Overview
Makley Place is a recently delivered, six-story Class A mixed-use asset at 210 West 5th Avenue in Columbus, Ohio (43201), comprising 140 studio/one-/two-bedroom residential units across ~102,768 NRSF, three ground-floor commercial suites totaling ~6,128 NRSF, and 111 parking spaces on a 1.178-acre infill parcel; the amenity package (clubhouse, fitness center, business center, secured bicycle storage) targets the OSU-adjacent renter cohort. Sited ~2.5 miles north of the Columbus CBD and proximate to The Ohio State University (Franklin County's largest employer, with a ~$6.8B endowment), alongside the State of Ohio and JPMorgan Chase employment bases, the submarket draws on a deep, demographically resilient renter pool spanning university, healthcare, public-administration, and an expanding technology footprint (Battelle, regional semiconductor investment). The asset carries a City of Columbus Community Reinvestment Area agreement abating 100% of the assessed-value increment for 15 years from certificate of occupancy in exchange for 28 income-restricted units (14 at <=80% AMI, 14 at <=100% AMI). The operating thesis is stabilization-and-optimization: closing the ~260 bp gap between in-place (91.4%) and stabilized (94%) occupancy and layering two new ancillary revenue lines (a furnished corporate-rental program on five units via Landing/AMG and a Lloyd's-backed Resident Protection Plan netting ~$11/unit/month) under a Sponsor-affiliated master-lease structure financed with fixed-rate, interest-only Freddie Mac debt.
Highlights
The Community Reinvestment Area abatement is the single most consequential structural advantage: shielding 100% of the assessed-value increment from real property taxation for 15 years post-CO compresses the asset's largest non-controllable expense during the early-to-mid hold, evidenced by modeled property taxes holding near $49,000-$53,000 through Year 6 before stepping toward $163,000 by Year 10 as the benefit phases out. The 28-unit affordable set-aside (20% of unit count) is the consideration for that shield, but at <=80%/<=100% AMI bands in a supply-constrained, OSU-driven submarket the effective rent give-up is modest relative to the tax savings captured, producing an NOI uplift the Colliers appraisal explicitly capitalized into $3.75M of the $39.1M as-is value.
Submarket positioning rests on a quasi-captive demand base: proximity to a 1,764-acre OSU main campus with a large, perennially renewing student and graduate-employee population yields structurally low demand elasticity and durable absorption, while the intact, walkable urban fabric of near-north Columbus and constrained infill land supply elevate replacement-cost barriers to competing product. Franklin County's employer diversification across education, state government, healthcare, financial services (JPMorgan Chase), and a growing R&D/technology cluster (Battelle) dampens single-sector cyclicality, lending support to the 2.4%-3.0% forward rent-growth assumptions.
The financing is a defensive feature in the current rate regime: a $23,684,000 Freddie Mac Conventional Fixed Rate Program loan at a fixed 5.44% for the full ~10-year term (maturing September 1, 2035), fully interest-only with zero scheduled amortization, maximizes current distributable cash and eliminates the floating-rate and cap-renewal exposure that has impaired peer 2021-2023 vintage syndications. A $473,680 interest-rate buydown was funded at closing to achieve the coupon, and the Actual/360 convention is reflected in the ~$1.31M annual debt service, generating a Year 1 DSCR of 1.75x that expands to 2.10x by the terminal year as NOI grows against a static interest burden.
The three ground-floor commercial suites provide diversified, expense-recovering income, with tenants reimbursing their proportionate share of operating expenses, taxes, and maintenance, insulating residential cash flow from commercial cost inflation. Lease laddering is favorable: Kida House (1,945 SF) carries a long initial term to 6/30/2035 with escalations from $47,128 to $58,954 and three five-year renewal options, while Sweetly Bronzed (2,089 SF) runs to 10/31/2029 stepping to $46,906; the small commercial footprint (~6% of NRSF) limits retail-specific downside while preserving mixed-use placemaking value.
The Supplement-introduced revenue overlay is a low-capex margin enhancement: the Landing/AMG furnished corporate-rental program targets premium, higher-turnover rents on five units with limited owner capital outlay, supported by Columbus comparables generating $93,000-$105,000 of incremental owner revenue at four-to-five-unit deployments, while the Lloyd's-backed Resident Protection Plan converts a renters-insurance line into ~$11/unit/month of high-margin income with a damage-waiver benefit that also mitigates uncollected-damage leakage. Both initiatives front-load into Master Lease Year 1 with a true-up/special-distribution mechanic, accelerating the distribution ramp independent of base-rent growth.
Analysis
Insights
The risk-adjusted profile is that of a stabilized-core multifamily asset wrapped in a tax-advantaged DST with a modest operational-optimization overlay, appropriately Core-Plus rather than Core given residual lease-up and unseasoned ancillary revenue. Leverage economics are roughly neutral: a Year 1 NOI yield of ~5.85% on appraised value and ~6.00% on purchase price against a 5.44% fixed cost of debt implies a thin but positive going-in spread that improves as NOI compounds against static interest. The defining tension is temporal: the underwriting back-loads returns (distributions ramping 4.52%-5.77%, DSCR 1.75x-2.10x) as the tax abatement decays and an interest-only balloon matures, leaving terminal value highly sensitive to the 2034-2035 exit pricing and rate environment. Forward rent-growth assumptions of 2.4%-3.0% are defensible against Columbus's demographic and employment trajectory, but the incremental revenue from the five-unit Landing program and the resident-insurance line, while plausibly supported by third-party comparables, is not yet demonstrated at this property and represents the principal upside-case dependency. The optional Section 721 exit affords a potential tax-deferred liquidity path beyond a straight third-party sale, though it remains discretionary to the Administrative Trustee and unquantified.
Advantages
On a micro level, the offering pairs a recently delivered, amenitized Class A asset in a high-barrier, OSU-anchored Columbus submarket with a 15-year CRA tax abatement that structurally suppresses the property's largest non-controllable expense and was directly capitalized into the third-party appraisal. The capital structure is conservative and rate-insulated (fixed 5.44% fully interest-only Freddie Mac debt for the full term with no amortization and no cap-renewal risk), producing a 1.75x going-in DSCR widening to 2.10x against a 52.64% debt-to-total-capitalization ratio. Income is diversified across 140 residential units and three expense-recovering commercial suites with laddered expirations, and the furnished-rental and resident-insurance programs add low-capex ancillary margin. Macro support includes Columbus's above-trend population growth, employer diversification across education, government, healthcare, finance, and an expanding technology base, and a prevailing market pricing that frames the in-place basis reasonably against comparable stabilized product.
Concerns
Asset-specific vulnerabilities concentrate around the abatement, the maturity, and the income waterfall. The CRA abatement burns off on a schedule that drives modeled property taxes from roughly $49,000 to $163,000 by Year 10 and ~$208,000 thereafter, compressing terminal NOI precisely as a sale or refinance must occur; the benefit is also conditional on continuous compliance with the 28-unit affordable set-aside, with a clawback of 20%-90% of abated tax payable to the City's Affordable Housing Trust on any shortfall. Because the loan is 100% interest-only with zero principal reduction, the entire $23,684,000 balloon matures 9/1/2035, concentrating refinance/disposition risk into an unknowable rate environment with no amortization cushion. The distribution profile depends on a multi-tier Additional Rent/Bonus Rent breakpoint waterfall routed through a thinly capitalized Sponsor-affiliated Master Tenant (where only 85% of cash above the bonus breakpoint accrues to the Trust) and lumpy DST CapX reserve draws (~$355,000 in Year 4, ~$303,000 in Year 7, ~$594,000 in Year 10) episodically depress distributable cash. Execution risk attaches to the unseasoned Landing/AMG program (36.5% management fee, early-termination fees up to $2,500/unit on sale, and platform fees payable while AMG units sit vacant) and to closing the ~260 bp lease-up gap to stabilized occupancy. The near-north Columbus pipeline of recently delivered Class A product (single comparables of 319,562 SF and 274,000 SF) pressures concessions and rent growth, and the Sweetly Bronzed commercial lease rolls mid-hold in 2029.
