We’re happy to announce that we are in final negotiations with a buyer to sell the Northern Cross. As such, we plan to 1031 exchange the proceeds into the Halston 5 portfolio, details below. Based on the successful execution of our business plan, combined with strong demand for multifamily assets, we are happy to say that this intended sale of Northern Cross will exceed our projected returns as measured by IRR and annualized cash-on-cash return.
At the contract sales price, you can expect to receive an approximate 20.0% IRR and an annualized cash-on-cash return of 22.7%. As a reminder, we initially projected 16.1% IRR and annualized cash-on-cash return of 21.1%.
You can expect to receive an approximate 1.52x equity multiple from the proceeds of the sale. For example, if you invested $100,000, you would receive approximately $152,000. The project, including past distributions, will generate an approximate 1.73x equity multiple.
Here is a summary of overall returns for a $100,000 investment:
*NOTE: If you elect to 1031, your new coupon amount will be based on this higher amount versus your original investment.
The replacement asset, the Halston 5 portfolio, consists of five properties located across the Atlanta and DFW markets, offering strong value-add opportunities across a diversified pool of assets. With an average year of construction of 2002, this portfolio features well-maintained, institutional quality assets located in strong submarkets with significant value-add potential.
Your equity will be invested in the whole portfolio, meaning you will benefit from the diversification of multiple assets with your single investment. Additionally, because the replacement assets have already been identified, we are expecting a very short down time between the sale of this property and acquisition of The Halston 5.
Depending on your individual circumstances, electing to participate in a 1031 exchange may help defer tax consequences that may arise from the sale of Northern Cross. Alternatively, you have the option to liquidate at sale and not participate in a 1031 exchange.
Ashcroft Capital LLC is not an investment adviser or a broker-dealer and is not registered with the U.S. Securities and Exchange Commission. The information presented herein should not be used as the sole basis of any investment decisions, nor is it intended to be used as advice with respect to the advisability of investing in, purchasing or selling securities, nor should it be construed as advice designed to meet the investment needs of any particular person or entity or any specific investment situation. None of the information presented herein constitutes legal, accounting or tax advice or individually tailored investment advice. The recipient of this information assumes responsibility for conducting its own due diligence and assumes full responsibility of any investment decisions.
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