Slaughter Park — Notes Index

HSRE Partnership #10 LLC raised $7,000,000 in Class A Preferred Equity from 20+ friends & family investors. GP co-invested $3,000,000 (31.1%). Total project cost: $14,648,500 including $5M in project-level debt.

Investment thesis: Acquire 90.35 acres in Austin's SE ETJ, subdivide into 4 development-ready pads (3 MF + 2 retail), and sell to institutional developers. No vertical construction — land entitlement and disposition only.

• LP preferred return: 8% p.a. (non-compounding)
• Target levered IRR: 43.7%
• Target equity multiple: 2.32x
• Projected exit: 36 months
• Acquisition fee: 3% ($300K)

1 of 4 lots closed. The project is in active disposition — Lot 1 (Belmont) closed Feb 2026, Lot 3 (Preakness) is under contract, and Lots 2 & 4 are in active marketing.

• Lot 1 (Belmont): ✅ CLOSED — Feb 24, 2026 to NRP Group. Distribution #1 made to investors.
• Lot 2 (being subdivided N/S): Suds car wash LOI at $27/SF on Lot 2 North (~3 ac). Lot 2 South (~13 ac) becomes MF Pad #3. ⚠️ N/S subdivision must be approved before either piece can close.
• Lot 3 (Preakness): Under contract (NRP) — 9th Amendment, $50K deposit, 6-month extension. Boundary matter being resolved with Kutak Rock.
• Lot 4: Active marketing — ~2.2 ac retail pad, Sean Murphy (CLD) managing outreach.

Lot 2 is not a simple retail pad. It is being subdivided North/South into two distinct pieces:

• Lot 2 North (~3 ac, ~250ft depth along Slaughter Lane): Suds car wash chain has submitted an LOI at $27/SF — 80% above the original $15/SF projection. Suds is a car wash chain, not a brewery.
• Lot 2 South (~13 ac): Becomes the third MF pad (equivalent to MF Pad #3 in the original offering). Likely buyer: NRP or similar multifamily developer. Pricing TBD.

Critical constraint: The N/S subdivision does not yet exist. Subdivision approval must be obtained before either piece (North or South) can proceed to closing.

Financial impact of Lot 2 North (Suds at $27/SF):

• Original: $15/SF on ~2 ac → ~$1,241K net
• Suds LOI: $27/SF on ~3 ac → ~$3.5M est.
• Variance: +$2,287K est. (+184%) vs. original 🔥

The Slaughter Park property sits in Austin's Southeast corridor along East Slaughter Lane at Capitol View Drive, within the City of Austin's ETJ (Extraterritorial Jurisdiction). Key market factors:

• ETJ advantage: No zoning or land use controls — provides development flexibility and reduced entitlement risk
• Growth corridor: SE Austin has seen continued residential and commercial growth, driven by proximity to Tesla/Samsung manufacturing and I-35 corridor development
• Multifamily demand: Austin MF market experienced supply-driven softness in 2024–2025 but remains fundamentally strong. NRP Group's continued interest (Belmont closed, Preakness under contract) validates MF demand in the submarket
• Retail demand: Outpacing MF — Suds car wash LOI at $27/SF (Lot 2 North) vs. original projection of $15/SF reflects strong demand from convenience/commercial users in the growing SE corridor
• Infrastructure: Regional detention pond built as part of Belmont development serves the broader subdivision — $760K buyer credit reflects shared infrastructure investment

Comparable transactions: Limited direct comps for 90-acre subdivisions in the ETJ, but individual pad sales in the area support $25–35/SF for retail and $20–30K/door for MF land.

NRP Group is a national multifamily developer/operator headquartered in Cleveland, OH, with significant operations in Texas and across the Sun Belt.

• Lot 1 (Belmont): Closed Feb 24, 2026. NRP is developing a ~300-unit multifamily community on the 15.2-acre pad.
• Lot 3 (Preakness): Under contract for a ~330-unit MF development on the 15.6-acre pad. 9th Amendment executed with $50K deposit and 6-month closing extension.
• Key contacts:
  • Dan Loss — DLoss@nrpgroup.com · 512-202-9011 (Lot 1)
  • Max Whipple — max.whipple@nrpgroup.com · 248-979-4243 (Lot 3)
• Track record: NRP has developed 40,000+ units nationally. Their commitment to two lots in the subdivision (purchasing 30.8 of the 90.35 total acres) represents strong institutional validation of the project.

NRP's continued commitment through multiple contract amendments (9 on Preakness) demonstrates genuine intent to close — the extensions appear related to the boundary matter rather than buyer hesitation.

As part of the Belmont (Lot 1) sale, NRP Group received a $760,000 credit at closing for their responsibility to construct a regional detention pond and related infrastructure.

• Purpose: The regional detention pond serves not just Lot 1 (Belmont) but the broader subdivision — it provides stormwater management for multiple lots
• Impact on Lot 1 proceeds: The $760K credit reduces Lot 1 net proceeds from the gross sale price. This is a legitimate project cost that would have been borne by HSRE if not passed to the buyer
• Benefit to remaining lots: With regional detention handled as part of Lot 1/Belmont development, the remaining lots (especially Lot 3/Preakness) benefit from existing infrastructure — this should reduce infrastructure cost requirements for subsequent buyers
• Construction & Mitigation Agreement: Recorded and on file — governs maintenance and cost-sharing obligations

Distributions to LP investors follow a waterfall structure governed by the HSRE Partnership #10 LLC operating agreement:

• Trigger: Distributions made upon lot closing events (not on a regular schedule)
• Priority 1: LP Class A preferred return — 8% annual (non-compounding) on contributed capital
• Priority 2: Return of LP contributed capital
• Priority 3: Return of GP contributed capital
• Priority 4: Profit split per partnership agreement

Distribution history:

• Distribution #1: Made post-Belmont closing (Feb 2026) — amount TBD (placeholder)
• Distribution #2: Expected upon Preakness (Lot 3) closing
• Distributions #3–4: Upon Lots 2 & 4 closings
• Final distribution: Entity wind-down after last lot closes