Property Description

Panther and Knightvest purchased Capital Place (renamed Mason Oliver) on June 23, 2020, which marked our 22nd acquisition with Knightvest. It is a midrise wrap apartment community completed in 2015 with 292 units or 375,119 net rentable square feet (SF) on two separate city blocks (11 Capital Place and 12 Capital Place are the current respective names). The property is based in the Downtown Phoenix submarket of the Phoenix MSA in central location near Sky Harbor Airport and Downtown Phoenix with easy access to major thoroughfares including Interstate-10 and Highway 202. Capital Place consists of two mid-rise buildings built in 2015 and separated by one city block. The unit mix consists of 50 (17%) studio apartments, 172 (59%) one-bedroom apartments, 62 (21%) two-bedroom apartments and 8 (3%) three-bedroom apartments. The average unit size is 827 SF with studios averaging 615 SF, 1 BRs at 767 SF, 2 BR’s at 1,095 and 3 BRs at 1,324 SF. The property has structured parking on the ground floor with a total of 327 parking spaces, or 1.1 per unit (tenants pay $40/mo. for a parking spot). Key amenities at each property include fitness centers, swimming pools, resident clubhouses and business centers (11 Capital Place also includes a conference room).

Acquisition Process

Panther and Knightvest acquired Capital Place Apartments on June 23, 2020, for an all-in purchase price of $220,274 per unit. The business plan included modest changes to common areas, reposition to a better tenant profile, and stabilizing the community. This was the first property to implement the Knightvest Quartz 2.0 interior upgrade program which included quartz countertops with waterfall edges, permanent quartz kitchen islands, and custom back splash thereby narrowing the market rent gap and ultimately projected to sell the property for $277,820 per unit in 5 years (2025).

Knightvest secured debt of $38.12 million (59% loan-to-cost) with a floating interest rate of 30-day LIBOR + 280 basis points (3.00% at acquisition) with a 10-year term, interest only for 5 years.

Property History

At the time of purchase, the Phoenix Metro area had added 80,000 new jobs from June 2018 to June 2019, which ranked #2 nationally. Phoenix also ranked 4th nationally for projected population growth for the period 2016 to 2026 at 118,000 new residents annually and was #1 in the nation for rent growth in 2019 at 8.1%. This market success brought several developers and new apartment supply to the Downtown area with ~1,200 units delivered in 2024, and ten high-rise mixed-use buildings expected to open in 2025. As such the average rents at the property have remained flat since 2023. Looking ahead, Phoenix, and more specifically, the Downtown Phoenix submarket, are projected to be some of the last markets to stabilize as they absorb a larger amount of new supply than other markets throughout the US.

Capital Place started paying distributions as projected at 5% in October 2020 and increased to 7% through 2022. Distributions were suspended to accrue funds for our 2-year interest rate cap extension in June 2023. Over the hold period the average in-place rents grew +$302 ($1,261 at acquisition vs. $1,563 today) and our average occupancy was 93%. Net operating income improved 24.4% through 2024 ($2.5M at acquisition vs $3.1M in 2024).

Execution and Sale

The property was sold for a 4.85% cap rate on trailing 12-month net operating income. Panther LP’s will receive an 0.4% average annual return or a 1.02x multiple on invested capital (MOIC) over the 5.1-year holding period. These returns compare to our original underwriting which projected a +/-15% average annual return and a 1.73x multiple over a 5-year holding period. At closing, Panther LP’s received a distribution equivalent to 0.795x of their original investment. Previous distributions received to date were 0.142x original investment plus there was a holdback at closing of 0.085x, for a total investor MOIC of 1.02x.

Property Description

Panther and Knightvest acquired the Edgewater at Lake Lynn Apartments (renamed Retreat at Lake Lynn) on September 24, 2020, which marked our 23rd acquisition with Knightvest. The 344-unit, Class B-, garden style property is located in Raleigh, NC. Edgewater is situated on a sprawling 36-acre property overlooking Lake Lynn in Raleigh, NC. Lake Lynn is a 56-acre lake surrounded by a 2.8-mile jogging and biking trail that is very popular among local outdoor enthusiasts.The Property was constructed in 1986 and had been under the same ownership, Abacus Capital Group (NYC), since 2017. The property had been well maintained but they did not implement an interior upgrade program which allowed Knightvest to execute their highest-level Quartz upgrade package quartz countertops, new cabinet doors, a superior fixture package, new tile tub surrounds, kitchen backsplash, baseboards & doors. We also plan to upgrade some units with painted cabinet doors, kitchen backsplash, new baseboards & doors, and new tub tile surrounds. The business plan also includeda complete renovation of the leasing and fitness centers, new pool amenities including cabanas, grilling stations, and TVs, and a repurpose of the existing tennis courts into a resident hangout pavilion.

Acquisition Process

Knightvest acquired the property amid the Covid-19 pandemic, on September 24, 2020, off market at a 7% discount to pre-Covid pricing for $148,256 per unit. At the time of acquisition, the rent gap was approximately $300-$400 vs nearby properties of similar vintage and quality. The original debt of $38.5M (66% loan to cost) was secured with Prudential for a 3+1+1 lease term at 300 bps + 30-day LIBOR or an all in rate of 3.25%.

Property History

Edgewater was a strong performer out of the gate, with in-place rents growing by over 10% in the first year of ownership ($1,003 in September 2020 to $1,105 in September 2021) while maintaining a strong occupancy of 95%. The initial performance at the property enabled distributions to begin ahead of schedule in December 2020 at a 6% coupon rate vs underwriting of 5%. The Raleigh market was receptive to the upgrade strategy at the property and rents continued expanding, even as market growth slowed in 2023 and 2024.

The original loan on the property had a floating interest rate, and in March 2023 we refinanced that loan into a new, fixed interest rate loan (5.01%) to mitigate interest rate risk. The new loan extended the maturity date to April 2028 and added an additional year of interest only payments. With the proceeds from the refi, we made a one-time distribution equivalent to 12.5% of original capital, and reserved funds to build out a bulk Wi-Fi platform and to upgrade an additional 100-unit interiors at the property. Since then, we have upgraded 57 of the 100 planned unit interiors and have rolled out the Wi-Fi program, which has added $262,000 to annual income. In total, we have renovated 80% of units at the property and have expanded in-place rents by 40% since inception ($1,003 to $1,411). Net operating income (NOI) for the property has expanded from $2.33 million to $3.53 million in 2024, or growth of 51%.

Having already achieved the majority of the original business plan at the property as we approach the end of our underwritten holding period (5 years), one of our co-investors in the property asked if we would entertain a property sale. Knightvest ordered a broker opinion of value (BOV) from Newmark which showed a “market price” of $193,677 per unit and a “strike price” of $203,852 per unit, a valuation range we felt was compelling in the current market environment.

Execution and Sale

In June 2025, Greystar purchased the property at a 5.15% cap rate. While returns fell below original proforma, we were pleased to deliver an 8.00% average annual return to Panther LP’s or a 1.38x Multiple on Invested Capital (MOIC) over the 4.8 year holding period. The distribution multiple to investors at the sale of the property was 1.03x (excluding a 0.014x holdback for reps and warranties will likely be distributed 6 months after closing), with investors previously having received distributions of 0.363x, bringing the total MOIC to 1.40x.