Confidential Investment Summary
DAN HANDFORD
Managing Partner 404-316-8550 dan@passiveinvesting.com
DANNY RANDAZZO
Managing Partner 248-931-2528 danny@passiveinvesting.com
BRANDON ABBOTT
Managing Partner 864-270-4190 brandon@passiveinvesting.com
This document is confidential and may not be reproduced or redistributed. The information presented herein has been prepared for informational purposes only and is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or fund interest or any financial instrument and is not to be considered investment advice. This presentation is for institutional use only and is not to be distributed to any party other than its intended recipient. The following materials present information regarding a proposed creation of a special purpose vehicle (the “Issuer”) which would offer securities (the “Securities”) to finance its acquisition of a portfolio of financial assets to be selected and managed by the portfolio manager referred to herein (the “Manager”). These materials have been prepared to provide preliminary information about the Issuer and the transactions described herein to a limited number of potential underwriters of the Securities for the sole purpose of assisting them to determine whether they have an interest in underwriting the Securities. The views and opinions expressed in this presentation are those of PassiveInvesting.com, LLC. and are subject to change based on market and other conditions. Although the information presented herein has been obtained from and is based upon sources PassiveInvesting.com believe to be reliable, no representation or warranty, expressed or implied, is made as to the accuracy or completeness of that information. No assurance can be given that the investment objectives described herein will be achieved. Reliance upon information in this material is at the sole discretion of the reader. This data is for illustrative purposes only. Past performance of indices of asset classes does not represent actual returns or volatility of actual accounts or investment managers, and should not be viewed as indicative of future results. The investments discussed may fluctuate in price or value. Investors may get back less than they invested. Forward-looking information contained in these materials is subject to certain inherent limitations. Such information is information that is not purely historical in nature and may include, among other things, expected structural features, anticipated ratings, proposed or target portfolio composition, proposed diversification or sector investment, specific investment strategies and forecasts of future market or economic conditions. The forward-looking information contained herein is based upon certain assumptions, which are unlikely to be consistent with, and may differ materially from, actual events and conditions. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. These materials may also contain historical market data; however, historical market trends are not reliable indicators of future market behavior. Information in these materials about the Manager, its affiliates and their personnel and affiliates and the historical performance of portfolios it has managed has been supplied by the Manager to provide prospective investors with information as to its general portfolio management experience and may not be viewed as a promise or indicator of the Issuer’s future results. Such information and its limitations are discussed further in the sections of these materials in which such information is presented. Past performance of indices or asset classes does not represent actual returns or volatility of actual accounts or investment managers and should not be viewed as indicative of future results. The comparisons herein of the performances of the market indicators, benchmarks or indices may not be meaningful since the constitution and risks associated with each market indicator, benchmark, or index may be significantly different. Accordingly, no representation or warranty is made to the sufficiency, relevance, important, appropriateness, completeness, or comprehensiveness of the market data, information, or summaries contained herein for any specific purpose. Past performance is not indicative of comparable future results. Given the inherent volatility of the securities markets, it should not be assumed that investors will experience returns comparable to those shown here. Market and economic conditions may change in the future producing materially different results than those shown here. All investments have inherent risks. PassiveInvesting.com. All Rights Reserved. No part of this document may be reproduced, stored, or transmitted by any means with the express written consent of PassiveInvesting.com.
Institutional Quality Investment
The following information is an investment summary provided to prospective investors and others. This information is not an offering to sell either a security or a solicitation to sell a security. At the request of a recipient, the Company will provide a private placement memorandum, subscription agreement and the Limited Liability Company Operating Agreement. The Managing Member in no way guarantees the projections contained herein. Real estate values, income, expenses and development costs are all affected by a multitude of forces outside the Managing Member’s control. This investment is illiquid and only those persons that are able and willing to risk their entire investment should participate. Please consult your attorney, CPA and/or professional financial advisor regarding the suitability of an investment by you.
Table of Contents Executive Summary 8 Property Profile
24
Financial Analysis 38 Market Overview 46 Portfolio & Case Studies 54 Index 68
Executive Summary 9 9 9
Investment Summary Investment Offering Investment Highlights
Investment Summary OFFERING SUMMARY
Fort Myers, Florida The PassiveInvesting.com and the Real Estate Physician Teams have identified Las Palmas for acquisition. Las Palmas is a brand new, institutional grade, Class A asset located in Fort Myers, Florida. The property includes garden style apartments as well as town homes with attached two-car garages with driveway and spacious patios. Each unit features modern amenities and finishes that you would expect in a brand new property. Twenty-two percent of the units include den/home office space, perfect for the work from home lifestyle. The property is situated in beautiful Fort Myers, less than two miles from the Gulf Coast Town Center - a 1.2 million SF Target-anchored power center that includes national retailers such as Bass Pro Shops, Ross, and HomeGoods. Las Palmas also has exceptional connectivity to Interstate-75 with direct visibility from Alico Road and proximate access to Ben Hill Griffin Parkway and U.S. Highway 41. The surrounding affluent community has average home values of $850,000+. This offering is a 506(c) and is open to accredited investors only. An accredited investor has either a net worth of $1 million, not including their primary residence, OR an annual income of $200,000 (or $300,000 if married) for the last two years and you have a reasonable expectation that it will continue.
Cap (Adjusted T12*)
4.15%
Reversion Cap
See Page 15
Expense Ratio (Adjusted T12*)
35%
Occupancy (as of 11/15/21)
67% (100% Pre-Leased)
DSCR
1.27
Purchase Price
$109,000,000
Hold Time
5 years
Equity Required (Total)
$38,000,000
Equity Required (LP-Class A)
$4,400,000
Equity Required (LP-Class B)
$33,600,000
Class A IRR and Avg. Annual Return
9%
Class B Return
See Page 15 *normalized based on real estate tax expense
| 11
Brand New Class A Asset
Las Palmas features modern property amenities that are best-in-class in the surrounding area. The property has two resort-style, salt water pools with expansive pool deck, cabanas, and an outdoor kitchen. There is a 24hour, state of the art fitness center, modern clubhouse including resident lounge with entertainment area, business center with conference room, and much more.
Convenient Location
The Property is less than two miles from the Gulf Coast Town Center and has close proximity to many retailers, restaurants and entertainment. Minutes from Interstate-75, residents have easy access to the entire region. The Southwest Florida International Airport is just two miles away. In addition, numerous golf courses are nearby and its only a short drive to world-class beaches.
12 |
Impressive Lease Up Las Palmas experienced excellent lease up velocity, signing up to 50 leases per month as the property was leasing up. With the asset currently 100% pre-leased even after stopping concessions, and comparable properties renting up to $400/month higher, there is an opportunity to capture the delta between Las Palmas’ first leases and the comparable properties market rents through signing new leases when the initial leases start expiring in early 2022.
Adjustable, Private Loan We plan to secure a low-leveraged private loan of 75% LTV with an adjustable interest rate of approximately 3.35% with five years of interest only payments. We will be purchasing an interest rate cap to mitigate risk.
| 13
Two-Tiered Equity Structure Allows Investors to Match Investment Goals Two-Tiered Return Structure: A two-tiered return structure gives investors more choices when placing their equity. Investors have the opportunity to invest in either tier of equity Class A, Class B or a combination of both Class A and Class B. Diversifying in both classes allows for a risk adjusted and blended return. Limited Partner (A) Class A: Class A investors sit behind the debt in the capital stack. Class A has a preferred return of 9% paid out monthly This tier is limited to only 11.6% of the total equity with a minimum total investment of $100,000 per investor (for example, an investor may elect to invest in $75k in Class A and $25k in Class B or vice versa so long as the total investment in the deal is $100k.) Due to the position in the capital stack, Class A investors have virtually no upside upon disposition or another capital event. This tier is for investors who prefer stronger cashflow and minimal risk. Limited Partner (B) - Class B: Class B investors sit behind Class A investors in the capital stack, per the diagram. Class B has a preferred return of 7% which will accrue over the life of the deal. Cashflow from operations remaining after paying out Class A will be distributed to Class B investors monthly. The minimum investment in Class B is $50k. This tier is for investors who want to maximize their returns over the life of the investment. Class B investors will participate in the upside upon disposition or capital events. 14 |
GENERAL PARTNER $38,000,000
LIMITED PARTNER (B) LIMITED PARTNER (A)
30% Ownership 70% Ownership
DEBT
$82,087,500
INVESTOR BONUS*
Investments of $250,000 or more will receive an investor bonus. Class A: 1% bonus to reach a 10% annualized return when the asset is sold. Class B: 20% bonus on the backend equity when the asset is sold. *This bonus is paid by the GP equity and does not affect the returns for the other investors
CLASS A PARTNERSHIP STRUCTURE Investor Distribution of Cashflow
9% Preferred to Investor
Membership Ownership
9% Preferred to Investor
CLASS B PARTNERSHIP STRUCTURE Investor Distribution of Cashflow
7.0% Preferred to Investor 70/30 Split Thereafter
Membership Ownership
70% to 13% IRR 50/50 Thereafter
Below are sample returns based on each investment option:
Class A provides an immediate and consistent return of 9% throughout the life of the investment.
INVESTOR RETURNS BASED ON $100,000 INVESTMENT - CLASS A Investment Investor Annual Percent Return Investor Return on Investment
($100,000)
Return from Disposition - Limited Partner Total Return - Limited Partner
($100,000)
Year 1
Year 2
Year 3
Year 4
Year 5
9%
9%
9%
9%
109%
$9,000
$9,000
$9,000
$9,000
$9,000
$0
$0
$0
$0
$100,000
$9,000
$9,000
$9,000
$9,000
$145,000
Class B provides strong cash flows over the life of the investment and a higher overall return.
INVESTOR RETURNS BASED ON $100,000 INVESTMENT - CLASS B Investment Investor Annual Percent Return Investor Return on Investment
($100,000)
Return from Disposition - Limited Partner Total Return - Limited Partner
($100,000)
Year 1
Year 2
Year 3
Year 4
Year 5
5.1%
7.0%
7.1%
7.8%
8.4%
$5,068
$7,016
$7,059
$7,817
$8,411
$0
$0
$0
$0
$0
$5,068
$7,016
$7,059
$7,817
See Below
RETURN SUMMARY Limited Partner (Class A)
Limited Partner (Class B) Sensitivity Range
Cap Rate
Return on Disposition
IRR
Equity Multiple
Avg. CoC*
Annualized**
N/A
$100,000
9.0%
1.45x
9.0%
9.0%
4.55%
$139,824
13.0%
1.75x
7.1%
15.0%
4.35%
$153,212
14.8%
1.89x
7.1%
17.7%
4.15%
$167,891
16.6%
2.03x
7.1%
20.7%
4.05%
$175,774
17.5%
2.11x
7.1%
22.2%
3.95%
$184,056
18.5%
2.19x
7.1%
23.9%
*Excludes proceeds from sale, **Includes proceeds from sale
The Blended Option provides a mix of Class A and Class B. Please download our Blended Excel Calculator HERE to view potential returns using this option. | 15
Investment Offering
The PassiveInvesting.com and the Real Estate Physician Teams are pleased to present this investment offering of the 300-unit, Las Palmas apartment community. Delivered in 2021, Las Palmas is situated in the heart of Fort Myers, FL, one of the fastest growing cities in America. This asset offers residents the option to live in a townhouse with private entrance garages that sets Las Palmas apart from nearby competitors that do not have the same options. Furthermore, the modern, tech-friendly premium finishes along with the fully stacked amenity set create further demand from a strong resident profile.
16 |
Las Palmas Apartments 11900 Marquina Blvd • Fort Myers, FL 33913
300 Units
1,049
Average Unit Square Feet
2021
314,604
100%
23.84
$1.95
$1,999
Pre-leased (As of 11/15/21)
Acres
Year Built
Average Market Rent/SF
Rentable Square Feet
Average Market Rent
| 17
Exceptional Quality Tenant Base Las Palmas offers the ideal intersection between best-in-class amenities combined with being located in the strongest submarket for growth in the state of Florida. The Property is ideally positioned to appeal to the affluent renter by choice and is comprised of a high-income tenant base.
$172k Average Income Per Unit
27%
Rent To Income Ratio
$101k
Average Income Of Working Residents
21%
Of Residents Relocated From Out Of State
63%
Of Florida-Based Residents Relocated From Outside Ft. Myers
Notable One-Mile Demographics The Southeast Fort Myers submarket, and the area immediately surrounding Las Palmas, is highly desirable to residents looking for vast locational amenities. Area residents are wealthy, well-educated, and primarily employed in white-collar jobs, as reflected in the one-mile demographics:
$197k
Average One-Mile Household Income
18 |
88%
White-Collar Jobs
$2.54M Average One-Mile Net Worth
79%
Of Area Residents With Some College Or Better
Light Value-Add Opportunity TE C H N O LOGY PAC K AG E S RESIDENT COST: $15 PER MONTH
DISH FI B E R
RESIDENT COST: $90* PER MONTH *Estimated Average
PR I VATE YA R DS
RESIDENT COST: $100 PER MONTH
Comparable properties in the market have proved out the demand for tech packages by offering Bluetooth locks and smart thermostats, which we plan to install paired with a technology fee. Installation cost per unit: $1,250 This will be installed when a new resident moves in and will be required.
We also plan to terminate the existing cable contract, and implement Dish Fiber which allows us to provide the internet for the residents and receive net income per occupied units. Increased Cash Flows: $136,800/year Increased Value: $2.5 million This will be installed when a new resident moves in and will be required.
We also plan to install additional private yards wherever possible, which the property has already proven out with $150+ premiums. Installation cost per unit: $2,000 This amenity will be added to all ground floor units that allow it.
| 19
Fort Myers and Lee County Explosive Growth Since 2010, the Fort Myers population has grown by an astounding 55.46%. In addition, the job market in Lee County is also experiencing significant growth, growing by more than 16.9% since 2014. Fort Myers’ future projected job growth over the next ten years is a blistering 44% - outpacing the U.S. average by over 10.5%.
292,466+ WORKERS IN LEE COUNTY
16.9%
33,589
JOB GROWTH SINCE 2014
TOTAL BUSINESSES
47.4%
PROJECTED POP. GROWTH BY 2045
55.46%
GROWTH OF FORT MYERS SINCE 2010
POPULATION GROWTH SINCE 2010
CITY OF FORT MYERS
2020’s
IS FASTEST GROWING CITY IN AMERICA Sources: Esri, WalletHub, FDOT
20 |
Major Employment Drivers Gulf Coast Medical Center
Notable Nearby Employment Centers: HealthPark Medical Center, Gulf Coast Medical Center, Southwest Florida Regional Medical Center, Shell Point Retirement Center, Lee County Government Services and South Seas Plantation Resort.
Florida Gulf Coast University
Two of the area’s largest educational institutions are just a short drive from the Property: Florida SouthWestern State College (1,400 employees and 16,600 students, 22,000 including all 3 campuses) is nine miles northwest of the Property. Additionally, Florida Gulf Coast University (1,400 employees and 15,000 students) is just two miles south.
Southwest Florida International Airport
Southwest Florida International Airport: The US’ best-performing airport by added seats since summer 2019, with an additional three million. 35 existing routes have increased by a median of 81%. With major airlines such as Southwest, Delta, United, JetBlue, American, Frontier and Alaska Airlines, the Southwest Florida International Airport, and therefore Fort Myers, is on track for continued growth.
Summerlin Commons
Summerlin Commons, Metro Park and College Parkway Corridor business parks are all located within 10 miles of the Property. The College Parkway Corridor has the largest concentration of office space in Southwest Florida with large corporate tenants such as Chico’s and Blue Cross Blue Shield.
| 21
Fort Myers Growth By Plane Seats Traveled
Lee Memorial Golisano Children’s Hospital
22 |
Southwest Florida’s Top 30 Employers Rank
Company Name
Employment
1
Lee Health
13,595
2
Lee County School District
12,936
3
Lee County Local Government
9,038
4
Publix Super Market
8,728
5
NCH Healthcare System
7,017
6
Walmart
6,516
7
Collier County School District
5,604
8
Collier County Local Government
5,119
9
Florida Gulf Coast University
3,430
10
Bayfront Health
3,060
11
Charlotte County School District
2,553
12
Arthrex, Inc.
2,500
13
Charlotte County Local Government
2,464
14
McDonald’s
2,447
15
City of Cape Coral
2,253
16
US Sugar
2,100
17
Home Depot
2,040
18
Winn-Dixie
1,994
19
Hope Hospice
1,768
20
Ritz Carlton-Naples
1,450
21
Florida SouthWestern State College
1,441
22
Gartner, Inc.
1,200
23
Walgreens
1,191
24
City of Naples
1,169
25
Target
1,150
26
Chico’s Fas Inc.
1,147
27
Lowe’s Home Improvement
1,135
28
Hertz
1,110
29
Shell Point Retirement Community
1,100
30
Radiology Regional Center
1,031
LEE MEMORIAL HOSPITAL 11.3 Miles
NEOGENOMICS 2.5 Miles
THE FORUM 9.3 Miles
SOUTHWEST FLORIDA INTERNATIONAL AIRPORT 8.0 Miles
COLONIAL SQUARE 8.3 Miles
ALICO ITEC PARK (COMING SOON) 0.3 Miles
ALICO ROAD
INTERSTATE 75 2.2 Miles
LEGENDS GOLF & COUNTRY CLUB 4.2 Miles
GULF COAST TOWN CENTER 1.9 Miles
ESPLANADE LAKE CLUB GOLF COURSE 0.6 Miles
FORT MYERS BEACH 12.1 Miles
MIROMAR LAKES GOLF CLUB 2.3 Miles
MIROMAR OUTLETS 4.1 Miles
FLORIDA GULF COAST UNIVERSITY 4.1 Miles
| 23
Property Profile 9 9 9 9 9
Property Details Unit Mix Amenities Property Specifications Floor Plans
Las Palmas Apartments Fo r t M ye r s , F l ori d a
Las Palmas is a brand new, institutional grade, Class A asset with 300 modern units. The property is situated on 23.84 acres offering 1, 2 and 3 bedroom units in 16 residential buildings.
UN I T F E A TUR E S
Espresso flat-panel kitchen and bathroom cabinets
Two resort style, saltwater pools
Luxury wood-style plank flooring Stainless steel appliances with filtered water/ice dispenser Maple white quartz countertops throughout
Un it M i x ( A s of Nove m b er 2021 )
Kitchen island for entertainment White subway tile backsplash in kitchen
Bed/Bath
Avg SF
#Units
Rent/Unit
Rent/SF
1BR/1BA
650
30
$1,569
$2.41
Ceramic tile shower surround
1BR/1BA
722
36
$1,624
$2.25
Double vanity in master bedrooms
1BR/1BA
801
36
$1,654
$2.06
1BR/1.5BA
946
30
$1,842
$1.95
2BR/2BA
1,053
24
$1,886
$1.79
In-suite washer and dryer Under-cabinet kitchen lighting
Undermount farmhouse sinks with pull-down gooseneck faucet Keyless fob and/or phone entry
2BR/2BA
1,114
42
$1,936
$1.74
2BR/2BA
1,191
24
$2,037
$1.71
2BR/2BA
1,287
36
$2,290
$1.78
Ceiling fans with light kits in living rooms and bedrooms
3BR/2BA
1,404
18
$2,460
$1.75
Walk-in closets
3BR/2.5BA*
1,600
8
$3,150
$1.97
Soft-close cabinets*
3BR/2.5BA*
1,678
16
$3,250
$1.94
Backlit bathroom mirrors
Screened-in balconies* Contemporary pendant lighting in kitchen USB ports in each unit
All 1 Beds
778
132
$1,669
$2.17
All 2 Beds
1,166
126
$2,047
$1.75
Town home units include attached two-car garages
All 3 Beds
1,546
42
$2,892
$1.86
*In Select Homes
Total / Avg
1,049
300
$1,999
$1.95
*Town homes
26 |
COMMU NIT Y AME N I TI E S
Den/home office room*
- Lap pool - Sunbathing pool 24-hour, fully equipped, state-ofthe-art fitness center including Les Mills™ cycling bikes and on demand video classes Expansive pool deck with cabanas and an outdoor kitchen Multiple grill areas with hammocks, daybeds, and relaxation spaces Outdoor gaming area with sand volleyball court and shaded seating area Covered beer garden with ice machines Large dog park Modern clubhouse including resident lounge with fireplace, kitchen, and entertainment area Business center with conference room and fresh ground coffee bar Game room Garages and storage units available for rent 24/7 package concierge Indoor bike storage Community recycling program with valet trash
14% 3 BEDROOM
44% 1 BEDROOM 42% 2 BEDROOM
| 27
Site Plan
P r o p e r t y S p ec i f i c a t i on s P R O P E R T Y D E TA I L S Year Built
2021
Electrical
Copper wiring
Number of Buildings
Twelve, three-story residential buildings; four, two story residential town home buildings; one, single story clubhouse with fitness center
HVAC
Heating and cooling provided by 1.0-3.0ton ground mounted condensers
Acres
23.84 acres
Site Density (Units/Acre)
12.58
Roof System
Pitched with composition shingles
Exterior Walls
Combination of stucco and Hardie Board siding
Interior Walls
Drywall
Foundation
Concrete slab
Construction Type
Wood frame
Ceiling Height
9 foot
Windows
Double-pane, insulated, hurricane rated, single hung windows in metal frame
Doors
Insulated metal skinned doors in painted metal frames. Interior doors are raised panel hollow core wood
UTILITIES Electric
Florida Power & Light
Water/Sewer
City of Fort Myers
Gas
TECO
PA R K I N G Surface Parking
591
Attached Garages (Single)
22
Attached Garages (Double)
24
Detached Garages (Single)
66
Total Parking Spaces
703
Parking Ratio
2.42 spaces per unit
| 29
Floor Plans
Floor Plans
A1
1 BR - 1 BA
1 BR - 1 BA
Number of Units: 30
Number of Units: 36
A3
A4D
650 SF
722 SF
1 BR - 1 BA
1 BR - 1.5 BA - Den
Number of Units: 36
Number of Units: 30
801 SF
32 |
A2
946 SF
| 33
Floor Plans
B1
2 BR - 2 BA
2 BR - 2 BA
Number of Units: 24
Number of Units: 42
B3
B4D
1,058 SF
1,114 SF
2 BR - 2 BA
2 BR - 2 BA - Den
Number of Units: 24
Number of Units: 36
1,191 SF
34 |
B2
1,287 SF
| 35
Floor Plans
TH2
TH1
3 BR - 2.5 BA
3 BR - 2.5 BA
Number of Units: 8
Number of Units: 16
1,678 SF
1,600 SF
C1
3 BR - 2 BA 1,404 SF
Number of Units: 18
36 |
| 37
Financial Analysis 9 9 9 9 9 9
Return on Investment Overview Debt and Cash Flows Pro Forma Projections Rent Comps Sale Comps Sensitivity Analysis
Fin a nc i a l O ve rvi e w
OFFERING SUMMARY Cap (Adjusted T12*)
4.15%
Reversion Cap
See Page 15
Expense Ratio (Adjusted T12*)
35%
Occupancy (as of 11/15/21)
67% (100% Pre-Leased)
DSCR
1.27
Purchase Price
$109,000,000
Hold Time
5 years
Equity Required (Total)
$38,000,000
Equity Required (LP-Class A)
$4,400,000
Equity Required (LP-Class B)
$33,600,000
Class A IRR and Avg. Annual Return
9%
Class B Return
See Page 15 *normalized based on real estate tax expense
40 |
DEBT FINANCING* Principal Balance
$82,087,500
Loan to Value
75%
Loan Type
Private
Interest Rate
3.35%
Months of Interest Only Payments
60
Term (Years)
3+1+1
Fixed or Adjustable
Adjustable (We will be purchasing an interest rate cap to mitigate risk.)
Amortizing Period (Years)
30
Prepayment Penalty
0.5% exit fee
*Subject to change before closing
| 41
P r o F or m a P r oj e c t i on s T-1
Per Unit
Year 1
Per Unit
Year 2
Year 3
Year 4
Year 5
Gross Potential Rent
$7,190,638
$23,969
$7,541,154
$25,137
$8,127,767
$8,445,983
$8,764,199
$9,082,415
Other Income
$432,004
$1,440
$671,258
$2,238
$966,932
$990,782
$1,014,633
$1,038,483
Loss to Lease
-$640,140
-$2,134
-$358,011
-$1,193
$0
$0
$0
$0
Vacancy Loss
-$2,348,942
-$7,830
-$377,058
-$1,257
-$406,388
-$422,299
-$438,210
-$454,121
-$102,580
-$342
-$69,102
-$230
-$27,093
-$28,153
-$29,214
-$30,275
$0
$0
-$2,655
-$9
-$6,130
-$6,370
-$6,610
-$6,850
$4,530,981
$15,103
$7,405,587
$24,685
$8,655,088
$8,979,943
$9,304,798
$9,629,652
17%
4%
4%
3%
INCOME
Concessions/Non-Rev Bad Debt EFFECTIVE GROSS INCOME YoY Increase
63%
OPERATING EXPENSES Payroll
$541,374
$1,805
$398,100
$1,327
$403,532
$413,737
$424,200
$434,927
Contract Services
$169,767
$566
$172,500
$575
$174,854
$179,276
$183,809
$188,458
Repairs & Maintenance
$43,176
$144
$67,500
$225
$68,421
$70,151
$71,925
$73,744
$0
$0
$63,900
$213
$64,772
$66,410
$68,089
$69,811
Utilities
$134,463
$448
$261,600
$872
$265,170
$271,875
$278,751
$285,800
Administrative
$95,920
$320
$84,000
$280
$85,146
$87,299
$89,507
$91,771
Marketing
$287,324
$958
$75,000
$250
$76,023
$77,946
$79,917
$81,938
$0
$0
$0
$0
$0
$0
$0
$0
$220,884
$736
$247,500
$825
$250,877
$257,222
$263,726
$270,396
$126,000
$420
$185,140
$617
$216,377
$224,499
$232,620
$240,741
Property Taxes
$87,966
$293
$1,339,889
$4,466
$1,354,493
$1,381,833
$1,409,724
$1,438,179
Replacement Reserves
$75,000
$250
$75,000
$250
$75,000
$75,000
$75,000
$75,000
$1,781,874
$5,940
$2,970,128
$9,900
$3,034,666
$3,105,248
$3,177,269
$3,250,764
35%
35%
34%
34%
$5,620,422
$5,874,695
$6,127,528
$6,378,888
27%
5%
4%
4%
Turnover
Legal Insurance Management Fee
2.5%
TOTAL OPERATING EXPENSES % of EGI NET OPERATING INCOME YoY Increase
42 |
39% $2,749,107
40% $9,164
$4,435,459 61%
$14,785
R e n t C om p s Building Name
Address
Units
Stories
Year Built
Avg SF
Mi. Away
Avg. Rent/SF
Avg. Rent/ Unit
1 Bed
2 Bed
3 Bed
Las Palmas
11900 Marquina Blvd
300
3
2021
1,049
-
$1.95
$1,999
$1,669
$2,047
$2,892
Decorum
9851 Decorum Dr
435
4
2019
1,077
8.1
$2.03
$2,186
$1,951
$2,216
$2,925
Grove at Portofino
19093 Cresenzo Ct
312
3
2020
988
3.0
$2.23
$2,201
$1,770
$2,241
$2,898
Murano 3 Oaks
17167-17179 Three Oaks Pky
318
4
2020
782
2.5
$2.45
$1,912
$1,885
$2,315
$2,288
Reserve at Coconut Point
22980 Vista Edera Cir
180
4
2021
910
9.0
$2.35
$2,135
$1,746
$2,360
$3,253
Spectra
5500 Spectra Cir
324
3
2017
993
5.5
$2.07
$2,056
$1,557
$2,256
$2,559
Legacy Gateway
10900 Legacy Gateway Cir
359
4
2020
1,151
6.0
$2.14
$2,459
$1,897
$2,692
$2,870
| 43
S al e s C om p s Criteria: Within 15 Miles of Las Palmas and are under contract or sold within the last 24 months.
44 |
Sale Date
Property Name
Number Of Units
Year Built
Sale Price
Price Per Unit
Pending
Las Palmas
300
2021
$109,000,000
$363,333
Pending
Town Village Walk
384
2020
$135,000,000
$351,563
Marketing
The Reserve at Coconut
180
2021/2022
$64,000,000
$355,556
Dec 2021
Anson at Palmer Ranch
239
2018
$84,845,000
$355,000
Nov 2021
West End at City Walk
318
2021
$111,300,000
$350,000
August 2021
Icon Central
368
2019
$149,175,000
$405,367
July 2021
Magnolia Square
290
2021
$129,920,000
$448,000
April 2021
Arcos
228
2019
$80,000,000
$350,877
April 2019
The Desota
180
2017
$75,336,000
$418,533
S e n s i t i v i t y A n a l ys i s Break Even Occupancy*
OCCUPANCY
GROSS INCOME
TOTAL EXPENSES
95%
$8,655,088
$5,784,598
85%
$7,822,243
$5,763,776
75%
$6,989,398
$5,742,955
70%
$6,572,976
60% 55%
Cap Rate Analysis
CAP RATE
IRR
4.55%
13.0%
4.35%
14.8%
$5,732,545
4.15%
16.6%
$5,740,131
$5,711,724
4.05%
17.5%
$5,323,709
$5,701,313
3.95%
18.5%
*Break Even Calculated After Stabilization
| 45
Market Overview 9 9 9 9 9 9
Fort Myers Awards and Accolades In The News: Fort Myers Close Proximity to Major Employers Local Retail Environment Minutes From Paradise Nearby Golf
Fort Myers Awards & Accolades
Fort Myers Ranks #1 as the Fastest Growing City in the Entire US - WalletHub Fort Myers ranked #1 in Most Popular Cities for the holidays by Sperling’s Best Places. Cape Coral-Fort Myers ranked #8 in Best Cities for Teleworking - Small Metro Areas by Forbes Magazine Fort Myers and Sanibel Island are #1 on the list for the 7 Best Beach Destinations in the US by Smarter Travel. The City of Fort Myers Ranked a Top Place to Live in Florida by US News and World Report. Fort Myers Ranked #7 Best Places to Retire in the Country - US News & World Report In 2018, WalletHub ranked Fort Myers as the #10 Best small city in the US (out of 1,200 smallsized cities) to start a business. US News and World Report ranked Fort Myers the #8 safest place to live in the US.
48 |
In The News: Fort Myers Neogenomic’s $60+ Million New Global Headquarters Complex Is Nearing Completion
• The firm generated $408.83 million in revenue in 2019 • The Complex is just west of Interstate-75 and north of Alico Road (2.5 miles from the Property)
GULFCOAST MEDICAL CENTER’S $347 MILLION EXPANSION • 417,000 square feet of new and renovated construction • Three stories and 268 new beds • New covered parking garage with 1,200 spaces
THE SOUTHWEST FLORIDA INTERNATIONAL AIRPORT
• In the early stages of a $360+ million expansion • The expansion includes a new traffic control tower and terminal
ALICO ITEC PARK
• New 240-acre business park development located within walking distance of Las Palmas • 1.2 million sq. ft. of industrial & 240,000 sq. ft. of new commercial space
Fort Myers Recreation Within Lee County there is a plethora of recreational activities and venues that are just a short drive from the Property, including Major League Baseball spring training facilities for the Minnesota Twins and Boston Red Sox, Sun Splash Family Water park, Hertz Arena, and nature sanctuaries with long, winding boardwalks. Residents have endless ways to enjoy the beautiful Florida weather. Fort Myers Pier
Jet Blue Park at Fenway South
Top Golf
| 49
Close Proximity Major Employers 1. Florida Gulf Coast University (2.0 miles) 2. Southwest Florida International Airport (2.1 miles)
3. Lee Memorial Hospital (11.8 miles) 4. Blue Cross Blue Shield (9.8 miles)
5. Gulf Coast Medical Center (6.8 miles) 6. Chico’s Headquarters (8.3 miles)
7. HealthPark Medical Center (9.7 miles) 8. Gartner (4.8 miles)
9. Metro Park (9.8 miles)
10. Summerlin Commons (9.6 miles)
11. Lee County Government Services (12.1 miles) 12. College Parkway (9.6 miles)
13. Southern Technical College (10.2 miles)
14. Shell Point Retirement Community (14.9 miles) 15. Raymond James (7.7 miles)
16. Florida SouthWestern State College (9.1 miles)
17. Bank of America Mortgage (8.4 miles)
50 |
Local Retail Environment Fort Myers, and the area surrounding Las Palmas, has countless options when it comes to things to “eat, shop, and do.” •
Gulf Coast Town Center – Located 2 miles from the Property, Gulf Coast Town Center is an expansive outdoor shopping Center. The shopping center features anchors including Regal Cinema, Bass Pro Shops, Target, and Costco as well as multiple restaurants and boutiques.
•
Miromar Outlets – Voted “Best Shopping Center in Southwest Florida” Miromar Outlets is an expansive outdoor retail park with over 140 shops selling top designer and brand name goods. The Outlets are located only 4 miles from Las Palmas.
•
The Forum at Fort Myers – A Target-anchored Power Center located just 15 minutes from the Property. This one-stop shopping destination has all the essentials that a resident may need, including a Target, Home Depot, Ross, Petco, and numerous food and beverage options.
•
Edison Mall – Edison Mall is an enclosed, super-regional shopping mall located northwest of the Property. The Mall is anchored by Dillard’s, JCPenney, and two Macy’s stores, and includes 133 stores and a lifestyle center section.
•
Coconut Point – Featuring 127 shops totaling 1,205,363 SF, Coconut Point is an outdoor mall located in Estero which includes restaurants, a movie theater, and other forms of entertainment such as live music and annual festivities.
| 51
Minutes From Paradise Fort Myers Beach – Ideal for a family outing, the seven-mile stretch of beach has a wide shoreline that eases into the Gulf. The palm-shaded sand and family-friendly reputation nabbed it the title “World’s Safest Beach”. Sanibel Lighthouse Beach & Fishing Pier – The historic, working Sanibel Lighthouse, Lighthouse Beach, t-dock fishing pier, and a boardwalk nature trail that winds through native wetlands is a great weekend destination for residents.
FORT MYERS FLORIDA
Barefoot Beach – This local favorite is an unspoiled, natural beach, ideal for kayaking and sand dollar enthusiasts. Barefoot Beach offers visitors an open and peaceful retreat among a 342-acre natural preserve. Lovers Key State Park – Lovers Key State Park has a stunning two-mile long sandy beach, which was listed by the Travel Channel as one of the Top 10 Florida Beaches. Estero Bay Preserve State Park – One of the most popular State Parks in west Florida, Estero Bay Preserve offers many miles of trails. Hiking the uplands of the preserve with numerous varieties of wildlife and native vegetation allows you to take a trip back in time.
52 |
15 Golf Courses Within A Twelve Miles Radius Of Las Palmas 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
The Club at Gateway Eastwood Golf Course The Plantation Golf & Country Club Pelican Preserve Golf Club Miromar Lakes Golf Club Fort Myers Country Club Stoneybrook Golf Club San Carlos Golf Club Legends Golf & Country Club Colonial Country Club Fiddlesticks County Club Heritage Palms Golf & Country Club Whiskey Creek Country Club The Club at Westminster Eagle Ridge Golf Club
The Club at Gateway
| 53
Portfolio & Case Studies 9 9 9
Assets Under Management Case Studies High-yield dispositions
PassiveInvesting.com Assets Under Management MARKET
BUILT
ACQUISITION DATE
VALUATION
UNITS
Wilmington, NC
2020
Pending Close
$32,900,000
120
29 North
Hickory, NC
2013
Pending Close
$18,000,000
101
Ascend at Tamarron
Houston, TX
2021
Pending Close
$76,167,000
351
The Hudson Cane Bay
Charleston, SC
2021
21-Nov
$79,500,000
300
Bluewater at Bolton’s Landing
Charleston, SC
2019
21-Sept
$108,000,000
350
Orlando, FL
2021
21-July
$103,000,000
354
Greenville, SC
1997
21-June
$35,700,000
232
Orlando, FL
2019
21-May
$55,230,000
216
Charlotte, NC
2019
20-Dec
$21,600,000
102
Raleigh, NC
1995
20-Nov
$73,250,000
288
Villas at Fort Mill
Charlotte, NC
2018
20-Oct
$27,050,000
144
Braxton at Lake Norman
Charlotte, NC
2014
20-May
$62,300,000
232
Orchard Park
Greenville, SC
1984
19-Sep
$29,200,000
172
Willowbrook
Greenville, SC
2000
19-May
$24,900,000
144
Emory Cove
Knoxville, TN
2001
19-Jan
$3,200,000
33
Fort Worth, TX
2001
18-Nov
$50,000,000
398
Houston, TX
1983
18-Aug
$22,100,000
261
$822,097,000
3798
PROPERTY Leland Station
Braxton Waterleigh Braxton at Woods Lake Monterosso Riverside Flats at Aberfoyle Village Braxton Cary Weston
Northern Cross Cranbrook Forest
TOTAL 56 |
Leland Station
29 North
Property is projected to close December 2021. Projected annual CoC returns of 9% (class a) and 7% (class b) and an IRR of 17.4% (class b) over a 5-year hold.
Property is projected to close December 2021. Projected annual CoC returns of 9% (class a) and 6.8% (class b) and an IRR of 17.4% (class b) over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
A
CLASS
B+
CONSTRUCTED
2020
CONSTRUCTED
2013
L O C AT I O N
Wilmington, NC
L O C AT I O N
Hickory, NC
UNITS
120
UNITS
101
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
The asset is a 120-unit, 2020-construction, Class A multifamily community located in rapidly growing Leland, NC. Delivered in 2020, Leland Station represents one of the newest apartment communities in the market and features top-of-market interior finish quality with tech-friendly options and a fully stacked amenity set. Consisting of carriage homes with private entry garages, Leland Station offers a differentiated product type in this market. The property features one and two bedroom apartment homes ranging from 780-square-feet to 1,319-square-feet.
The asset features 101 apartments in peaceful, desirable Northwest Hickory. The property features one, two and three bedroom apartment homes ranging from 715-square-feet to 1,308-square-feet. The property is conveniently located in the heart of Hickory and offers residents convenient access to multiple economic demand drivers, retail, and job opportunities. Additionally, Hickory has seen an impressive year over year rent growth of 10%+ as well as positive multifamily fundamentals, which positions the property for growth for years to come.
| 57
Ascend at Tamarron
The Hudson Cane Bay
Property is projected to close December 2021. Projected annual CoC returns of 9% (class a) and 7.4% (class b) and an IRR of 19.5% (class b) over a 5-year hold.
Property closed November 2021. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 17.6% (class b) over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
A
CLASS
A
CONSTRUCTED
2020
CONSTRUCTED
2021
L O C AT I O N
Houston, TX
L O C AT I O N
Charleston, SC
UNITS
351
UNITS
300
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
The asset is a 351-unit luxury, garden apartment community located in Katy, an affluent, flourishing submarket of the Houston, TX MSA. The asset offers residents an array of high-end amenities thoughtfully designed with tranquility in mind. The Katy submarket has seen rapid growth over the past year with market leading absorption in paving the way for impressive rent growth. Katy is also home to 11,000+ companies and 200+ corporate headquarters. In addition, the property is situated in the acclaimed Tamarron master-planned community with plans for 4,000+ homes on 1,531 acres.
58 |
The asset is a 300-unit, 3-story garden apartment community located in Charleston’s premier Summerville submarket. With its rapidly expanding economy, outstanding demographics, business-friendly economic environment, and world-class lifestyle amenities, Charleston has garnered national recognition that has further stimulated investment capital flows into the market. The property’s highly convenient location, modern design and best-in-class finish and amenity set differentiate the asset from its competitors and serve to indulge a highly affluent and educated resident base in search of the submarket’s optimal living environment.
Bluewater at Bolton’s Landing
Braxton Waterleigh
Property closed September 2021. Projected annual CoC returns of 9% (class a) and 7.3% (class b) and an IRR of 18.4% (class b) over a 5-year hold.
Property closed July 2021. Projected annual CoC returns of 9% (class a) and 6.9% (class b) and an IRR of 19.1% (class b) over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
A
CLASS
A
CONSTRUCTED
2019
CONSTRUCTED
2021
L O C AT I O N
Charleston, SC
L O C AT I O N
Orlando, FL
UNITS
350
UNITS
354
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
This asset is located in the highly sought-after West Ashley submarket of the Charleston MSA. Completed in 2019, this true, Class A community was thoughtfully designed with stately architecture, quality floor plans and a serene landscape making it one of the premier communities in Charleston. Bluewater at Bolton’s Landing is situated in the heart of West Ashley which boasts stellar demographics and is in close proximity to major employers and medical jobs. The property also is minutes from the excitement of downtown Charleston and Folly Beach, James Island, Johns Island, and Kiawah Islands.
This asset is located in the rapidly growing Horizon West community of Winter Garden, which boasts stellar demographics and is home to notable whitecollar employers and medical jobs. The Orlando MSA was one of the top investment markets prior to the COVID-19 pandemic and is rapidly making its way back to the top with strong job gains and overall population growth that ranked #3 in the country for 2020. Ascend Waterleigh is a thoughtfully designed, low density community complete with spacious one-, two, and three-bedroom apartments with convenient access to white-collar employment and major Orlando thoroughfares.
| 59
Braxton at Woods Lake
Monterosso
Property closed June 2021. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 18.9% (class b) over a 5-year hold.
Property closed May 2021. Projected annual CoC returns of 9% (class a) and 6.7% (class b) and an IRR of 16.1% (class b) over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
B+
CLASS
A
CONSTRUCTED
1997
CONSTRUCTED
2019
L O C AT I O N
Greenville, SC
L O C AT I O N
Orlando, FL
UNITS
232
UNITS
216
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
The asset is centrally located in the highly desirable Upstate region of South Carolina in the Central Greenville submarket. The property is located in the heart of the Upstate’s burgeoning “Industry Triangle” as five of the county’s eight largest employers (10,500+) are within three miles of the property. The property is a 1997 vintage, partially-renovated over the past 7 years, institutional-quality asset with significant opportunity for modernized interior renovations and exterior renovations. The business plan is to capitalize on improving the existing operational inefficiencies, complete renovating the unit interiors with modern upfits, and to improve the common areas while still maintaining competitive rental rates.
60 |
The asset is situated in the Southwest submarket of the Orlando MSA in the prominent Orlando suburb of Kissimmee. The property benefits from best-in-class amenities, rock solid submarket fundamentals and a central location making it the ideal apartment community for a variety of residents. Located near the Loop in Kissimmee, Monterosso is just minutes away from all of the shopping, dining, and entertainment that nearby Orlando has to offer. The property is only 20 minutes from Disney Springs, Orlando’s best theme parks, Orlando International Airport, The Florida Mall and The Mall at Millenia.
Riverside Flats at Aberfoyle Village
Braxton Cary Weston
Property closed December 2020. Projected annual CoC returns of 9% (class a) and 7.9% (class b) and an IRR of 13.7% (class b) over a 7-year hold.
Property closed November 2020. Projected annual CoC returns of 9% (class a) and 7.4% (class b) and an IRR of 14.5% (class b) over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
A
CLASS
B+
CONSTRUCTED
2019
CONSTRUCTED
1995
L O C AT I O N
Charlotte, NC
L O C AT I O N
Raleigh, NC
UNITS
102
UNITS
288
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
The asset enjoys one of the most unique locations across the Charlotte metro, located minutes from the Charlotte-Douglas International Airport, with immediate access to I-85 and Highway 74 that provide direct access to Uptown Charlotte (135,000+ jobs). The immediate area is positioned along a path of progress in Belmont, a suburb defined by high incomes, impressive schools, and unparalleled quality of life. The historically under served submarket has witness outsized multifamily rent growth in recent years and is projecting 18% growth through 2024, while occupancy levels remain at market leading levels.
The asset is centrally located in the highly desirable Triangle region of North Carolina in the Cary submarket. The property is a short drive to the country’s largest research park, called the Triangle Research Park, that has over 250+ companies with 50,000+ employees. The property is a 1995 vintage, renovated in 2016, institutional-quality asset with significant opportunity for modernized interior renovations and exterior renovations. The business plan is to capitalize on improving the existing operational inefficiencies, complete renovating the unit interiors with modern upfits, and to improve the common areas.
| 61
Villas at Fort Mill
Braxton at Lake Norman
Property closed October 2020. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 13.2% (class b) over a 7-year hold.
Property closed May 2020. Projected annual CoC returns of 9% (class a) and 7.3%(class b) and an IRR of 13.1%(class b) over a 7-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
A
CLASS
A
CONSTRUCTED
2018
CONSTRUCTED
2014
L O C AT I O N
Charlotte, NC
L O C AT I O N
Charlotte, NC
UNITS
144
UNITS
232
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
This asset is situated in south Charlotte at the border of North Carolina and South Carolina, and benefits from impressive resident demographics and strong operational metrics. The immediate area surrounding The Villas at Fort Mill boasts top tier, desirable demographics with high average household incomes ($108,894) and predominantly white collar jobs (86.5%). This demographic is defined by its well-educated talent pool with disposable income. The business plan includes Improving operations with new management team, upgrading the remaining 50% of original units and updating the dog park.
62 |
This asset is located in Charlotte, NC and is a 232-unit surface parked garden community completed in 2014. Surrounded by lush, mature landscaping and North Carolina’s largest man-made lake, Lake Norman, the property benefits from impressive resident demographics and strong operational metrics. The business plan includes Improving operations with new management team, painting the exterior of the buildings and upgrading the current Internet services to a service called Gigafy.
Orchard Park
Willowbrook
Property closed September 2019. Projected annual CoC returns of 9.0% and an IRR of 16.0% over a 5-year hold.
Property closed May 2019. Projected annual CoC returns of 8.7% and an IRR of 15.6% over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
B
CLASS
B
CONSTRUCTED
1984
CONSTRUCTED
2000
L O C AT I O N
Greenville, SC
L O C AT I O N
Greenville, SC
UNITS
172
UNITS
144
STRUCTURE
Lead KP/GP
STRUCTURE
Lead KP/GP
This asset is located in Greenville, SC where there has been an average of 3.2% rent growth since 2014. The property is located minutes from the county’s largest employers and also near three of the area’s largest medical complexes. This was an off-market acquisition through broker relations while acquiring a prior asset. The business plan includes improving operations with new management team, remodeling the clubhouse to modern look, and interior renovation including modern countertops, upgraded appliances, and adding washer/dryers in 100% of the units.
The asset is located in the affluent South Greenville submarket of Simpsonville/ Mauldin where there has been an average of 3.2% rent growth since 2014. The property is located minutes from 5 of the counties 8 largest employers (10,500+ jobs). 104 of the interiors were 2000 vintage and the plan is to perform moderate renovations to include improving the layout of the kitchen. The business plan also includes improving operations with new management team and interior renovation including modern countertops, upgraded appliances, and adding washer/dryers in 100% of the units.
| 63
Emory Cove
Northern Cross
Property closed Jan 2019. Projected annual CoC returns of 11.7% and an IRR of 18.0% over a 5-year hold.
Property closed November 2018. Projected annual CoC returns over 8% and an IRR of 16.1% over a 5-year hold.
PROPERTY DETAILS
PROPERTY DETAILS
CLASS
B
CLASS
B+/A-
CONSTRUCTED
2001
CONSTRUCTED
2001
L O C AT I O N
Knoxville, TN
L O C AT I O N
Fort Worth, TX
UNITS
33
UNITS
398
STRUCTURE
Lead KP/GP
STRUCTURE
Co-GP
This asset is located in a stable northern submarket called Halls. Halls is known for its community feel with above average public schools, recreational amenities, dining and shopping, and country club golf. The interiors were 2001 vintage and the plan is to perform lights renovations to include adding a washer/dryer to each unit. The business plan includes renovating the units to bring to modern upfits as needed, improving operations with new management team and light interior/exterior upfits.
64 |
The asset is an Institutional-quality asset with substantial value-add component. The seller did not renovate any classic units, leaving 100% value-add potential. The business plan includes repositioning the demographic of the asset with luxury amenities, boosting rental revenue with renovations of all units, modernizing community amenities as well as implement numerous revenue-generating options for tenant and seek out capital event (supplemental, refinance) in years 2-3.
Cranbrook Forest Property closed Aug 2018. Projected annual CoC returns of 10.5% and an IRR of 19% over a 5-year hold.
PROPERTY DETAILS CLASS
B
CONSTRUCTED
1983
L O C AT I O N
Houston, TX
UNITS
261
STRUCTURE
KP/Co-GP
The asset is located in the desirable Spring ISD in northwest Houston with convenient access to I-45, Beltway 8, George Bush Intercontinental Airport, shopping, dining, and public transportation. Cranbrook had under performing management, deferred maintenance, and has room to increase rents after performing interior unit renovations. The business plan includes renovating the remaining 79% of the classic units, improving operations with new management team, and adding additional amenities to include new playground and dog park.
| 65
PassiveInvesting.com High-Yield Dispositions Property
Market
Increase in Valuation
Hold Period
COC
IRR
Equity Multiple
Braxton at Brier Creek
Raleigh, NC
55%
25 Months
42.5%
33.3%
1.89x
Pines on Wendover
Charlotte, NC
66%
26 Months
19.5%
18.66%
1.42x
2207 North
Greenville, SC
53%
30 Months
22.7%
21%
1.57x
Ridge on Randal
North Arlington, TX
37%
34 Months
18%
17.3%
1.52x
The Montogomery
North Arlington, TX
35%
35 Months
18%
17.3%
1.52x
SOLD 66 |
SOLD
SOLD
| 67
Index 9 9 9
Property Management Real Estate Terms & Definitions Sponsorship / Management Team
Full Service Property Management
FCA Management manages over 5,200+ units in Texas and the Southeast. FCA Partners has 25+ years of management experience. FCA Partners provides quality daily management services that are focused on property operations, increasing asset value, timely and accurate reporting, and clear communication.
70 |
Real Estate Terms & Definitions »
Capitalization Rate (Cap Rate) – A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor’s potential return on his or her investment. This is done by dividing the income the property will generate (after fixed costs and variable costs) by the total value of the property. ◊ When acquiring income property, the higher the capitalization rate (“Cap Rate”), the better. ◊ When selling income property, the lower the Cap Rate the better.
◊ A higher cap rate implies a lower price, a lower cap rate implies a higher price. »
Cash Flow – Cash generated from the operations of a company, generally defined as revenues less all operating expenses.
»
Cash-on-Cash – A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested. ◊ Calculated: Annual Dollar Income Return / Total Equity Invested = Cash-on-Cash
»
Debt Service Coverage Ratio (DSCR) – It is the multiples of cash flow available to meet annual interest and principal payments on debt. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.
»
Investor Average Annual Return, excluding disposition – The average return per year during the investment hold. This calculation does not include the return of invested capital.
»
Investor Average Annual Return, including disposition – The average return per year including profits from disposition.
»
Internal Rate of Return (IRR) – The rate of return that would make the present value of future cash flows plus the final market value of an investment opportunity equal the current market price of the investment or opportunity. The higher a project’s internal rate of return, the more desirable it is to undertake the project.
»
Return on Equity (ROE) – The amount of net income returned as a percentage of shareholders equity.
◊ ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder’s Equity
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Sponsorship / Management Team The PassiveInvesting.com Team has been investing in commercial real estate assets since 2013 with a portfolio in excess of $742MM with 4,233 apartment units.
MANAGING PARTNERS
DAN HANDFORD
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DANNY RANDAZZO
BRANDON ABBOTT
DEDICATED TEAM OF EXPERTS
BRIAN BORNHORST
DIRECTOR, ASSET MANAGEMENT
ANDREW DAVIS
DIRECTOR, INVESTOR RELATIONS
CHRIS NEARY
ERIC FITZGERALD
ACQUISITIONS ASSOCIATE
DIRECTOR, ACQUISITIONS
JD RYE
ASSOCIATE CONTROLLER
ANNE SHABARECK
DIRECTOR, INVESTOR SERVICES
RYAN THORSEN
ACQUISITIONS ANALYST
CAITLIN RANDAZZO DESIGN COORDINATOR
MELISSA BROOM
DIRECTOR, MARKETING & PR
STACEY FOSTER
TRANSACTION COORDINATOR
MISTY CRAPS
ADMINISTRATIVE ASSISTANT
WHITNEY HUTTEN
DIRECTOR, INVESTOR EDUCATION
HANNAH ALLISON
MARKETING & EVENT COORDINATOR
ASPEN MORGAN
ADMINISTRATIVE ASSISTANT
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Co-GP CHERRY CHEN, M.D. Founder The Real Estate Physician (972) 850-6611 cherry@therealestatephysician.com www.therealestatephysician.com
Cherry received her MD at Texas A&M College of Medicine with honors and completed her training at Oregon Health & Science University. She is an Internal Medicine physician, and has experience with commercial real estate investments across multifamily, self-storage, and manufactured home parks as a limited passive investor, as well as raising private equity capital through The Real Estate Physician. Dr. Chen founded The Real Estate Physician in 2018 to empower her physician colleagues in commercial real estate investments. The Real Estate Physician is a physician-forward resource with a vision to empower a community of physician investors to achieve greater financial independence, so we can have the freedom to practice medicine on our own terms. It now provides value to over 1,000+ physician members.
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