Las Vegas, NV

Realized Deal : Winsome West Multifamily

Sponsored By Henley USA

Risk Profile
Value-Add
Amount Invested
$1,300,000
Targeted IRR
16.4%
Actual IRR*
23.5%
Targeted Equity Multiple
2.1x
Actual Equity Multiple*
1.5x
Targeted Hold Period
5.0 years
Actual Hold Period
1.9 years

In March 2018, Henley USA launched an offering for a 228-unit apartment community in the Las Vegas submarket, with an intent to reposition the property from Class C to Class B. Henley USA sourced the transaction off-market through the seller who had owned the asset for over 25 years.

The business plan called for a deep value-add program that included investing $10,500 per unit, renovating unit interiors and exteriors, improving the common areas (clubhouse facilities, fitness center, landscaping, laundry room, etc.), hiring an institutional-quality property manager, and implementing utility reimbursement collection on all units, often referred to as RUBS, or Ratio Utility Billing System.

Project Timeline

Strong Start

June 2018

In the first quarter of ownership, renovated units were in high demand and being pre-leased before completion. Henley USA also reported being able to capture RUBS earlier than anticipated.

Exterior and Common Area Improvements Completed

September 2019

By Q3 2019, essentially all capital construction was completed and occupancy was at 94%. Property improvements included upgrades to the leasing office, fitness center, new roofs, and more, all of which were well received by the tenants. Even during heavier renovation months, the property was able to achieve occupancy of 90% or greater. Henley USA began considering an early sale in 2020.

Early Exit

March 2020

By Q4 2019, the property was under contract and it officially sold in March 2020. At the time of sale, Henley USA had renovated approximately 113 units (~50%), leaving upside for the future owners. Over the hold period, rents for the renovated units saw increases of approximately 25%. Perhaps more impressively, non-renovated units were released at market rates achieving rents increases close to 20% (including RUBS).

Final Outcome

High rental demand and favorable submarket conditions created the opportunity for Henley USA to successfully execute the business plan and exit the investment approximately three years earlier than planned, achieving a higher-than-projected IRR for investors due, in part, to the early exit.

*Net of fees.

This report contains explanations of a series of events associated with Henley USA’s Winsome West Multifamily offering that resulted in an approximate 50% (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.

CrowdStreet makes no representation or warranty, express or implied, in relation to the fairness, accuracy, correctness, completeness, or reliability of the information contained in this report. CrowdStreet does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it.

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