The Radcliff
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Built in 1962, offer secure and conveniently located living in central Las Vegas with studio, one-bedroom, and two-bedroom floor plans near the iconic Strip on 0.68 acres.
units
22
Location
Las Vegas, NV
Category
Value-add
Dev began
Dev Complete
Status
Sold
Type
MOIC
1.59
%$ Return at refi
% IRR
20.5
Case Study · Workforce Housing
The Radcliff Apartments
22 units in central Las Vegas, Nevada. Acquired January 2021, sold December 2023.
The Property
Built in 1962, The Radcliff is a single garden-style building with studio, one-bedroom and two-bedroom floor plans arranged around a gated courtyard that gives residents a real sense of security.
The community sits on 0.68 acres in central Las Vegas, just blocks from the Strip. Residents have easy access to public transportation, including bus stops and the Las Vegas Monorail, which serves several Strip resorts and a major employment base.
Housing Those Who Served
Master leased to U.S. Vets
The entire property is master leased to U.S. Vets, the nation's largest nonprofit provider of comprehensive services to homeless and at-risk veterans. U.S. Vets is a creditworthy tenant funded by the U.S. Department of Veterans Affairs, the United Way and multiple municipal governments.
This is the double bottom line at work: a stable, mission-driven tenant providing housing for veterans, and a dependable income stream for our investors.
01 · The Opportunity
An off-market deal with below-market rent
The Radcliff was never listed or marketed. It came to us off-market through a broker with whom we had already closed four transactions.
The U.S. Vets lease was a three-year term with slightly less than two years remaining, and it had been renewed at below-market rates. Nonprofit housing providers had received significant subsidy increases, while this property's rent had grown far more slowly under the previous owner. We underwrote a rent increase of at least 18.5 percent at renewal.
Because the property was in good condition, we budgeted only $35,000 for renovations.
02 · The Acquisition
Capital structure
03 · Execution
Negotiating the lease renewal
Under the master lease, U.S. Vets handled day-to-day operations, so our central task was renegotiating the lease at renewal.
Shortly after we closed, HUD announced rent subsidy increases of more than 10 percent nationally to help the voucher program keep pace with private-market rents, expand the number of affordable units and help more families rent homes at an affordable cost.
We proposed a 24 percent increase and ultimately agreed on 21 percent, well above our 18.5 percent underwriting.
04 · The Sale
Sold for $2.59 million in December 2023
Investors received a 6 percent preferred return paid monthly from day one, annual bonus dividends and, at the sale, a return of capital plus profit. Over a hold of less than three years, that produced a 1.59x total return, or a 20.5 percent IRR.
CVG's principals personally guaranteed the loan and handled asset management so our investors could remain fully passive. Investors may also have received tax benefits depending on their individual situations.
How It Compares
What $100 became
January 29, 2021 to December 12, 2023, including reinvested dividends for the S&P 500.
Doing good while doing well
Camino Verde Group invests in workforce and attainable housing in secondary and tertiary markets. Learn about current and future investment opportunities.
Investment Disclaimers
At Camino Verde Group, we are committed to providing transparent and accurate information about our real estate investment opportunities. Please review the following before making any investment decision.
Risk. All investments involve inherent risks, including the potential loss of principal. Past performance is not indicative of future results. Investors should understand the risks of real estate investments and consider their risk tolerance before investing.
Diversification. Diversification is important for managing risk. Investors should consider diversifying across asset classes to reduce overall risk exposure.
Liquidity. Real estate investments are typically illiquid and usually have restrictions on redemption. Investors should be prepared to hold for an extended period and consider the impact of illiquidity on their financial goals.
Regulatory compliance. Camino Verde Group operates in compliance with applicable laws and regulations governing real estate investments. Investors should understand the regulatory environment and its potential impact on their investment.
If you have questions or would like further clarification, please contact us.
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