Meridian Court South Apartments

Indianapolis, IN

Download Offering Memorandum

Co-Manager

Pepper Pike Acquisition Associates, LLC

Asset/Strategy Type

Value-Add Apartments

Minimum Investment

$50,000

Additional

Information

Express Interest

Targeted Returns:
Download Offering Memorandum to View Returns

Targeted Hold Period:
4 years

Final Unit Count:
289 Apartments Units

Fairway America, LLC (“Fairway”) and Pepper Pike Acquisition Associates, LLC (“Pepper Pike”) (collectively, the “Co-Managers”) intend to acquire Meridian Court South Apartments (the “Property” or “Meridian”), a 289-unit Class B multifamily project located in Indianapolis, IN. The Property will be Fairway’s 18th acquisition with Pepper Pike. The Co-Managers already own three other assets together in the Indianapolis market.

Investment Summary

  • Mark-to-Market / Renovation Premium: The Co-Managers believe there is an immediate opportunity to mark expiring leases on unrenovated units to market rent, yielding an average +9.4% premium over in-place rents. Additionally, the Co-Sponsor intends to implement a $6.3M renovation program which is projected to generate $339 more in monthly rent compared to in-place, representing an expected 18.5% return on capital investment.
  • Competitive Rental Pricing: : After completing the $6.3M renovation, leasing efforts are expected to garner increased demand, with rental rates that compare favorably in the Indianapolis market. The average blended rent for competitor properties is $1,310 per month, while the Property’s post-conversion market rents are forecast to be $1,160.
  • Deep Market Knowledge: Pepper Pike currently manages 3,227 units in the Indianapolis market, including projects such as: Riverbend (996 units), Crooked Creek (216 units), Lake Castleton (1,261 units), 9 on Canal (304 units), A/62 Apartments (209 units), and Fountain Parc (241 units). Additionally, Pepper Pike has another 1,190 units that are under contract, including this Property.
  • Strong Demand in Great Location:  Well-known investor Peter Linneman ranked Indianapolis a “red hot” market, second only to Salt Lake City.2The market has rebounded from COVID and is experiencing strong employment growth and only 2.0% unemployment.3 Healthcare and related employers in Indianapolis are expected to continue to grow. The local economy has supported +12.1% year-over-year market rent growth for Class B properties in the submarket.4 Meanwhile, no units have been delivered over the past 12 months and new construction remains muted, reinforcing a tight submarket vacancy rate of 3.9%.4

The business strategy is subject to change. There are many risks to participating in this opportunity. See “Risk Factors and Fee Disclosures” in the Offering Memorandum for a discussion of some of these risks, including loss of capital, illiquidity, lack of diversification, and capital call risks. This opportunity is unsuitable for investors who are not prepared to hold their ownership position indefinitely and who cannot afford a complete loss of capital.

1 CoStar Competitive Set Properties, June 2022
2 The Linneman Letter, Q1 2022
3 https://www.bls.gov/regions/midwest/in_indianapolis_msa.html
4 CoStar Analytics, South Marion Multifamily Submarket, June 2022

Property & Renovation Summary

Address
7266 Lockwood Lane
City / State
Indianapolis, IN
Year Built / Renovated
1987 / 2019
Units
289 units
Average Unit SF
746 SF
Rentable SF
215,525 SF
Underwritten Market Rent: Unrenovated / Renovated
$820 / $1160
Capex / Unit
$21,960
Expected Hold Period
4 years
Total All-In Cost
$43,113,673