Development Case Study (Active Portfolio Investment)

The Opportunity

  • In Q2 2018, Loewen Langdon invested, in partnership with Cambridge Development and DeMoura Holdings, in the development of a 222-unit Class “A” apartment development located adjacent to the Downtown Savannah Historic District (“SHD”) in Savannah, GA.
  • Cambridge & DeMoura have a combined 120 years of apartment development experience having built over 15,000 units.
  • The downtown Savannah apartment market is severely lacking Class “A” product. There are less than 1,000 units of existing comparable product.
  • Strong macro market:
    • In-process: $270MM JW Marriott-anchored Riverwalk mixed-use project one mile away
    • Savannah has 4th busiest container port in the entire US.

Value-Add Strategy

  • Speculatively develop a best-in-class 222-unit Class “A” apartment complex on land with zoning & entitlements in place.
  • Loewen Langdon mandated their investment be structured as preferred equity. This limits the upside return, but also limits risk as their capital’s last dollar of capital tops out at +/-75% LTV on the land’s as-is value at the time of purchase.
  • The project will have amenities that other comparables in the downtown market do not (i.e. pool, parking garage, and full fitness center) in a quickly gentrifying area just outside the SHD.
  • The project’s business plan is to develop, lease-to-stabilization and sell the asset. The targeted hold period is 48 months.