Equity Investment Performance Summary: 18.9% IRR, and a 2x equity multiple in a little over 4 years.
NOTA is a 30-unit, market-rate apartment community in the east Portland community of Mt Tabor, consisting of 12 1-Bedroom units and 18 2-bedroom townhouse style units. The 14,000 square foot lot was previously a surface parking lot and commercial building.
Development – Edge Development finalized negotiations to purchase the lot in August of 2018 for $1,470,000, or $105/SF. After 9-months of in-house design, entitlement and permitting, Edge closed on the land purchase in May of 2019.
Construction – Edge Development acted as the General Contractor and started construction in June of 2019 and finished on schedule 12 months later in June of 2020 (while COVID was just starting to slow things down).
Management – Leasing began in June of 2020, during the middle of a pandemic, and Edge Asset Management still managed to get tours and leases out to market. Leasing was expectedly slow due to the pandemic restrictions, but stabilization was still achieved by April of 2021. Edge Asset Management also maintains management duties with the new Owner.
Sale – Edge Development decided to test the market by putting the property up for sale in December of 2021. After a very patient sales process, and a declining market with rising interest rates, our sales team was successful in finding a local family buyer, closing the purchase transaction in October of 2023, for $8.2M, or $343 per square foot. In a market where average cap rates are in the mid-to-high 5% range, our sale closed with a stabilized T12 NOI equating to a 4.9% cap rate, which might have been one of the very few sales in Portland in 2023 to achieve such a metric. The overall project still produced an 18.9% IRR and a 2x multiple, in likely one of the most challenging sales markets we have seen in the past 15-20 years.