The Dual-Path Return Profile

This is the heart of the opportunity. Belvedere is underwritten to perform under two distinct exit strategies, allowing the JV partner to elect the risk-and-duration profile that fits its mandate.

 

Path A | Merchant Sale after Stabilization, Exit 2030 (approximately a 3-year cycle)

Build, stabilize, season, and sell. On trended stabilized net operating income of roughly $4.93M a disposition at a 5.0% to 5.25% percent capitalization rate, defensible for brand-new, fully stabilized Class A product in a top demand corridor, implies a gross value of approximately $94M to $99M, or net proceeds near $92M to $97M after selling costs. Against a $70.2M basis, that realizes roughly $22M to $27M of value over a three-year build-and-sell, translating to an estimated JV equity multiple of approximately 1.8 to 2.0 times and an internal rate of return in the low-to-mid twenties. Capital is returned quickly and recycled; the spread is harvested at the moment of peak asset quality. The HUD-insured permanent loan, if placed before sale, is assumable, an increasingly valuable enhancement to a buyer in a higher-rate environment.

 

Path B | Long-Term Hold with Agency Debt, Exit 2038 (approximately10-year hold)

At stabilization the asset refinances into a HUD-insured, fully amortizing permanent loan at approximately 5.67% all-in over a 35-year amortization, locking in long-duration, below-market leverage and converting a merchant build into an institutional build-to-core hold. Held to 2037-2038 disposition at a 5.5% exit cap on forward net operating income of roughly $6.31M, the asset is valued near $113.8M, or $592,933 per unit. The base case delivers a 16.7% percent JV equity internal rate of return at a 2.8 times equity multiple, approximately $46M of limited partner profit, alongside an 18.6% percent project-level return at a 3.04 times multiple. Crucially, the return holds between roughly 16% and 17% percent across a full band of exit and timing assumptions; the long hold and locked-in agency leverage dampen the very sensitivities that unsettle most development equity.