Presented by NEAL BAWA Grocapitus ANNA MYERS Grocapitus OMAR KHAN Boardwalk Wealth San Jose Apartments STONY STONEBRAKER 138 units | JAX LENNON LEE A Value Add Multifamily in the Southside Submarket of Jacksonville FL
Our Goal for Today The Agenda Who are we? – An introduction to the Management team Our Investing process Why Jacksonville? – Let’s explore this exciting Metro Why this submarket in Jacksonville? – Let’s explore the Neighborhood Why this property? – Let’s understand the opportunity What are the Numbers? – Assumptions, Loans, Splits, Returns & more How long and How much? - Investment amount and Timeframe Time for your Questions
Before we start, some housekeeping Let’s get this out of the way Fe el free to type questions in at any point. We will answer them during or at the end. This presentation is being recorded. You will get a copy. All numbers shown are preliminary (and are likely to change due to ongoing due diligence). We put the property in contract recently. This material does not constitute an offer or a solicitation to purchase securities. An offer can only be made by the Private Placement Memorandum (PPM). This document is an informational summary of the prospective investment opportunity only. The PPM and its exhibits contain complete information about the Property and the investment opportunity. This presentation has been prepared to summarize such information for prospective investors in the Company. The information contained herein is not a substitute for an investor’s complete review of all of the information attached to the PPM as part of their own due diligence regarding this investment opportunity and its suitability for their investment portfolio.
Meet the management team President and CEO, Grocapitus About Neal Key Focus Neal’s companies have owned / managed a portfolio of over $150 In Investor Management Million Lea easing and Ten enant Marketing Over 1,600 units of Multifamily and Student housing, in 7 states Submarket and property sel election Neal Bawa Nationally known Multifamily mentor and speaker Operations and metrics CEO & Founder About 4,000 investors attend his Grocapitus Multifamily webinar series and hundreds attend Multifamily Boot camps Co-founder of the largest Multifamily Investing Meetup in the U.S. with 3000+ members.
Meet the boots on the ground team Operating Partners & Asset Managers Experienced Multifamily Operators Combined, they have held over 2,000 multifamily units in 9 properties in Dallas, Fort Worth, Austin and San Antonio, TX Investor Count: 60 One property was taken through Omar Khan Stony Stonebraker Lennon Lee refinancing, returning capital to investors They have invested as Co- GP’s and LP’s
Meet the management team The strength of the project is in the team Anna Myers Julianne Feliza Jennifer Pineda Transaction Coordinator & Operating Partner & Tenant Leasing & Investor Relations Project Manager Marketing
Core Competencies What we are really good at ACQUIRE & STABILIZE FIND & VERIFY 3 to 5 YR EXIT ADD VALUE After uncovering an With effective management Our goal is to sell the We identify high quality investment property that and enhancement of the property and return capital properties with significant meets our stringent criteria, property we are able to and profits to investors in a upside and a very favorable our Asset Managers and improve occupancy rates and 3-5 year time period. risk to reward ratio. Principals spring into action increase rent rates, resulting in and work hand in hand with increased property values and We take pride in We employ a proprietary our property team to acquire higher cash flow for happy communicating regularly research-focused process to the asset. investors. with our investors on uncover the best metros, If the property is a progress toward reaching sub-markets, turnaround property team the projected exit price. neighborhoods and target members work relentlessly properties. to stabilize the property.
How we select markets Location, Location, Location EMPLOYMENT RENT GROWTH SALES TRENDS SUPPLY & DEMAND We monitor the supply of The 5-year rent growth We continuously monitor We look for metros and local units carefully to ensure forecast is one of our key local sales to compute cap submarkets that are adding a it will not spike the vacancy indicators. We use a powerful rates and determine whether significant number of high- rates and negatively impact proprietary method to our cap rates are on target to paying jobs, resulting in a rents. calculate this value. reach our projections. stable local economy
Grocapitus Portfolio & Track Record The Point on Flamingo Love Cove Resort Art City 192-unit C class property in Las Marina and RV park Art City Center is a beautiful Vegas purchased in May 2017. acquired in Charlotte, NC in new construction mixed use Borders UNLV campus on two 2016, and turned into high- project in Springville, UT. The sides, and is now transformed end glamping resort. iconic mid-rise secure access into purpose built student Installed 16 of 36 cabins. residential facility has 102 housing. It is run as full-service, Daily rate and occupancy units. The project was furnished housing, rented by climbing continuously. The completed in April 2018 and the bed to individual students. model works and we are is halfway through lease-up. First 100 students now in. looking to buy more resorts. Chelsea Place Rails on Main Woods of Ridgmar 174 unit Class C property in East 322 unit new construction purpose- 235-unit stabilized property Atlanta, 95% occupied. Value Add built student housing project next to acquired in Ft. Worth, TX in project with under market rents, will the university in Buffalo, NY. First Dec 2016. We have undergo light rehab and rents raise of $6.2MM used to buy land, rehabbed 150+ units to a pushed to market . Two miles from demo, land remediation & rezoning. higher spec. And have our other Atlanta property, so lots Project well timed as Buffalo successfully raised rents and of efficiencies here. economy surged in 2017. Starting improved tenant base. Now construction 2018, for 2020 issuing regular distributions. Property purchased December 2018 completion. South Lake Side Park Canyon Windward Forest 6 Building, 237 unit project in 151 unit Class B Property in 216 unit Class C Property in Chicago. Well behind schedule for Dalton GA, Chattanooga Metro. East Atlanta. 94% occupied turnaround. 1 st property mgr Under market rents and 20 property, will undergo light hired not a good fit. We are back down units from a fire gives us rehab on all units. to 85% physical occupancy and opportunity to add significant 80% economic occupancy (up value in this project. Property purchased Sept 13, from 50%). Pushing hard to get to 2018 cash flow positive. Property purchased November 2018
Let’s take a look at the Metro Why we love JAX
WELCOME TO JACKSONVILLE
17:1 19.5 Jobs : Apartments Rents as % of total income 1.7% 3.2% Job Growth Population Growth (double of (2x* National Avg) national average 4.7% 4.9% Avg. Vacancy Effective Rent Growth 2,131 : 1,865 JAX MU LTIFAM I LY M E T R IC S YoY Absorption vs New Supply
Fortune 500’s JAX OVERVIEW headquartered in Jacksonville include EMPLOYMENT BY SECTOR Education & Health Trade, Transportation Services 16% and Utilities 21% Fortune 500’s Professional & headquartered in Atlanta Manufacturing 4% Business Services include 15% Other Servicesn4% Construction 6% Leisure & Hospitality 13% Financial Services 10% Government 11%
MAJOR LANDFALLING HURRICANES
Great City! What about the Neighborhood? The Southside Submarket
SOUTHSIDE SUBMARKET • Best Schools • Path of Progress • Less desirable / Higher Crime • Better Areas / Lower Crime
S O U T H S I D E S U B M A R K E T O V E R V I E W 5.1% $1,165 $72.5 K 65.0 % $307 K Effective Rent Effective Rent Employed in White Collar Avg. Home Value (1 mile) Increase (YoY) Avg. HH Income (1 mile) Professions (5 miles) 0% 20 mins >2M SF >40M SF 95.2% Rent Avg. Retail <10 mins Office Space From Mayo Clinic Concessions Occupancy (<15 minutes) (#1 Hospital in FL)
FLOOD ZONE? OUTSIDE OF FLOOD ZONE
LOCATION OVERVIEW
LOCATION OVERVIEW
Let’s take a closer look at the Property Why we think San Jose Apartments is a winner
The Property’s Vital Stats Price, Occupancy, Unit Count, Age HOUSEHOLD OCCUPANCY UNIT COUNT INCOME 138 Units 94.2% $45K AGE PRICE Built 1974 $12.1M + $1M RENTS Improvements Zero Units are Below Market recently renovated $95K per door A True Value Add Opportunity
Fitness Center Private Courtyard All units have W/D connections 24 Hr. Emergency Maintenance Children’s Playground Convenient Access to Retail and Education Plenty of Parking for tenants and guests
Property video tour
Excellent Unit mix makes leasing easier A preferred mix of Studio, 1-Bed, 2-Bed & 3-bed, and one 4-bed Units 3 Bed / 2 Bath - Studio - Acapulco, 25 , Cozumel, 24 , 18% 17% 2 Bed / 2 Bath - Tulum, 16 , 12% 2 Bed / 1 Bath - 1 Bed/1 Bath - Carmen, 16 , Cancun, 48 , 35% 12% 2 Bed / 1 Bath - Cabo, 8 , 6%
Interior Renovation Plan STANDARD UNIT SAMPLE RENOVATED UNIT
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