Myrtle Landing Townhomes, 144 Units, Wilmington, NC
How We Got It
We bought Myrtle from the same brokerage house with whom we closed 5 prior acquisitions. The price per pound was obscene and we refused to tour it for that reason but got looped into a tour when our scheduled freed up while in Wilmington. The asset was financed with a Fannie Mae pre-stabilization mortgage as the acquisition was closed during lease-up in early 2018. It was a tax-free reverse exchange for an asset that had yet to be sold in Olathe, Kansas. As a result, the syndicate was required to fund the acquisition of Myrtle before the sale of the Kansas asset which came off without a hitch owing to the sophistication, loyalty and capability of the Spyglass investor syndicate. Investment Rationale
Myrtle is a low-density cottage home development near the MSA’s best beaches. The property boasts only 2 units per acre with units situated in adorable cottage style structures that house only 3 units each. The homey curb appeal has been enhanced by a major overhaul to the amenity package and landscaping. Myrtle is now positioned as one of the area’s most appealing for pet owners, young families and retirees who all enjoy the direct-entry, single-level oversized units with top-of-the-line finishes.
Results The property received designation from J Turner as a top 25 community in the nation (2020) and North Carolina’s best property (April 2021). The property qualified for a Supplemental Loan in July of 2021 representing about 50% of investor capital. And the property experienced ~50% of appreciation from April 2018 to August 2021 (based on a lender appraisal). It’s was originally intended to be a long-term hold because we love the asset and Wilmington, but the supply outlook turned worse and we decided to monetize the asset in December 2023, and realized a 17.8% net IRR and a 1.88x multiple on invested capital (after exit costs and after the sponsor promote).