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Columbus Office Portfolio
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INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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100% funded
Offered By Ravinia Capital Group
13.1%* TARGET IRR 12.1%-14.1%
15.3%* TARGET AVG CASH ON CASH
1.6x* TARGET EQUITY MULTIPLE
Estimated Hold Period 5 years
Estimated First Distribution 9/2019
Minimum Investment 50000
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Explore this project
Overview
Acquisition of two stabilized office buildings with cash flow upside in Columbus, OH alongside an experienced, repeat partner of RealtyMogul.
Cash Flow

The investment is expected to produce double-digit cash yield to RealtyMogul investors, with annual cash flow ranging from 12.2% to 17.5% and expected average cash-on-cash of 15.3%.

Partner

The Real Estate Company is an experienced office operator, as well as a repeat partner of RealtyMogul. It has owned and operated real estate properties with a total basis exceeding $346 million.

Market

The Columbus office market is one of the healthiest in the country thanks to significant employment gains and years of conservative construction (according to CoStar). Over the past five years, the market has experienced average annual rent growth of 5.6% and an average vacancy rate of 5.1%.

Property at a glance
Year Built 1947/1989/2004
Total SF 414,706 (252,706 excluding parking garage)
Current Occupancy 96.7%
Parking Ratio 4.2 spaces per 1,000 square feet
Number of Tenants 37
Acquisition Price

$37,800,000

Investment Highlights
The Real Estate Company is buying the Portfolio for $37.8 million or $91 per square foot ($117 per square foot for the office and industrial space, and $14,092 per space for the parking garage), which represents a going-in cap rate of 8.72% on trailing three month annualized net operating income.
The Real Estate Company has budgeted $2.5 million for building and amenity upgrades and repairs, along with an additional $4.0 million for tenant improvements and leasing commissions.
The Real Estate Company intends to retain the current Colliers property management and leasing team.
The exit strategy is to sell the Portfolio in five years at an expected cap rate of 8.25%.
Management
Cumulative Distributions

Ravinia Capital Group

Ravinia Capital Group (the "Real Estate Company"), founded in 2013, is a Chicago-based real estate investment and ownership firm. Founded by seasoned real estate professionals with 50 years of combined investment, asset management and redevelopment experience, the Ravinia team has owned over $346 million of commercial real estate. Ravinia focuses exclusively on middle market transactions with asset values ranging between $10 million and $100 million in targeted US submarkets. It seeks to acquire properties at prices below replacement cost with in-place cash flow and value-add upside. This approach is based upon the principals' real estate experience through various economic cycles.

RealtyMogul investors previously invested alongside Ravinia Capital Group in the acquisition of 544 Lakeview Parkway in Vernon Hills, IL in Q4 2018.  In Q2 2019, Ravinia executed a lease with a technology company to move into suite 204 (3,512 SF) after completing the build-out of the space as a speculative suite, and is currently renovating the building common areas.

http://www.raviniagroup.com/
  • James R. Solomon
    Principal and Chief Investment Officer
  • Antonio Bismonte
    Senior Vice President
  • Scott Barnum
    Managing Director
James R. Solomon
Principal and Chief Investment Officer

Mr. Solomon, with 27 years of public and private market real estate experience, has been responsible for the investment, financing or sale of more than $5 billion of office, industrial, retail and multi-family real estate. Prior to 2013, Mr. Solomon had founded one real estate investment firm and held top investment positions at Trizec Properties, Inc., Heico Realty Capital (family office) and Soros Fund Real Estate. During  2010-2012, Mr. Solomon co-founded the U.S. Capital Markets Group of Avison Young, at which time the firm tripled in size within the US and Canada. Mr. Solomon is an MBA graduate of University of Pennsylvania’s The Wharton School and a Foreign Service School graduate of Georgetown University.

Antonio Bismonte
Senior Vice President

Mr. Bismonte has 35 years of public and private market real estate experience and has been responsible for acquisition, financing, development, management, leasing and disposition of office, industrial, retail and multi-family real estate assets located throughout the United States, Canada and France. Prior to joining Ravinia Capital Group in 2016, he served an interim COO / CFO for Next Generation Development, a Chicago area residential developer, and has cultivated his real estate experience through 18 years of combined tenure at Trizec Office Properties, Inc. (NYSE: TRZ), Jones Lang LaSalle (formerly LaSalle Partners) and JMB Realty. Mr. Bismonte is responsible for portfolio management at Ravinia Capital Group. His daily responsibilities include interaction with the company’s leasing / management teams, budgeting, financial reporting, compliance and overall operational oversight. As a member of the firm’s investment committee, he is also involved in new investment due diligence as well as new investment financing.


Mr. Bismonte possesses a Masters in Management from the Executive Masters Program at the Kellogg School of Business at Northwestern University and a Bachelor of Arts in Accounting from Michigan State University, and is a CPA in the State of Illinois.

Scott Barnum
Managing Director

Mr. Barnum, with 25 years of financial services experience, focuses on investment opportunities, partner relationships, and business strategy. Prior to joining Ravinia, Mr. Barnum was Managing Director at Amherst Capital from 2015 to 2019 initially as COO, where he directed Amherst’s strategy, marketing, and capital raising. From 2013 to 2015, Mr. Barnum championed growth initiatives for BNY Mellon which included the capitalization of Amherst Capital and a CMBS Conduit Lending program. Earlier in his career, Mr. Barnum was a partner in a real estate investment group focused on retail and residential projects in the Midwest, and also held strategy positions at Deutsche Bank and Morgan Stanley. Mr. Barnum is an MBA graduate from Northwestern University’s Kellogg School of Management, and a BBA graduate from the University of Wisconsin-Madison.

Track Record

Address Location Asset Type Date Acquired Total SF Purchase Price $/SF Date Sold Sale Price
Kramer Place Apartments Columbus, OH Multifamily Sep'15 50,258 $5,500,000 $109    
DFW Airport Office Portfolio Dallas, TX Office Sep'15 188,595 $14,000,000 $74    
Grocery Anchored Portf. TX, FL, CA Retail Mar'16 1,014,802 $195,200,000 $192    
Mansell III     Alpharetta, GA Office Feb'17 126,717 $16,600,000 $131    
Meridian 589     Tampa, FL Office Mar'17 252,235 $18,500,000 $73    
One Hartsfield Centre Atlanta, GA Office May'18 150,835 $20,100,000 $133    
544 Lakeview Vernon Hills, CA Office Jun'18 139,324 $14,200,000 $102    
Parkside Terrace Alpharetta, GA Office Apr' 19 254,435 $48,100,000 $189    
Gresham Lakes (540 North) Raleigh, NC Industrial Nov'13 235,308 $9,000,000 $38 Jan '16 $16,000,000
Meridian Crescent Center     Tampa, FL Office Jun'16 89,440 $5,100,000 $57 Aug '18 $12,200,000
Total -- -- -- 2,501,949 $346,300,000 -- -- --

Real Estate Company's bio and track record were provided by the Real Estate Company and have not been independently verified by RealtyMogul or NCPS.

Business Plan

In this transaction, RealtyMogul investors are to invest in RealtyMogul 141, LLC (the "Company"), which is subsequently to invest in Columbus Office Portfolio, LLC (the "Target"), a limited liability company that will indirectly own interest in the Properties.  Ravinia Capital Group (the "Real Estate Company") is under contract on the Properties for $37.8 million ($117 per square foot for the office and industrial space, and $14,092 per space for the parking garage). The total project cost is to be $46.1 million ($111 per square foot).

The Real Estate Company (Ravinia) will implement a mark-to-market and lease-up strategy at both properties to further enhance cash flow, with $2.5 million earmarked for improvements. These include replacing the roof at Brewery Tower and implementing common area improvements at both properties. At 855 Grandview, the Real Estate Company intends to raise the warehouse rent to market and facilitate the expansion of one of the major tenants into vacant contiguous space. At Brewery Tower, the Real Estate Company intends to relocate several tenants to maximize revenue and facilitate the expansion of tenants that will likely require more space. Amenities will also be improved at both buildings.

855 Grandview is currently achieving average triple net (NNN) office rents of $13.39, and the Real Estate Company is targeting rents of $14.00 NNN on new leases for underwriting purposes. Brewery Tower is currently achieving average rents of $12.21 NNN, and the Real Estate Company is targeting rents of $13.50 NNN. Each building is already achieving proforma rent on at least one lease. The business plan calls for a five year hold, at which point the Portfolio is to be sold at an expected exit cap rate of 8.25%. Below is a summary of the CapEx budget.

Capital Expenditures Budget

CapEx Item $ Amount
Parking Lot & Loading Dock (855 Grandview) $200,000
Grab & Go Food Service (Brewery Tower) $25,900
New Parking Lot Signage (Brewery Tower) $18,000
HVAC (Brewery Tower) $150,000
Elevators (Brewery Tower) $750,000
Roof (Brewery Tower) $775,000
Bathrooms (Brewery Tower) $320,000
Contingency (10.5%) $235,000
Grand Total $2,473,900
Property
Property Details

Brewery Tower (500 S. Front St.)

Brewery Tower is a 12 story, 94% leased, Class A office tower situated on approximately one acre totaling 142,315 square feet, and is connected to the 579 space, four-story Brewery Garage (4.1/1,000 rentable square feet). The Property is located at 500 South Front Street in Columbus, OH, within the Brewery District submarket of the Columbus Central Business District (“CBD”). The glass lobby and outdoor patio seating area of Brewery Tower were completed in 2018. Brewery Tower is within the immediate proximity of the Courthouse District and walking distance to neighborhood restaurants and bars. Another notable neighborhood feature is the new $70 million mixed-use redevelopment occurring across the street from Brewery Tower, featuring a 140-room boutique hotel, retail, office, and condominium residences.

855 Grandview Ave.

Located approximately three miles west of downtown Columbus, 855 Grandview is a Class B, 100% leased creative office complex of 84,832 square feet with an attached warehouse of  25,559 square feet. The Property is situated on 5.9 acres with 369 surface parking spaces (4.5/1,000 rentable square feet). It is comprised of two connected sections. The "Tower" is a three story all-glass office building of 44,712 square feet, built in 2004. 'Quonset Hut' contains 40,125 square feet and 22 foot ceilings, and was built in 1947 and renovated in 2016. The contiguous warehouse measures 25,554 square feet with 37.5 foot clear heights (at its center) and a loading dock. 855 Grandview boasts easy access to downtown and suburban Columbus via I-670 (0.25 miles away) and Dublin Road (0.1 miles away). The complex is also directly across the street from Wagenbrenner’s $300 million Grandview Crossing development, planned to be 56 acres of mixed use development, including 800 multifamily units, retail, a hotel, and two office buildings. Construction has already commenced.

Major Tenants

Woda Cooper Companies is an experienced developer, general contractor, and property manager, which specializes in the design, construction and management of affordable multi-family apartments, senior communities and single-family homes. Since 1990 Woda has created over 12,000 housing units in rural, suburban and urban settings across 15 states and manages/maintains over 300 properties. In 2018, Woda was ranked as the sixth largest affordable housing developer in the country and the twenty-ninth largest affordable housing owner by Affordable Housing Finance. Woda is headquartered in the building with six US offices, employing over 550 employees. This is Woda's original lease, which was signed in June 2017.

Crabbe, Brown & James, LLP is a law firm that has served Ohio and surrounding states for nearly a century. Clients include Fortune 500 corporations, privately held businesses, nonprofit institutions (including The Ohio State University), governmental entities, and individuals. The company's main practice areas are litigation, business/corporate, employment, class action, and sports law. Crabbe, Brown & James has been in the building since 1991, when the company signed for the same space it occupies today.

ScriptDrop provides prescription delivery by connecting pharmacies to their network of couriers across the Country. It is the first medication delivery program that integrates directly into the pharmacist’s existing workflow—making the delivery process more efficient for the pharmacy and leading to a seamless delivery solution for patients. ScriptDrop is in its original lease term, which commenced in November 2018.

Founded in 1997 in Columbus, Ohio, Dynamix Engineering is a full-service mechanical, electrical, plumbing, fire protection, and technology engineering firm with a focus in design engineering and systems assessments. The Dynamix team provides consulting engineering services for building and infrastructure systems used in a broad range of facilities across several markets and industries across the nation. It is a minority-owned business and is now one of the top 100 engineering firms in the United States, undertaking some of the largest projects in the nation. Dynamix signed its original lease in September 2010, and has undergone a series of amendments since to expand the company's space.

The Drug Enforcement Administration is a United States federal law enforcement agency under the United States Department of Justice, tasked with combating drug trafficking and distribution within the United States. The DEA signed its original lease in the building March of 2010. Since then, it has gone through a number of amendments. The Real Estate Company expressed confidence that the DEA would renew their existing term, given that Brewery Tower is the only known building in the area that offers direct-access parking for their team.

Founded in 1891, and with offices in Columbus and Cincinnati, Loth designs "smarter spaces" for corporate, education, and healthcare markets. Loth's solutions incorporate furniture, walls, flooring, and technology configured in a way that facilitates workflow and enhances collaboration. LOTH will design existing or new space, manage projects from start to finish, install furniture and fixtures, and maintain and replace throughout the life of the space. Per the Real Estate Company, LOTH has a strong pipeline, including providing a portion of the furniture for the new $2 billion Ohio State Hospital project. Loth signed its original office lease in April 2008, and has expanded since through a series of amendments. The company signed for the warehouse space in March 2008.

Major Tenants Summary

Tenant Square Feet % of Property % of Portfolio Rent per square foot Lease Expiration Lease Type
Brewery Tower            
Woda Copper Co. 26,145 18.4% 10.3% $11.12 Aug '28 NNN
Crabble, Brown & James 22,513 15.8% 8.9% $12.25 Oct '22 NNN
DEA 17,372 12.2% 6.9% $17.73** Aug '20 NNN
Other Tenants 67,896 47.7% 26.9% $11.20 Various NNN
Subtotal 133,926 94.1% 53.0% $12.21    
855 Grandview            
ScriptDrop 21,950 19.9% 8.7% $12.75 Feb '26 NNN
Dynamix Engineering, Ltd. 20,744 18.8% 8.2% $13.00 Sep '28 NNN
Loth, Inc. 15,124 13.7% 6.0% $14.05 Jul '25 NNN
Other Office Tenants 27,019 24.5% 10.7% $13.85 Various NNN
Loth, Inc. (warehouse) 25,554 23.1% 10.1% $2.58 Dec '20 NNN
Subtotal 110,391 100.0% 53.7% $13.39*    
Grand Total 244,317     $12.67*    

*Average rent does not include warehouse space currently occupied by Loth, Inc.

**DEA rent includes parking.

Comparables

Lease Comparables - 855 Grandview Ave.
  1201 Dublin Rd. 1123 Goodale Blvd 1166 Dublin Rd. 855 Grandview Ave. Total/Averages Subject
Building SF 47,000 102,956 22,000 110,391 70,587 110,391
Year Built 1970 2017 1952 1947/2004 1980 1947/2004
Year Renovated 2000 N/A N/A 2004/2016   2004/2016
Rental Rate (NNN) $13.95 $16.50 $14.50 $14.05 $14.75 $14.00
Leased SF 3,931 11,331 11,673 15,124 10,515  
Tenant N/A U-Haul N/A Loth, Inc.    
Date Signed Aug '19 Dec '18 May '19 Jan '19    
Lease Term (years) N/A N/A 7.0 6.0 6.5  
Parking Ratio (per 1,000 sf) 3.5 0.0 4.0 4.5 3.0 4.5
Distance from Subject (mi.) 0.4 0.7 0.4 0.0 0.4  
Lease Comparables - Brewery Tower (500 S. Front St.)
  495 S. High St. 2 Miranova Place 10 W Broad St. 500 S. Front St. Total/Averages Subject
Building SF 80,063 243,527 407,472 142,315 218,344 142,315
Year Built 2001 2001 1985 1989 1994 1989
Year Renovated N/A N/A N/A 2018   2018
Rental Rate (NNN) $14.00 $14.50 $16.25 $13.96 $14.68 $13.50
Leased SF 2,401 6,884 17,241 5,059 7,027  
Tenant N/A N/A N/A Lendeavor    
Date Signed Jul '19 Aug '19 Apr '19 Apr '19    
Lease Term (years) 5.0 N/A 3.0 2.7 3.6  
Parking Ratio (per 1,000 sf) 3.0 3.0 4.0 4.1 3.5 4.1
Distance from Subject (mi.) 0.1 0.4 0.7 0.0 0.3  
Sales Comparables
  500 Olde Worthington 1400 & 1404 Goodale Blvd. 495 S. High St. Total/Averages Subject
Date Sold Sep '18 Sep '17 May '17   Nov '19
Building SF 97,000 80,491 69,188 82,226 252,706
Occupancy at Purchase 100% 100% 100% 100% 96.7%
Year Built 2000 1955 2001 1985 1947/1989/2004
Purchase Price $15,100,000 $12,714,518 $10,000,000 $12,604,839 $37,800,000
$/SF $156 $158 $145 $152 $117*
Cap Rate 8.10% 8.00% 7.50% 7.87% 8.72%
Parking Ratio (per 1,000 sf) 4.5 4.3 3.0 3.9 4.2
Distance from Portfolio Center 12.9 miles 1.3 miles 1.5 miles 5.2 miles  

*Per square foot adjusted for office and industrial space only

Lease and sale comparables were obtained from CoStar

Location

 

Market Overview

According to CoStar, Government, finance, and logistics entities continue expanding their footprints in Columbus, further strengthening fundamentals in one of the country’s healthiest office markets. The market’s employment gains are keeping vacancies tight, and years of conservative construction have all but eliminated the risk of office building oversaturation. The tight vacancy has fostered years of healthy rent gains, and Columbus is easily Ohio’s strongest-performing office market.

The vacancy rate in the market stands at 7.1% and gross asking rent is $19.65 per square foot.  The past 12 months have seen net absorption of 320,000 square feet, with 961,000 square feet delivered. In the past 12 months, the vacancy rate has risen 0.5% and rent has grown at a rate of 2.8%. In the past five years, the market has averaged annual rent growth of 3.2%. Current job growth for Columbus is 1.4%, just below the national average of 1.5%.

Downtown Columbus Submarket Overview

According to CoStar, the Downtown Columbus submarket has maintained rock-solid fundamentals thanks to the metro’s diverse economy. While office construction has not been explosive, developers are confident enough to bring speculative office-space back into the market. Vacancies remain below the historical average, prompting rent gains. With city planners and developers hoping to remake downtown into a trendy live/work/play district, there are plenty of reasons for optimism about the future of office space in downtown. Rent growth has been some of the metro’s strongest.

The vacancy rate in the Downtown Columbus submarket stands at 7.0% and gross asking rent is $21.32 per square foot, with Class A rents as high as $23.86 on average.  The past 12 months have seen net absorption of 37,800 square feet, with 160,000 square feet delivered. In the past 12 months, the vacancy rate has risen 0.4% and rent has grown at a rate of 2.6%. In the past five years, the submarket has averaged annual rent growth of 3.7%.

Grandview Submarket Overview

According to CoStar, fundamentals are healthy in the Grandview submarket, bolstered by the overall health of the Columbus economy and Nationwide Insurance’s Grandview Yards project. Recent construction has been largely build-to-suit projects and has hardly affected fundamentals. Healthy demand outside of Nationwide has vacancies at record lows, and this has prompted strong rent growth over the course of the cycle.

The vacancy rate in the Grandview submarket stands at 4.0% and gross asking rent is $19.94 per square foot, with Class A gross rents as high as $24.37 on average.  The past 12 months have seen net absorption of 149,000 square feet, with 135,000 square feet delivered. In the past 12 months, the vacancy rate has fallen 0.3% and rent has grown at a rate of 3.2%. In the past five years, the submarket has averaged annual rent growth of 5.7% per year.

Demographic Information - Brewery Tower

Demographic Information (2019) 1 Mile Radius 3 Mile Radius 5 Mile Radius
Population 14,136 143,596 362,863
Population Projection (2024) 15,245 155,492 387,013
Average Age 39 35 34
Median Household Income $67,233 $42,195 $43,119
Average Household Size 1.5 2.1 2.2
Median Home Value $356,651 $136,255 $130,781
Population Growth 2019-2024 7.9% 8.3% 6.7%

Demographic Information - 855 Grandview Ave.

Demographic Information (2019) 1 Mile Radius 3 Mile Radius 5 Mile Radius
Population 10,765 148,954 355,716
Population Projection (2024) 11,613 158,629 378,650
Average Age 36 33 34
Median Household Income $83,956 $48,924 $48,290
Average Household Size 1.9 2.2 2.2
Median Home Value $333,355 $199,466 $168,590
Population Growth 2019-2024 7.9% 6.5% 6.5%
 

Demographic information sourced from CoStar

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount  Per Square Foot
Debt $33,739,635 $81
Equity $12,372,188 $30
Total Sources of Funds $46,111,823 $111
Purchase Price $37,800,000 $91
Loan Fee $84,349 $0
Real Estate Company Acquisition Fee $546,698 $1
Broker Dealer Fee $120,000 $0
MogulREIT I Origination Fee $280,000 $1
CapEx Budget $2,473,900 $7
Closing Costs $465,894 $1
Tenant Improvements & Leasing Commissions $4,040,982 $10
Working Capital $300,000 $1
Total Uses of Funds $46,111,823 $111
Debt Assumptions

The expected terms of the debt financing are as follows:

  • Estimated Initial Proceeds: $27,924,753
  • Estimated Future Funding: $5,909,618
  • Interest Rate: LIBOR + 2.15% (an interest rate swap is required, and estimated to be 3.73%)
  • Interest Only Period: Five years
  • Loan Term: Four years 
  • Extension Options: One (1) one-year extension option (0.1% fee), subject to minimum debt yield of 8.75%
  • Prepayment Penalty: N/A

There can be no assurance that a lender will provide debt on the rates and terms noted above, or at all. All rates and terms of the debt financing are subject to lender approval, including but not limited to possible increases in capital reserve requirements for funds to be held in a lender controlled capital reserve account.

Distributions

The Real Estate Company intends to make distributions of all available cash and capital proceeds to investors (The Company and Real Estate Company, collectively, the "Members") as follows:

  1. To the Members, pari passu, all excess operating cash flows to an 8.0% IRR to the Members;
  2. 80% / 20% (80% to the Members / 20% to the Real Estate Company) of all excess operating cash flows to an 11% IRR;
  3. 70% / 30% (70% to the Members / 30% to the Real Estate Company) of excess cash flow and appreciation thereafter.

Note that these distributions will occur after the payment of The Company's liabilities (loan payments, operating expenses and other fees as set forth in the operating agreement, in addition to any member loans or returns due on member loans).

The Company will distribute 100% of its share of excess cash flow (after expenses and fees) to the members of The Company (the RealtyMogul investors).

Distributions are expected to start in March 2020 and are expected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Real Estate Company, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Cash Flow Summary
  Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue $5,648,805 $6,328,860 $6,402,209 $6,713,760 $6,882,439
Total Operating Expenses $2,688,089 $2,874,320 $2,940,749 $3,020,760 $3,096,312
Net Operating Income $2,960,716 $3,454,540 $3,461,460 $3,693,000 $3,786,127
RealtyMogul 141, LLC Cash Flows
  Year 0 2019 2020 2021 2022 2023 2024
Distributions to RealtyMogul 141, LLC Investors ($3,030,000) $65,643 $369,819 $469,276 $449,976 $513,376 $2,993,221
Net Earnings to Investor - Hypothetical $50,000 Investment ($50,000) $1,083 $6,103 $7,744 $7,425 $8,472 $49,393
Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

One-Time Fees
Type of Fee Amount of Fee Received By Paid From Notes
Acquisition Fee $546,698 Real Estate Company Capitalized Equity Contribution 1.45% of the Purchase Price
Broker-Dealer Fee $120,000 North Capital (1) Capitalized Equity Contribution 4.0% of the equity raised by RealtyMogul 141, LCC
Origination Fee $280,000 RM Adviser, LLC Capitalized Equity Contribution 0.74% of Purchase Price
Disposition Fee 0.41% of gross sale price RM Adviser, LLC Distributable Cash  
Recurring Fees
Type of Fee Amount of Fee Received By Paid From Notes
Asset Management Fee 0.25% of Purchase Price Real Estate Company Distributable Cash

Subject to annual inflation adjustments

Management and Administrative Fee 1.0% of amount invested in RealtyMogul 141, LLC RM Manager, LLC Distributable Cash RM Manager, LLC is the Manager of The Company and a wholly-owned subsidiary of Realty Mogul, Co. (2)
Property Management Fee 3.0% of Effective Gross Income Colliers Distributable Cash  

(1) North Capital Private Securities Corporation (“NCPS”), a registered broker-dealer who will act as placement agent for interests in the Company will be paid a fee as outlined above. NCPS will pay a referral fee to Mogul Securities, LLC (“MS”), an affiliate of the Manager and RealtyMogul, Co., for referring the transaction pursuant to a referral agreement between NCPS and MS. Certain employees of Realty Mogul, Co., an affiliate of Manager are registered representatives of, and are paid commissions by, NCPS.

(2) Fees may be deferred to reduce impact to investor distributions.

The above presentation is based upon information supplied by the Real Estate Company or others. Realty Mogul, Co., RM Manager, LLC, and The Company, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.

Documents
Disclaimers
Disclaimers

Forward-Looking Statements

Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated”, “projected”, “forecasted”, “estimated”, “prospective”, “believes”, “expects”, “plans”, “future”, “intends”, “should”, “can”, “could”, “might”, “potential”, “continue”, “may”, “will” and similar expressions to identify these forward-looking statements.


Non-Transferability of Securities

The transferability of membership interests in The Company are restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Moreover, the estimated investment holding period described herein is only a projection, and there can be no assurance when or if an investment may be liquidated. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.


Capital Call Risk

The amount of capital that may be required by the Target from the Company is unknown, and although the Target does not require that the Company and its members contribute additional capital to it, it may from time to time request additional funds in the form of loans or sell additional equity.  The Company does not intend to participate in a capital call if one is requested by the Target, and in such event the manager of the Target may accept additional contributions from other members of Target or from new members.  In the event that the manager of Target advances any capital on behalf of the Company, it will be deemed to be a manager loan at an interest rate that cannot be determined at this time.  Amounts that are contributed by existing or new members will be deemed to be additional capital contributions, in which case the Company's interest in Target will potentially suffer a proportionate amount of dilution.


Escrow Contingency

All funds from investors will be held in a non-interest-bearing escrow account with Broker-Dealer as escrow agent for the benefit of the investors in accordance with Rule 15c2-4 under the Exchange Act. All investor funds will be transmitted directly by wire or electronic funds transfer via ACH to the escrow account maintained by the escrow agent per the instructions in the Subscription Agreement. Upon certification by Broker-Dealer and acceptance by the Company that all contingencies have been met, the investor’s funds will be promptly transmitted to the Company. If the contingencies fail to be satisfied during the offering period, we will instruct the Broker-Dealer to return all funds to the investors without interest, deduction, or setoff, and all of the obligations of the investor hereunder shall terminate.


Environmental Risk

The phase 1 environmental assessment obtained by the Sponsor discloses several potential recognized environmental conditions at the Property, including staining on the floor near the trash compactor in the warehouse portion of the Property. In the event that the Sponsor Entity is required to expend material funds remediating the environmental condition of the Property, it could have a material adverse effect on the business and financial condition of the Sponsor Entity.


Renovation Risks

As of September 2019, the Property had a 96.7% occupancy level (based on a 100% occupancy level at the Grandview Property and a 94.1% occupancy level at the Brewery Tower Property), and the Sponsor intends to implement a capital improvement plan involving the interior and exterior renovation of the Property, and a leasing program in its effort to add value to the Property. The Sponsor intends to renovate all or some of the space within the Property and increase the current rental rates of such renovated space. There can be no assurance that, (i) the renovations will be consummated on a timely basis, (ii) the renovations will be completed satisfactorily, (iii) such work will not materially adversely affect other aspects of the operation of the Property, and (iv) the planned rental rate increase will have favorable results to meet the goals the Sponsor projected. Any delays or negative results of the renovation work or rental increase efforts could adversely affect the Property’s financial results or occupancy levels, including its business operations and thus the value of the Company’s investment.


Office Building Competition Risk

Office buildings are subject to market forces affecting supply and demand just like other types of commercial space, but the economic drivers for office space are sometimes different than those for other real estate investments. Rents and valuations for offices are primarily influenced not just by employment growth but also by a region’s economic focus. Office properties are especially influenced by specific types of employment -- namely, sectors with very high proportions of office use. These economic segments are generally those that utilize service and professional employees such as attorneys, accountants, engineers, insurance personnel, real estate brokers and related service providers (like title and escrow providers), and people working in banking, financial services, consulting, medical, dental, and pharmaceutical fields. Office space tends to be leased for relatively long periods, with tenants often having the option to renew leases for additional terms. This means that office properties often have leases that can lag current market lease rates, and an appropriate “step-up” of rental rates may not be able to be imposed until a lease expires. Economic downturns can affect office buildings more than residential buildings, since businesses can go bankrupt even while people continue to need housing. Re-leases of office space can often require significant lead time to consummate.


Flood Risk

A portion of the Property is located in a designated Flood Zone. It is possible that all or a portion of the Property could experience significant damage due to flooding, in which case the business and financial condition of the Sponsor Entity, and thus the Company, would be materially adversely affected. There is no guarantee that the Sponsor Entity has or will obtain adequate flood insurance for the Property.


*The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Issuer Document Package for a discussion of additional risks. The above presentation is based upon information supplied by the Real Estate Company and others. Realty Mogul, Co., RM Manager, LLC, and The Company, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.

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