Edgewater on Lake Lynn Apartments : The Retreat at Lake Lynn

Total number of units: 344

3230 Stream Side Road
Raleigh, NC, 27613

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.