Investment Criteria
Product Type
Multifamily properties, both apartments and condominiums. Both ground-up construction and value-add acquisition opportunities (e.g., apartment rehabilitation).
Structure
A joint venture arrangement (e.g., partnership agreement) utilizing third-party senior debt. Overland usually places its capital as pari-passu equity without priority of return.
Equity Investment
$3 million to $20 million per transaction. Typical deal has all-in costs of between $15 million and $100 million.
Term
Typically 2 to 3 year holding period for ground-up apartment or condominium construction projects. Usually 3 to 5 year holding period for value-add apartment acquisition deals.
Capital Participants
Typically a single senior lender will provide a 70% to 85% LTC loan. Overland will contribute 80% to 95% of the required equity amount. The sponsor-developer will contribute the remainder in the form of cash and/or the subject land.
Minimum Target Return
Flexible. Preferred returns, developer promote, IRR thresholds and other deal characteristics vary depending upon the transaction risks and amount of partner equity.
Underwriting Fee
4% of Overland’s equity investment amount.
Asset Management Fee
0.15% to 0.20% (of total project cost) per annum, paid monthly.
Geographic Area
Major markets in the United States. Prefer submarkets with higher geographic and governmental barriers to entry.
Sponsor Characteristics
Strong local presence. Multifamily industry specialization; experience as developer and/or investor of multifamily properties. Track record of having successfully and recently carried out comparable business plans as a development or operating principal.
