Investment Offering | 89 East Apartments, Tulsa, OK
89 East Apartments, Due Dillgence | HLC Equity CEO
Watch HLC Equity CEO Daniel Farber on-site in Tulsa as he shares insights from due diligence at 89 East Apartments, a potential multifamily acquisition currently under review. Learn what attracted HLC Equity to the opportunity, from its strong South Tulsa location and discounted basis to long-term assumable financing and conservative underwriting.Download the full deck, fill in the form below:
89 East Apartments FAQ
- 89 East Apartments is a 240-unit, 1997-vintage garden-style multifamily community located at 7218 S 89th East Ave in the South Tulsa submarket of Tulsa, Oklahoma. The property sits on approximately 9.4 acres across 10 three-story residential buildings with a centralized leasing office, and features an average unit size of approximately 919 square feet. HLC Equity is acquiring the property at a purchase price of $19 million, representing a roughly 50% discount to peak-cycle comparable sales in the submarket.
- The investment targets an 18%+ IRR, a 2.5x+ equity multiple, and 9%+ cash-on-cash returns over a seven-year hold period, with a 6.50% Year-1 cap rate. Based on the current underwriting model, projected net LP returns are a 19.3% IRR, a 2.9x equity multiple, and an average cash-on-cash return of 10.6%. All projected LP returns are net of sponsor fees. These are projections based on conservative assumptions and are not guaranteed.
- The property offers three floor plan types across 240 total units: 72 one-bedroom/one-bathroom units (ranging from 50% AMI-restricted to market-rate), 144 two-bedroom/two-bathroom units, and 24 three-bedroom/three-bathroom units. Of the total, 122 units are market-rate, 94 are restricted at 60% AMI, and 24 are restricted at 50% AMI. Partial rent restrictions expire in January 2038 — approximately four years beyond the projected sale date — preserving meaningful upside for future rent growth and exit cap rate positioning.
- The offering accommodates LP investors at multiple commitment levels. The deal deck illustrates projected returns at $250,000, $500,000, and $1,000,000 equity investment tiers. Prospective investors should contact HLC Equity’s investor relations team at ir@hlcequity.com for minimum investment requirements and to obtain the formal Offering Documents.
- Yes. LP investors participate as limited partners and have no day-to-day management responsibilities. HLC Equity serves as the General Partner and handles all acquisition, asset management, capital improvement, leasing oversight, and disposition activities on behalf of investors. This is a passive, real estate private equity investment structure.
- Yes. HLC Equity accommodates investments through various entity structures including LLCs, LPs, Trusts, and self-directed IRAs. Investors should consult with their legal and tax advisors regarding the most appropriate structure for their individual circumstances and confirm eligibility requirements directly with HLC Equity’s investor relations team.
- Yes. As an LP investor, you hold a direct ownership interest in the entity that acquires the property. This means you benefit from real estate ownership — including potential cash flow distributions, appreciation, and tax benefits — without the responsibilities of active management. Your economic interest is proportionate to your equity contribution relative to the total LP equity raised.
- HLC Equity provides investors with in-depth and frequent communications that offer a clear ongoing picture of property performance. Investors receive regular reporting on financials, occupancy, capital improvements, and overall asset progress. Distributions are structured on a semi-annual basis throughout the seven-year hold period.
- No. Projected returns are forward-looking estimates based on conservative underwriting assumptions, not guarantees. HLC Equity’s model stress-tests projections by underwriting operating expenses more than 30% above comparable properties in the market, rents approximately 20% below nearby rent comps, and applying a conservative terminal cap rate. While the return profile is supported by durable cash flow and a strong going-in basis, all real estate investments carry risk. Investors should review the full Offering Documents, including risk factors, before committing capital.
- Yes. HLC Equity’s investor community includes family offices, wealth management firms, private equity firms, and high-net-worth and ultra-high-net-worth individuals. The firm was founded within a family office and has built its co-investment platform to serve institutional-quality investors seeking thoughtfully structured, high-quality real estate opportunities. For advisor access and white-glove onboarding, contact ir@hlcequity.com.
- Yes. HLC Equity’s investor community includes family offices, wealth management firms, private equity firms, and high-net-worth and ultra-high-net-worth individuals. The firm was founded within a family office and has built its co-investment platform to serve institutional-quality investors seeking thoughtfully structured, high-quality real estate opportunities. For advisor access and white-glove onboarding, contact ir@hlcequity.com.
- The property benefits from an accretive, assumable HUD loan with a 2.26% fixed interest rate, approximately 70% loan-to-purchase-price, more than 30 years of remaining loan term, and a Mortgage Insurance Premium (MIP) of approximately 0.25% per annum. The loan can be paid off early without a prepayment penalty. This below-market, long-duration fixed-rate debt provides significant downside protection and supports strong cash-on-cash returns from Day 1.
- Cash flows are distributed through a three-tier waterfall: Tier 1 provides an 8% preferred return to LP investors. Tier 2 distributes cash above the preferred return 70% to LPs and 30% to the GP. Tier 3, triggered once LP investors achieve a 16% IRR, splits remaining profits 50/50 between LPs and the GP. Projected LP returns are net of all sponsor fees, including a 1% acquisition fee, 1% disposition fee, 0.25% asset management fee (on total equity), and a 10% construction management fee on total CapEx.
- The underwriting for 89 East is intentionally conservative across multiple dimensions. Rent growth is modeled at 0% in Year 1 and 3% per annum thereafter — well below the actual rent gap, which shows 89 East currently trading approximately 20% below comparable properties. Operating expenses are underwritten more than 30% above the average of six comparable properties in the submarket. Economic vacancy is projected at 10.25% in Year 1, tapering to approximately 7.52% at stabilization, compared to the 6.5%–7% industry standard for stabilized assets. The terminal cap rate assumption is conservative to stress-test the exit.
- The business plan does not rely on aggressive, immediate rent increases. Instead, HLC plans to gradually burn off the current loss-to-lease over the seven-year hold as units turn. Based on rent comps, 89 East’s market-rate one-bedrooms average $147 below comparable properties, two-bedrooms trail by approximately $196, and three-bedrooms are approximately $499 below peers — with virtually identical vintage, condition, and submarket positioning. Interior unit renovations on market-rate units will support incremental rent premiums over time.
- Approximately $2.69 million in capital expenditures is budgeted for the investment. Because the property was maintained by an institutional prior owner, deferred maintenance is limited and the vast majority of CapEx dollars can be directed toward interior unit renovations on the 122 market-rate units. This targeted approach allows HLC to drive net rental income growth with a focused spend rather than spreading capital across building systems or major structural work.
- Year 1 Net Operating Income (NOI) is projected at approximately $1.3 million, growing to approximately $2.4 million by Year 7, representing an 86% increase driven by rent growth, loss-to-lease burndown, ancillary income from washer/dryer installation fees, and a phased bulk internet/cable income program. Replacement reserves of $300 per unit per year are included in the projections.
- Tulsa is Oklahoma’s second-largest city with a population exceeding one million. The metro has meaningfully diversified from its historic oil and gas base, with major employment sectors now spanning healthcare, finance, aviation, telecommunications, and technology. The Tulsa MSA’s unemployment rate stands at 3.3%, outperforming the national average of 4.2% (Bureau of Labor Statistics), and the metro’s annual GDP is approximately $68 billion (U.S. Bureau of Economic Analysis). These fundamentals support durable residential demand across the market.
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