Overview

The Union-Grove Apartments (the “Property”) is a 36-unit apartment community built in 1970 and located in Methuen, MA (Essex County). The Property is conveniently located close to the downtown district of Methuen and just minutes to the NH border. The Property is being purchased by Arrowpoint Union-Grove, LLC (the “Company”) for $3,940,000. The acquisition price includes a $50,000 credit from Seller due at closing. This will reduce the net effective purchase price to $3,890,000. The credit will be used in full toward the replacement of a retaining wall on the Property. The Company is seeking $1,200,000 in common equity that will be used to acquire, renovate and operate the Property. The apartment complex attracts a host of middle class workers who typically have a workplace less than 20 miles from their residence. This type of tenant and property is consistent with Arrowpoint’s current portfolio and one that the Company is most familiar with. Off-Market Transaction-The Property, although listed with a real estate broker was never offered on the open market. Arrowpoint had recently sold a property with this broker that closed in December of 2017. Because of the existing relationship with the broker, Arrowpoint was afforded the opportunity to negotiate prior to other buyers viewing the Property. Arrowpoint feels they are purchasing the Property significantly below replacement cost. All of Arrowpoint’s prior acquisitions have also been purchased off-market and is their preferred manner in which to acquire properties. Value-Add Opportunity-This investment represents an excellent opportunity to create additional value through interior and exterior renovations. It is evident to Arrowpoint that the Property has been mismanaged for several years as the current owner has not made any improvements to units and has kept the rents well below market, essentially “bleeding” the Property for cash flow. Arrowpoint intends to implement its proven “value-add” strategy that will turn the Property around, increase revenues and create very attractive returns for investors.