PROPERTY DESCRIPTION
Cottonwood Creek Apartments (renamed 301 Greenville) is a 200-unit, Class B value-add opportunity in an “A” location. It is a two-story, garden-style community originally built in 1984. It is adjacent to the Allen High School campus and across the street from the Allen Freshman Center. All unit interiors were essentially untouched over the seller’s ownership period. At acquisition, the property was 96% occupied and offered tremendous potential for rental rate growth through an extensive interior value-add program and raising current rents to current market rates.

ACQUISITION PROCESS
Panther and Knightvest purchased the Cottonwood Creek Apartments on July 25, 2018, for an all-in price of $116,000 per unit. The Property had been owned for about 20+ years by two individuals, one lawyer and one physician. There was tremendous upside in management and operations at Cottonwood Creek. The previous owners had operated with an occupancy driven mentality, meaning, keep occupancy high without raising rents. Water and other utilities were not billed back to residents offering an additional income source. The property required deferred maintenance to be addressed including wood replacement, paint, lighting, pool furniture and slight repairs to pool tile and fencing, landscaping, and signage. There were plans for the addition of a new Clubhouse/Leasing Office to be located at the front entrance of the property on Greenville Avenue which was completed in early 2021. The existing office was converted into a fitness center as planned.

PROPERTY HISTORY
The original strategy called for the largest per unit capital improvement plan ($23,573 per unit) in the history of the Panther portfolio. Over the course of the 2.66 year holding period, Knightvest upgraded 124 units, or 62% of total units to its highest-level Quartz upgrade program. During this period, the property consistently ranked number one within the Knightvest portfolio for upgrade premiums, regularly surpassing $300 per unit or 30%. On March 25, 2020, we refinanced the property and were able to catch up accrued, unpaid preferred return balances while also returning approximately 20% of original capital. With the proceeds from the new loan, we were able to build a new Leasing Office along Greenville Avenue which substantially enhanced the curb appeal (and leasing traffic) of the property.

EXECUTION AND SALE
301 Greenville was marketed for sale in March 2021 and received a pre-emptive offer.Due to the fact that the marketing process had not been concluded, Knightvest and Panther countered at $33M ($165,000 per door) with 2% required earnest monies, of which $330,000 was non-refundable, and the remaining $330,000 became non-refundable upon the expiration of the 30-day due diligence period.

This sale exceeded our pro-forma projections providing a 1.69 multiple to Panther FW Investors and an annual average return on investment of 25.00% over the 2.66 year holding period.

PROPERTY DESCRIPTION

ACQUISITION PROCESS
Panther and Knightvest acquired The MarQ at 1st Apartments on May 29, 2019, for an all-in purchase price of $146,341 per unit. The property waslocated in the Tempe submarket of the Phoenix MSA, adjacent to Arizona State’s main campus and Tempe Town Lake, a recreational and entertainment hub. The property was built in 1985 and required significant capital investment at the time of acquisition to bring it up to today’s standards for the market. The plan was to upgrade both the interiors and the common areas at the property, narrow the market rent gap, and to ultimately sell the property for $225,101 per unit in 5 years (2024).

PROPERTY HISTORY
The Property had been owned by the seller since 2016 and had been well maintained; however, there was a substantial opportunity for value-add with this property given the strength of its location combined with a significant rent gap of over $800 for nearby properties with new construction. The property was unique for the area given its low density (only 22 units per acre vs 65 units per acre for new construction).This was a true differentiator as Tempe continues to densify with migration to the area. Knightvest’s plan was to enhance the common areas, amenities, pool areas and improve the interior renovations by adding its highest-level Quartz upgrade package (quartz countertops, stainless steel appliances, new cabinet door fronts and new hardware/fixtures) to all of the classic units at the property (45 units) while also making intermediate upgrades (including washer dryer connections and appliances in all units) to an additional 40 units. About 77% of the units were upgraded. At the time of sale, the property was 95% occupied with average rents of $1,168, a $226 increase over takeover rents.

EXECUTION AND SALE
The property was marketed for sale on May 20, 2021, with a call for offers on June 22, 2021. The property had very strong interest and was ultimately awarded to the buyer for $280,000 per unit ($46 million)which compared favorably to our underwritten exit price of $225,101 in year 5. Panther LP’s received a 40% average annual return and a 1.96x multiple on invested capital over the 2.4-year holding period. These returns compare favorably to our original underwriting which projected a 15% average annual return and a 1.75x multiple over a 5-year holding period.

This sale exceeded our pro-forma projections providing a 1.96x multiple to Panther FW Investors and an annual average return on investment of 40.45% over the 2.33 year holding period.

PROPERTY DESCRIPTION

ACQUISITION PROCESS
Panther and Knightvest acquired The Indigo Palms Apartments on November 5, 2019, for an all-in purchase price of $194,542 per unit. The property was located in the Downtown Phoenix submarket of the Phoenix MSA in a central location near Sky Harbor Airport and Downtown Phoenix with quick access to major thoroughfares including Interstate10 and Highway 202. The property was built in 2000 and while the common areas had been well maintained, interior upgrades had not been undertaken. The operating plan for the property was to make modest renovations to the common areas with heavy renovations of the interiors, thereby narrowing the market rent gap, and ultimately to sell the property for $238,245 per unit in 5 years (2024).

PROPERTY HISTORY
The Property had been owned by a southern California based owner, since 2013. This was their only Arizona property and while the property had been well maintained; the owner had not re-invested capital in the interiors of the units and as a result, failed to fully participate in Phoenix’s explosive rental growth. There was opportunity for value-add with this property given its central location combined with a significant rent gap of ~$260 for nearby garden style properties and $500-600 for new development. The capital budget for this investment was $6,784,000 ($15,704 per unit) and included adding windows, removing walls in the leasing center in order to brighten its appearance, and renovating the fitness center with a new paint scheme and equipment. The building exterior was painted and cabanas with TVs were installed at the main swimming pool. At the time of sale the property was 98% occupied and about 250 of the unit interior upgrades were completed. These upgrades increased in-place rents from $1,041 at acquisition to $1,251 (+20%) in May 2021 (1.5 years). A diligent focus on expenses allowed the property to exceed its operating income projections which allowed us to make distributions earlier than anticipated at a higher percentage. The property was paying 12% annualized coupon in year 2 prior to sale vs our original plan of 7%.

EXECUTION AND SALE
The property was marketed for sale on May 27, 2021, with a call for offers on June 24, 2021. The property received very strong interest from both institutions and local groups and was ultimately awarded to a Dallas based buyer for $296,000 per unit ($127,875,000), far surpassing our underwritten year 5 exit price of $238,245. Panther LP’s received a 47.51% average annual return or a 1.91x multiple on invested capital (MOIC) over the 1.9-year holding period. These returns compare favorable to our original underwriting of a 15%-17% average annual return and a 1.79x multiple over a 5-year holding period.

This sale exceeded our pro-forma projections providing a 1.91x multiple to Panther FW Investors and an annual average return on investment of 46.72% over the 23-month holding period.