Current Offering:
The CAP Plus Diversified Income Fund
Designed to Deliver Significant Cash Yields & Competitive Long-term Total Returns From Strategic
Property Investments in Select Value & Growth Markets
Pax has developed a system that focuses on the three key elements we can control: Cash Flow,
Amortization and Positive Leverage. These are the “CAP” factors. We also aim to reduce risk by staying
close to replacement cost, buying in value and growth markets, and working diligently on operations
and marketing to maximize the performance of each asset. These are the “Plus” factors referred to in
the fund’s name.
The fund will invest primarily in apartment communities. Yet, it will also pursue other types of income-
producing properties that are selling at significant discounts due to special circumstances.
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Targeted Fund Returns
Cash-On-Cash Yield (Initial)
6.0% – 8.0%
Cash-On-Cash Yield (Stabilized)
8.5 - 10.5%
Target IRR
16.0 - 18.0%
Equity Multiple
2.3 - 2.7x
The CAP Plus Diversified Income Fund
Pax Properties CAP Plus Diversified Income Fund has and will primarily acquire Class B and Class C multifamily assets with the opportunity to increase value through the successful execution of our proven business plan.
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The Fund will diversify across geographies and focus on existing multifamily assets but will entertain other commercial assets that are well below replacement value, are in growth and value markets, and present tremendous upside potential.
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The Fund will target IRRs of 16.0-18.0%, initial 6.0% – 8.0% cash-on-cash yield in the first two years increasing to 8.5 - 10.5% as the assets are stabilized and a 2.3 - 2.7x equity multiple.
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Pax Properties is an experienced sponsor with a proven business plan. The principals at Pax Properties have more than 20-years of experience in our target real estate markets, with over $125 million in transactions. Pax Properties has previously executed the same business plan for multiple other properties.
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The fund anticipates acquiring 8-12 properties over the investment period of 3-7 years. The Fund will acquire underperforming properties and seek to increase NOI by increasing rents through strategic interior and exterior renovations, repositioning and rebranding of the properties, and hands-on management. We are able to accomplish this through our vertically integrated company and competitive advantage by having in-house acquisition, project management, property management, and construction teams.
The Fund is Light on Fees
The Cap Plus Diversified Income Fund charges a one-time fee on acquisitions capped at 1% of the total deal cost. For asset management, Pax charges 0.65% (sixty-five basis points) on assets under management. To our knowledge this may be the lowest fee in the entire industry.
Pax Properties does not charge any fees for financing the deal, refinancing, disposition of the asset, forming the entity, administration, travel, or other miscellaneous fees.
As for profit-share, the first 100% of the return goes toward the cumulative preferred return of 7%. The next 100% will go toward investors' return of capital.
