The property is well located near major employment centers, retail, transportation, and some of Chicagoland’s strongest suburban communities. Chicagoland is the 3rd largest city in the United States with a very diversified economy.  It has a $923 billion GMP and 30 Fortune 500 HQs, supporting resilient rental demand. Strong employment growth, low unemployment (4.7%), and high educational attainment in surrounding counties bolster long-term demand. There is limited new multifamily supply within a 7-mile radius, with only one property under construction and two proposed. Chicago’s disciplined supply growth supports rent stability and growth.

We are purchasing Watermark at a 6.14% in-place cap rate when incorporating the value of the existing financing, and our cost basis is $290k/unit, which is a 20% discount to replacement cost. The offering includes an irreplaceable HUD loan at 3.31% with 32.8 years remaining, Providing stable, long-term financing. Our financial metrics are forecasted to return 1.94x–3.19x MOIC and a 14%–15% IRR over a 5–10 year investment period. Average annual cash-on-cash distributions are projected at approximately 7.5%. When factoring in the benefit of the principal amortization, the annual ROE improves to 11.3%.