Cortland Med Center
Houston, TX
PROPERTY OVERVIEW
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Cortland Med Center is a 344-unit, 2003-built apartment complex in the Med Center submarket of Houston.
- The property received the 2023 Kingsley Excellence Award for resident satisfaction. We will take over a turnkey community with stable returns and minimal concern about major capital projects in the future.
- Cortland Med Center benefits strongly from Houston’s ongoing population growth. The property offers excellent connectivity to Central Houston’s employment with 326,000 jobs within a five-mile radius and 983,000 jobs within a 10-mile radius.
- Less than 10 minutes away, the Texas Medical Center (TMC) is the largest life sciences destination in the world with 106,000 employees. Given that most of the land is occupied by TMC institutions, there is limited available land for development, mitigating the threat of new supply.
- Current / Stabilized / Breakeven Occupancy: 93.3% / 95.0% / 69.7%
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In-Place Rent / Pro Forma: $1,503 / $1,473
INVESTOR RETURNS
- Our sponsor team will partner with the Houston Housing Authority (HHA) on their 11th deal to receive an 85% tax exemption will increase our NOI by 29% on Day 1
- Limited Partners are owed an 8% preferred return
- Shortfalls in this preferred payment will accrue and compound at the preferred return rate.
- Upon a capital event, investors are first entitled to their preferred return and 100% return of their original capital.
- Thereafter, excess proceeds from 8–15% IRR are split 70% LP / 30% GP, and above 15% IRR, 50% LP / 50% GP.
- Class B shares are available via a minimum investment of $500k and provide a 9% preferred return with a 30% promote (no secondary hurdle).
- Investors receive 100% of ongoing cashflow, as well as a compounding 8% IRR-based preferred return above the full return of initial investment, before any performance incentive is paid to the sponsor.
- Preferred return is cumulative and compounding, rather than the simple cashflow split often seen in other investments.
