Oxford, MS

Realized Deal : Old Taylor Road Cottages

Sponsored By Alpha Capital Partners

Risk Profile
Value-Add
Amount Invested
$1,655,000
Targeted IRR
20.8%
Actual IRR*
10.3%
Targeted Equity Multiple
2.31x
Actual Equity Multiple*
1.17x
Targeted Hold Period
5.0 years
Actual Hold Period
1.6 years

In September 2017, Alpha Capital Partners (“Alpha”) launched an offering for a 108-bed, Class A student housing townhouse property located adjacent to The University of Mississippi in Oxford, MS. At acquisition, the entire property was under a five-year master lease to the Alpha Delta chapter of Phi Mu sorority, which translated to consistent revenues at a 100% occupancy rate.

The asset was acquired with no deferred maintenance plans and Alpha expected it to immediately begin delivering strong cash-on-cash returns for investors. Alpha had recently invested in another asset in the Oxford area and believed this would help increase efficiencies with economies of scale at Old Taylor Road Cottages. Furthermore, Alpha’s business plan called for renegotiating the terms of the master lease in Year 3 and subsequently exploring exit options in Years 4-5.

Project Timeline

Performing As Expected

June 2018

Approximately eight months after the acquisition was completed, the property continued to perform as expected, allowing Alpha to make quarterly distributions to investors at an annualized rate of 8%.

Stable Performance Continues

December 2018

Steady income yield continued to reflect the stable nature of the asset under the master lease agreement. Although the third quarter experienced higher expenses consistent with annual student housing turnover, Alpha was able to continue making distributions yielding an 8% annualized rate.

Early Sale

April 2019

Alpha informed investors that an opportunity to exit had presented itself at a prime point in relation to both the market cycle and the property’s business cycle. The disposition was completed in late April 2019 to a motivated buyer seeking a tax deferred exchange strategy at what Alpha believed were favorable deal terms and an attractive valuation.

Final Outcome

The asset’s proximity to the University of Mississippi campus, as well as the stability provided by the in-place master lease agreement, allowed Alpha to take advantage of an opportunistic early exit to a motivated buyer, although achieving lower-than-projected returns for investors.

*Net of fees.

This report contains explanations of a series of events associated with Alpha Capital Partners’ Old Taylor Road Cottages offering that resulted in an approximate 17% (net of fees) absolute return on original equity to investors (including those from the CrowdStreet Marketplace). Certain aspects of the report such as dates of major events and the final outcome are easily verifiable while others, particularly underlying reasons behind the sponsor’s business plan execution, are not. 

The report partially relies upon the sponsor’s explanations, the information contained within sponsor-produced quarterly reports, and conference calls. This analysis is not an assertion of independently verified facts but, rather, is for informational purposes only, to convey CrowdStreet’s understanding of what transpired.

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