We purchased the property in June 2020 during the most uncertain period of the COVID-19 pandemic. Despite precarious conditions, our key decision-makers elected to travel to the property to conduct due diligence. Our property management team took extraordinary precautions to ensure the safety of all property residents and staff, including wearing full personal protective equipment (PPE).
While most of our competitors were paralyzed with fear during this time, our long-term conviction in the multifamily space and in DFW enabled us to strike a deal to purchase the property for a 5% cap rate – roughly 50 bps higher than what garden-style value-add properties were selling for in DFW just prior to the onset of COVID.
In February of 2022, 20 months after acquisition, we added a supplemental loan behind the first mortgage which resulted in the return of 21% of investor capital plus an additional $1.5 million of proceeds for additional capital improvements. Both the size of the supplemental loan and the dollar amount of the return of capital, fewer than two years after acquisition, significantly exceeded our proforma projections.
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