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Optimist Park Multifamily Development

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Charlotte, NC
Multifamily
350 units

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Risk Profile

Development

Sponsor

Jefferson Apartment Group

Date Aquired

May 2022

Total Equity

$48mm

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(646)-494-7233
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$25,000 minimum investment
Certain data and information discussed below is sourced from third party sources. Please review the investment memorandum for specific sourcing information.

Summary

Cadre is partnering with Jefferson Apartment Group (“Sponsor”) to develop Optimist Park Multifamily Development, a Class A multifamily asset located in NoDa (short for North Davidson) - Charlotte’s arts and entertainment district. We were attracted by the potential to execute on a shovel-ready development alongside a best-in-class sponsor in a burgeoning location within one of the fastest growing markets in the country.

As a principal transaction, Cadre has completed full underwriting and diligence, including approval from Cadre's experienced Investment Committee, and will be placing the Project into the Cadre Direct Access Fund. Cadre is investing alongside Cadre investors and participating in deal promote to align interests, and has structured a majority, controlling interest in the Project, which allows Cadre to actively asset manage the Project and control major decisions in conjunction with other structural protections to protect Cadre’s investor capital.

Key Investment Highlights

Dynamic Market with Strong Growth Drivers

Driven by its business-friendly environment, relative affordability, and strong growth engines in financial services, energy and power, and information technology, Charlotte’s job and population growth has been ~3x the national average over the past five years. Cadre’s own data science team identifies Charlotte within the “Cadre 15”, one of the 15 top markets with strong potential for risk adjusted returns.

Continued Urban Densification

Numerous recent job announcements and relocations have prioritized the urban core, tens of thousands of new jobs from companies like Truist Bank, Lowe’s, USAA, Honeywell, LendingTree, and Robinhood. Atrium Health, Wake Forest Baptist Health and Wake Forest School of Medicine have selected Midtown to build Charlotte's first four-year medical school, which will support ~3.5k students each year.

This has led to 7.4mm sf of office construction, 10k new multifamily units, and 1,750 hotel keys. This rapid densification has brought a dynamism to the urban core that is now emanating outward to other submarkets like NoDa.

Compelling Transaction Dynamics

An attractive land basis and lower density construction type allows the Project to offer a 30%+ rent discount to high-rise construction that is increasingly being built in the nearby urban core, less than one mile away. Cadre has already closed the land at a contract price from 2018, and has executed a construction contract with the general contractor. Investors will be investing in a shovel-ready project.

High-Growth Market

  • Wake Forest/Atrium Health’s New Medical School: Atrium Health,Wake Forest Baptist Health and Wake Forest School of Medicine joined together as a single enterprise and have selected Midtown (less than 2.5 miles from site) to build Charlotte's first four-year medical school. When operational by 2024, the new school of medicine and other related activities in healthcare is projected to generate an additional $5.2bn in economic impact and create nearly 43k jobs over the course of the next 20 years.
  • The New Charlotte: Optimist Park is a bohemian enclave just outside of Uptown Charlotte and within the NoDa submarket, which is known for its restaurant, nightlife, breweries, and art galleries. The NoDa submarket has been propelled by the delivery of the light rail in 2018, which has spurred substantial development and adaptive re-use of multifamily, office, and retail. Cadre believes the light rail’s delivery in NoDa is causing similar transit-oriented growth as what occurred in South End - now one of Charlotte’s premier submarkets - following light rail delivery there in 2007.
  • Walkable to Optimist Hall: Optimist Hall, a 147k square foot adaptive reuse project that was completed in 2019, is only two blocks from the site. It contains numerous retail stores along with many restaurants including a brewery. It also houses 91k square feet of creative office space leased to Duke Energy as their new innovation center. Most recently, the developers of Optimist Hall received re-zoning approval for further development on five adjacent acres. This is expected to add more retail and office space further cementing Optimist Park as an amenitized, transit-oriented hub.

Business Plan

Cadre closed on the land in May 2022, simultaneously with the execution of the GMP construction contract and closing of the construction loan. Optimist Park Multifamily Development will be wood frame construction over a one-story podium, with brick and Hardi siding that will allow the Asset to aesthetically blend into the historically industrial submarket (and adjacent Optimist Hall). Upon delivery in 2024, the Class A multifamily community will consist of 350 units with high-end finishes, multiple outdoor amenity areas including a pool and a courtyard area with BBQ and gaming overlooking Uptown Charlotte, and indoor amenities totaling ~11k sf including a fitness center, resident lounge, coworking area, and clubroom. The Asset’s underwritten rents are relatively affordable for the median Charlotte household, are in-line with comparable product nearby, a ~20% discount to existing product in the urban core, and an expected ~30%+ discount to product currently under construction given it is primarily high-rise construction that will demand premium rents.

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Optimist Park Multifamily Development

Development Cost

$111mm

Total Equity

$48mm

Underwritten Hold Period

4 years

Deal Details
Speak with our Investor Relations Team at
(646)-494-7233
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