SPANISH COVE & HATHAWAY VILLAGE

ST. LOUIS, MO

Co-Sponsor

Pepper Pike Acquisition Associates, LLC

Asset/Strategy Type

Value Add Multifamily

Minimum Investment

$50,000

Additional

Information 1

Preferred Return:
8%

Targeted Hold Period:
5 years

Targeted Returns:
For information about potential returns, please request the OM



1 There is no guarantee that targeted returns will be achieved or that preferred return payments will be made.

Fairway America, LLC (“Fairway”) and Pepper Pike Acquisition Associates, LLC (“Pepper Pike”) (collectively the “Co-Managers”) intend to acquire Spanish Cove Townhomes and Hathaway Village Apartments (each a “Property” and collectively the “Properties”), two multifamily properties comprising 912 total units in the St. Louis metro area. The Properties will be Fairway’s 15th and 16th acquisitions with Pepper Pike.

The Co-Managers plan to purchase the Properties at a basis below replacement value. The Co-Managers believe the Properties are well-located in a desirable submarket with little new supply, and the Co-Managers plan to implement a significant value-add plan designed to modernize the Properties and pursue higher rents.

The Co-Managers intend to co-manage and co-execute the business strategy for acquiring, renovating, operating, and selling the Properties (the “Project”).

Business Strategy 2

The Co-Managers plan to execute a $18.4 million (approximately $20,200 per unit) capital improvement plan, which will focus on updating the 1971-vintage Properties with modern interior finishes and clubhouse and pool area upgrades. The Co-Managers are targeting a resulting average $208 rent increase immediately post-renovation.

Opportunity Highlights 2

  • Acquiring at Basis the Co-Managers Believe is Below Replacement Value: The Co-Managers will acquire the property for $47.6 million, 28% below what the Co-Managers believe is the replacement value of the Properties, based on recent sale prices of comparable properties built between 1971 and 1988 (as reported by CoStar Analytics).
  • Limited New Supply & Pending Demand: Investment activity in the St. Louis metro continues,4 driven by out-of-state investors seeking opportunities in the metro for its stability relative to coastal markets.5 Market research indicates recent employment growth in the metro has been driven by the trade, transportation and utilities sector, as e-commerce is driving a warehouse boom and tenants like Grey Eagle Distributors and Amazon have moved to the area.6
  • Well-Located for Operational Efficiency & Renter Demand: The Properties are separate assets but are located less than four miles apart, allowing the Co-Managers to share onsite property management resources in an effort to maximize operation efficiency. Each Property is also located less than 14 miles (an approximately 25-minute drive) from downtown St. Louis and major employers like Anheuser-Busch.

Meet Our Co-Sponsor3

Pepper Pike Capital Partners is a real estate investment, development, and management company based in Cleveland, Ohio. Pepper Pike is comprised of a diverse group of talented and entrepreneurial real estate professionals. Over the past decade, Pepper Pike’s principals have acquired and (re)developed over 25,000 apartments homes throughout the Midwest and Southeast, with a cumulative transactional value in excess of $1.5 billion.

Pepper Pike’s experience has allowed them to form close relationships with brokers, managers, and owners. Pepper Pike is often presented with the “first look” at off-market deals, affording them the ability to negotiate deals with limited/no competition. Pepper Pike and its affiliates acquire, renovate, and manage each of the properties in its portfolio. Vertical integration strengthens Pepper Pike’s overall platform and supports its long-term investment goals. Pepper Pike is well respected in the market for its ability to close transactions quickly and at the agreed upon terms. As owners, Pepper Pike sticks to the business plan and only deviates if market conditions support it.

2 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.

3 Source: Pepper Pike Capital Partners

4 Cushman & Wakefield MarketBeat: St. Louis Multifamily Q3 2021

5 Why the St. Louis multifamily market is ‘on fire,’ in or out of a pandemic.” St. Louis Business Journal, August 2021

6 Yardi Matrix Multifamily St Louis Report-Fall 2021, October 20, 2021

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outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza

Interested in the Spanish Cove & Hathaway Village opportunity? Please click below to request an Offering Memorandum, an appointment, or if you have questions.