Fund

Avesta Multifamily Partners Fund III Nationwide

Property
Type
Multi-Family
Investment Type
Fund
Asset Profile
Value Add
Min. Investment
$100K
Estimated Hold
5-10Y
Target Return (IRR)
12-17%
Target Annual Cash
8-10%
Target Equity Multiple
1.7-2x
 

Offered By

Avesta Holdings Experienced Sponsor

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Assets Under
Management

Currently
$658.58MM
Exited
$153.72MM
Portfolio LTV
67%
Historical
Realized Returns

Total IRR
24.5%
Equity Multiple
1.9x
Annual Cash
0%
Years Of
Experience

As Principals
20+ years
In Business
7 years
Size
20 Staff
* All information is reported by Avesta Holdings as of 6/17/2017.
 

About this Fund

Fund III will employ a “hands-on” approach to investments, unlocking intrinsic real estate value through in-house asset management, property management, and construction/renovation management.

Fund III will be Avesta’s primary investment vehicle and will generally have a value-add investment strategy with a focus on proven investment criteria.

  1. High-Growth Markets – Markets with strong population and job growth compared to broader averages (primarily FL and TX)
  2. Middle-Market Deals – Deals requiring $5,000,000 to $20,000,000 of equity that largely fly under the radar of institutional investors
  3. B/C Assets – Strong demand for basic housing serving a large segment of market and experiencing supply shortages
  4. Downside Protection – Conservative approach seeking strong cash flow and discounts to replacement cost, while avoiding exotic or aggressive leverage

Fund III will take advantage of Avesta’s proprietary deal flow generated through relationships with owners, LPs, lenders, and brokers.

Avesta raises a smaller fund each year rather than one larger fund every 3-5 years, in order to fully leverage deal-specific co-investment and maximize each fund’s diversification potential. Avesta’s principals will invest up to $2 million in Fund III and a similar amount in each annual fund, making Avesta’s annual GP commitment in-line with industry competitors over the same time horizon.

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Key Points

  • Continuation of Successful Strategy: Conservatively targeting assets with low-to-mid-teens gross IRRs and in-place cash flow that can be improved by Avesta’s vertically-integrated platform
  • Strong Fund Track Record: Predecessor funds along with deal specific co-investments from 2015-2016 (“Fund I & II”) have committed $148,000,000 of equity in $468,000,000 of assets, projected to generate gross 19% IRR
  • Liquidity Strategy: Avesta aims to return the vast majority of investor principal by the end of Year 5 through a mix of refinancings and sales of its underlying assets (roughly projected to refinance 80% of assets while selling 20% within 5 years), as well as operating distributions
  • Please see FAQs for more detailed distribution expectations
 

Financials

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Location Details

Nationwide

Fund III will target markets with strong long-term population and job growth projections with a primary focus on Florida and Texas.
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Documents

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Frequently Asked Questions

Below are some of the most frequently asked questions about this offering.

The first projected distribution is scheduled for September 2018.

Avesta’s distribution strategy has two main components.

1. Distributions from Cash Flow (Dividends):

Avesta targets assets with strong cash yields that can be improved through renovations and improved operations. During the value-add period and before stabilization (typically the first ~24 months of each asset’s hold period), Avesta aspires to return 5% of invested capital per year, though actual figures may be less and depend on each asset’s business plan. Post-stabilization, Avesta’s typical annual cash on cash yields per asset range between 8-10% of the original investment and are distributed quarterly.

2. Larger Distributions from Liquidity Events (Refinancings and Sales):

Once a community has been stabilized, Avesta seeks to return a larger amount of investor capital through refinancing (50% of invested capital returned on average) or sale. Because Avesta targets high-growth markets with strong long-term fundamentals, the firm typically chooses to refinance and hold its assets (~80% of the time) though will choose to sell when it feels that the market opportunity is right (~20% of the time). Overall, Avesta’s goal is to return fund investors’ capital in roughly 5 years through a mix of liquidity events and distributions from cash flow, after which the fund still owns the majority of its assets that were not sold and still produce steady yields.

Avesta raises a smaller fund each year rather than one larger fund every 3-5 years, in order to fully leverage deal-specific co-investment and maximize each fund’s diversification potential. Avesta’s principals will invest up to $2 million in Fund III and a similar amount in each annual fund, making Avesta’s annual GP commitment in-line with industry competitors over the same time horizon.

No, this offering is only available to US residents.

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Have a Question?

Send Avesta Holdings and/or RealCrowd a message. If you have a question about this offering ask Avesta Holdings. If you have a question about the transaction process or other general inquiry, RealCrowd will be happy to help.

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