Panther's focus on opportunities in the Southeastern United States led the firm's research to the Nashville, Tennessee area. In 2011, the Nashville MSA possessed growth characteristics Panther believed would support strong, sustainable fundamentals in the multifamily real estate market. However, as a high-growth but less developed region, there were few if any acquisition opportunities that met Panther's criteria. If Panther was to participate in the market, it would have to extend its business model from value-based acquisitions to include ground-up development opportunities.
The movement into property development would expose both Panther and its investors to risks associated with development. In an effort to balance risks and return opportunities, Panther management crafted a systematic approach that they believed would mitigate much of the risk associated with the development process.
During the Summer of 2011, Panther Properties Management entered into a joint venture agreement with a local developer for the ground-up construction of Panther Creek Parc, a suburban Class "A" apartment community encompassing 264 luxury rental units and a 5,000 sq. ft. clubhouse. The development was situated on an 18.5-acre property in an upscale neighborhood in Murfreesboro, Tennessee, which is 30 miles southeast of Nashville.
Panther viewed its first ground-up development, Panther Creek Parc, as a potential prototype for future projects. Meticulous preparation and planning was reflected in stellar execution. Construction of Panther Creek Parc was finished both ahead of schedule and under budget. Panther's property management group aggressively managed the leasing process, leading to rapid lease-up and early property stabilization.
With the success of Panther Creek Parc, Panther embarked on a Phase II project to build 84 luxury rental units on the property contiguous to the original development. Construction for Phase II began in the third quarter of 2015 with completion expected to be in the first quarter of 2017.
Third-party equity investors have received a substantial portion of invested capital returned, continue to receive their preferred rate of return on outstanding capital, and retain their pro-rata ownership of a project that is currently worth well in excess of the equity invested and outstanding mortgage obligation.