, it is LURIN’s intention to make quarterly distributions until the underwritten 36-month exit. That said, opportunity may exist for a sale prior to the 36-month mark, in which case LURIN may pursue an earlier exit and monetize the investment."

 

How has COVID-19 impacted your business plan?

Jon Venetos, LURIN: "COVID-19 has not impacted LURIN’s business plan."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: "There are a number of potential operational risks associated with this investment, including but not limited to:"

  1. "Expiration of leases,"
  2. "Lease termination and tenant defaults,"
  3. "Due diligence may not reveal all property conditions,"
  4. "Unexpected delays in construction,"
  5. "Financing and refinancing risk, and"
  6. "General local market risk for Pensacola, Florida."

"Additional risks for this investment include an unforeseen material event such as a hurricane or global pandemic."

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

Offered By

Lurin

Lurin

Dallas, TX

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Assets Under
Management

Currently
$1.02B 10+ assets
Exited
$175.5MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Realized Returns

Total IRR
29.9%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
less than 5 years  
In Business
6 years  
Size
125 Staff * Dedicated investor relations
* All information is reported by Lurin as of 3/12/2021.
Assets Under
Management

Currently
$1.02B 10+ assets
Exited
$175.5MM less than 10 assets
Portfolio LTV
61.5%  
Historical
Returns

Total IRR
29.9%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
less than 5 years  
In Business
6 years  
Size
125 Staff * Dedicated investor relations
* All information is reported by Lurin as of 3/12/2021.

Financials

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Location Details

Pensacola, FL

Jon Venetos, LURIN: "The property is located one block north of Interstate 10, providing the property easy access to all of Pensacola and the rest of Escambia County. West Florida Hospital is located approximately 1.5 miles, or 6 minutes by car, west of the property. A Walmart Supercenter is located less than a mile south of the property, while Ferry Pass Middle School is across the street from the property to the north."

"The Pensacola apartment market is one of the tightest in Florida due to a combination of robust population and employment growth and a constrained supply of renovated product coming online. According to CoStar, there are currently no new units set to be delivered to the market over the next 12 months. The majority of the new units delivered in 2019 and 2020 were class-A units geared towards an upscale tenant base. LURIN’s value-add plan for Meadowrun will provide the Pensacola market with newly renovated workforce housing product, while being in close proximity to the businesses that employ Meadowrun’s target tenant base."

Documents

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Offering Agreement Documents

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