Enclave at Cornerstone Apartments : Parc @Champions Forest

Total number of units: 232

15330 Bammel North Houston Road
Houston Texas, 77014

PROPERTY DESCRIPTION

ACQUISITION PROCESS
Panther and ComCapp acquired Enclave on May 1, 2014, for an all-in purchase price of $77,898 per unit. The Enclave was built in 2000 with 232 multifamily units located in Champions area of Houston, Texas. The plan for the property was to upgrade tohardwood-style flooring, new appliance packages, and upgraded common amenities. Original underwriting projected a 17.2% average annual return over a 5-year holding period.

PROPERTY HISTORY
The property performed well with average rents growing from $914 at acquisition to $1,108 by the end of 2021. The property was initially marketed for sale and under contract prior to COVID, but the buyer terminated the contract, lost significant earnest money which prompted ComCapp to refinance the loan and postpone a sale. At the time of the refi, Panther investors received the equivalent of 69% of their original investment which caught them up on their accrued, unpaid preferred return balances (30%) and reduced their capital account balances by 39% (30% + 39% = 69%).

The property continued to perform well, maintaining >95% occupancy and paying a 10% annualized coupon based on original investment (16% based on current capital balances).

EXECUTION AND SALE
We were previously under contract to sell Enclave in March 2020 for $24.3 million or $104,741 per door, but the Purchase and Sale Agreement was terminated by the buyer due to COVID. Panther ultimately received $318,000 in earnest money for the canceled traction and refinanced the loan on the property on November 1, 2020.

The property was ultimately remarketed at the end of the new loan lock out period and awarded to Lone Star Capital atthe agreed upon purchase price of $30.5 million which was equivalent to $131,466 per door and compared favorably to our original acquisition price of $77,898 per door on May 1, 2014, and the projected 5-year exit price of $104,897. In addition, there was an estimated $800,000 in cash on the balance sheet at closing that was part of the sale distribution.

Panther LP’s received a 18.5% average annual return or a 2.44x multiple on invested capital (MOIC) over the 7.8 year holding period. These returns compare to our original underwriting which projected a 17.2% average annual return over a 5 year holding period. Panther LP’s received an initial distribution equivalent to 1.13x of their original investment (having already received 1.31x, thus the total of 2.44X).

This sale exceeded our pro-forma projections providing a 2.44x multiple to Panther FW Investors and an annual average return on investment of 18.5% over the 7.5 year holding period.