Retreat at Arc Way
Part of the Ashcroft Value-Add Fund II
The Ashcroft Value-Add Fund II (“AVAF2”) has entered into an agreement to purchase Retreat at Arc Way, a 284-unit property, off-market deal located in the Norcross submarket of Atlanta, Georgia. This acquisition marks the first for the AVAF2 and Ashcroft’s fifth property overall in Atlanta. The close proximity to employment hubs, highly rated schools, and one of the largest industrial corridors in the southeast, make Norcross one of the fastest growing submarkets in the Atlanta metropolitan. Rents increased by 22% and average occupancy in the submarket grew to 96.8% in 2021.1 These factors, along with projected population growth and average household incomes exceeding $62,000, position the Norcross multifamily market for growth.
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Targeted Fund Returns*
13% to 20%
Cash on Cash Returns
6.8% to 8.5%
Levered IRR (Net)
13% to 18%
Equity Multiple (Net)
1.5x to 2.0x
Annual Cash-on-Cash Projections**
*Based on 5 year hold for Class B Limited Partner Investment. Target returns represent ranges for base case, downside, and upside scenarios.
**Projected cash on cash returns are based on base case assumptions for the properties within the Fund
Note: Projected returns are based on LP levels of Fund
Investors have the opportunity to invest in Class A and/or Class B Limited Partnership Interests.
Limited Partner (A) - Class A
Class A Limited Partner’s earn a coupon of 9% per annum of such Limited Partner’s investment in Partnership (the “Class A Coupon”). Class A Limited Partners have limited distributions upon disposition of the Property. This tier offers stronger projected cash flow and reduced risk as compared to Class B Limited Partners.
Limited Partner (B) - Class B
Class B Limited Partners earn a coupon of 7% per annum of such Limited Partner’s investment in Partnership (the “Class B Coupon”). Upon the disposition of the Property, after payment of debt, return of Class A and Class B Limited Partner investments, payment of any unpaid Class A and Class B Coupon Amounts, and then, prorata, seventy percent (70%) to the Class B Limited Partners and thirty percent (30%) to the General Partner until such time as the Class B Limited Partners have received a cumulative amount equal to thirteen percent (13%) IRR. Then, Class B Limited Partners will receive 50% of the remaining proceeds from disposition. This tier has a lower coupon but provides greater participation upon disposition or capital event compared to Class A Limited Partners.
Benefits of Investing in a Fund
- Spreads out investor equity over multiple acquisitions
- Greater exposure to investments in various markets and asset classes
- Ability to invest in different individual property business plans and hold periods
- Provides the opportunity to participate in upside on property price appreciation upon sale, refinances, and supplemental loans
- Diversification offers the ability to reduce risks while offering the potential for higher returns
- Potential tax benefits for investors such as pass-through depreciation opportunities and 1031 exchanges
Disclaimer: Ashcroft is not an investment adviser or a broker-dealer and is not registered with the U.S. Securities and Exchange Commission. The information on this website should not be used as the sole basis of any investment decisions, nor is it intended to be used as advice with respect to the advisability of investing in, purchasing or selling securities, nor should it be construed as advice designed to meet the investment needs of any particular person or entity or any specific investment situation. None of the information contained herein constitutes legal, accounting or tax advice or individually tailored investment advice. The reader assumes responsibility for conducting his/her own due diligence and assumes full responsibility of any investment decisions.