Full Cycle Case Study - Fox Pointe
- 120 Units in Columbus, Indiana
- Acquisition Date : December 2010
- Disposition Date : April 2025
- 27.33% Net IRR
- 6.56x Net Equity Multiple
- 45.10% Net Average Annual Return
The Opportunity
Fox Pointe was a 120-unit Class C LIHTC affordable housing asset that had reached the end of its compliance period. The Great Financial Crisis prevented the sellers from refinancing their mortgage, and they were in default. Piping Rock purchased Fox Pointe with committed, non-recourse bank financing well below replacement cost.
The Execution
Piping Rock obtained non-recourse bank financing in a joint venture with a sophisticated family office equity partner. After closing, Piping Rock then completed over $1 million in upgrades and improvements within the first twelve months. All roofing and siding was replaced property-wide, the clubhouse was fully remodeled, and we upgraded the apartment interiors with new appliances, cabinetry, countertops, flooring, and lighting.
Within five years of closing, we had grown rental income by nearly 35%, and we increased NOI by almost 70%.
Six years after closing, we refinanced the property, and the proceeds were sufficient to return 100% of initial capital, satisfy the Preferred Return, and produce a 21% net IRR.
In 2023, we refinanced the property once again, returning another multiple of capital to investors and further de-risking the asset. Ultimately, we sold the property in 2025, producing a 27.33% net IRR and a 6.56x net equity multiple.
The Lesson
Our original business plan was to use long term 223(f) HUD that fully amortized to zero over 35 years to de-risk the investment and hold long term. However, this market proved to be even stronger than we thought, and NOI grew even faster than forecast. This investment affirmed our thesis that the Midwest offers pockets of growth that can rival the growth in more popular Sunbelt markets, yet these Midwest assets can be purchased at a significant discount to their Sunbelt peers with more than ample liquidity for a successful exit.
Clubhouse Prior to Remodel
Kitchen Before Remodel
Clubhouse After Remodel
Kitchen After Remodel
