The Benton: Class-A Multifamily Near Walmart HQ

The Benton is a 150-unit, Class A, new construction multifamily development located in Pea Ridge, Arkansas, minutes away from the new Walmart headquarters. This stabilized asset boasts attractive projected returns with full COO secured prior to close.

Key Investment Features:

• Location: 200 Ryan Road, Pea Ridge, AR 72751
• Units: 150 (75 one-bed/one-bath, 75 two-bed/two-bath)
• Construction: 2024, Wood-frame
• Current Occupancy: 20%

Investment Strategy: Acquire the property in late 2024, implement a comprehensive lease-up program, and stabilize the asset by 2026, enhancing its value and generating strong returns for investors.

HPP Equity focuses on identifying and capitalizing on real estate opportunities in single-family homes and mid-size apartment communities within carefully selected markets. Through acquisition, redevelopment, or stabilization, we strive to maximize profitability.

For stable properties, we enhance income through capital improvements, optimized management, and greater efficiency. In development projects, our local rezoning expertise unlocks the potential of underutilized properties.

Our mission is to build thriving communities while providing strong, consistent returns for our investors.

HPP Equity Background

HPP Equity ("HPP") is a regional investment management firm specializing in acquiring and optimizing strategic real estate assets. Since 2019, HPP has created opportunities in Single Family Rentals (SFR), Student Housing, and Multi-Family portfolios.

HPP oversees $150M in assets under management (AUM) and partners with specialized property managers to provide comprehensive performance oversight. Our assets include nearly 1,000 student beds, 450 SFR/Multi-Family units in Indiana, and 195 units near the University of Arkansas. We continue to pursue acquisitions in high-growth regions like Fayetteville and Bentonville, Arkansas.

With over $80M in debt financing sourced and $25M in capital deployed, HPP leverages a broad capital stack. We aim to achieve $250M in AUM and $26M in annual rental revenue by 2026.

HPP Equity has a proven track record of success in real estate acquisition, development, and management. Here are some of our completed and current projects:

SB191 Holdings LLC: Purchased in January 2019 for $10.5M with a $1.4M CapEx budget. Projected portfolio valuation of $15M by 2027. Full LP Capital of $2.5M returned in October 2020. Refinanced in July 2022 with $1M distributed to members.

IG Holdings LLC (4 Entities): 2022 acquisition of 640 beds for $30M. $9.5M LP Capital and $28M in debt. $6M capital improvements budget. T12 Revenue: $4.4M, T12 NOI: $1.9M. 2025 Projected Revenue: $6.8M, 2025 Projected NOI: $3.4M. Estimated portfolio value of $60M at a 5.5 Cap or $90k per bed.

SB201 Holdings LLC: Purchased for $6.1M on 9/30/2020 with a $550k CapEx budget. Raised $1.9M for down payment and improvements. Properties appreciated 64% by March 2023 and sold to SB231 Holdings LLC for $7.5M. Original investors now hold over 15% equity in SB231 Holdings LLC.

• Purchase Agreement: Fully executed PSA for $24.80M with $250,000 earnest money, closing scheduled for mid-January 2025.
• Lease-Up Strategy: Partnered with Lund Management to achieve full stabilization within 18 months.
• Market Advantage:
  • Superior location near Walmart HQ, Fortune 500 companies, and thriving local amenities.
  • Significant rent growth potential due to strong demand and limited supply in NWA.
• Economic Drivers: Rapid growth fueled by Walmart, JB Hunt, Tyson Foods, and the University of Arkansas.

• High Growth Market: NWA is expected to enter the top 100 MSAs, driving natural rent increases. NWA was the 18th fastest-growing metro in the U.S. in 2023, with a population increase of 2.3% from 2022 to 2023.
• Milken Institute: NWA has ranked in the top 10 Best-Performing Cities in the Milken Institute's annual list for three years in a row, most recently at number 7 in 2024. The institute attributes NWA's success to strong job growth, high-tech GDP growth, and affordable housing.
• Venture capital investments: The region has seen record-high venture capital investments. Fast Company named NWA number 2 in its top 10 metro areas for minority entrepreneurs.
• Vacancy rates: Vacancy rates in all property sectors across the region are below 10 percent (Fayetteville just hit a record-low commercial vacancy rate of 5.6 percent. This can be compared to regional neighbors Austin, Dallas, and Houston, which have commercial vacancy rates greater than 20 percent).
• Replication of Proven Success: The Principals’ experience managing 1,600+ units in Indiana sets the stage for scaling in this expanding market.
• Strategic Expansion: The Benton follows the success of Ruby on the Creek, further solidifying a foothold in NWA.

• 150-unit complex within minutes of the Walmart Corporate Office, downtown Bentonville square, Crystal Bridges, and many other excellent community amenities.
• Fully pre-stabilized new construction project with full COO before closing.
• $24.80M Purchase Price
• 20% occupancy prior to close with potential for $3.0M in leases at stabilization.

• Debt: $18.8M @ 69% LTC
• Limited Partner Capital: $8.5M
• Limited Partner Equity Share: 50%
• Preferred Return: 8% annually for Limited Partners, beginning in month 13.
• Distributions: All available distributable cash will be disbursed to Limited Partners prior to any disbursement to the General Partner.

Pro-Forma Acquisition

	Current YR1	Stabilized
Gross Potential Rent	$2,261,280	$2,722,160
Effective Gross Income	$1,377,071	$2,957,285
Total Operating Expenses	$1,012,255	$1,082,963
Net Operating Income	$364,817	$1,874,322

Returns Analysis (5-Year Projection)

LP IRR: 19.19%
LP Total Cash Flow: $15,693,370
LP Equity Multiple: 1.89x
Exit Cap Rate: 5.5%

Refinancing Strategy: We aim to refinance 100% of the initial capital within 2-3 years, with the goal of appraising the complex at $34.0M and securing a loan of around $27.5M. Anticipated NOI of $1.9M or greater, with a project valuation of $34M based on a 5.5% (New Construction) cap rate.

Return of Capital Schedule:

• 2026 - 2027: 8% Preferred return payments begin 1st quarter once occupancy hits 80%, with full principal paydown occurring in the year 3 refinance.
• Post Refi (Starting early to mid Q3 of 2027): Continued distributions based on cash flow of the property after return of all investor capital and initiation of a HUD Loan.