Investment Overview

Esperanza is a 71-unit community located on the hard corner of Esperanza Drive and major thoroughfare Spring Valley Road in North Dallas on the border of Richardson, an affluent suburb. This location receives 35,000 cars per day and benefits from strong visibility and also offers easy access to Highway-75/Central Expressway and Interstate-635, two of the most important highways in DFW. Residents enjoy proximity to dense retail and dining options and massive employment centers like the Telecom Corridor (130k employees) and Texas Instruments Headquarters. Esperanza is highly sought after by family oriented tenants as it resides in Richardson-ISD and sits next door to Carolyn Bukhair Elementary School while possessing large floorplans averaging 860 square feet with 60 percent being two or three bedroom floorplans. This submarket has seen rent growth exceed 10 percent in 2022 and Costar projects an additional 5 percent of rent growth in 2023 per Costar. The subject property was built in 1964 and consists of nine buildings which are comprised of brick veneer & siding exteriors with pitched roofs on pier and beam foundations. The property has individual HVACs, all of which are new as of 2021, and is sub-metered for electricity. The property has laundry facilities onsite and are owned by the property with no lease in place. Additionally, new ownership signed and has begun implementing a cable contract in 2023 that provides two set boxes to all tenants and creates additional revenue of $69/unit/month for the owner. The property has undergone a large renovation, mostly exterior, of $1.25 million ($17,606/unit) since 2020 that included the aforementioned all-new HVACs, new siding, amenity upgrades and interior renovations on 50 percent of the units with average premiums of $215 per month. Esperanza offers a new owner the opportunity to acquire a highly visible property in a strong rental market next door to an elementary school with all new HVACs and enjoy cash flow from day-one of ownership. There is compelling rental upside available based on nearby competitors. The renovated and non-renovated units at Esperanza fall behind nearly every other property in the rent stack, as seen in the case study on pages 12-14 of this memorandum. Additional revenue growth will be enjoyed by new ownership as cable income of $69/unit/month and new valet trash income of $21/unit/month continue to percolate through new leases. Esperanza is being offered free & clear of existing debt allowing for predictable agency debt to be placed with positive leverage.