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Completed Equity
Industrial
Chicago 16 Suite Flex-Industrial
Glendale Heights, IL
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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100% funded
Offered By Clear Height Properties
16.2%* TARGET IRR 16.2%-%
8.3%* TARGET AVG CASH ON CASH
1.94* TARGET EQUITY MULTIPLE
Estimated Hold Period 5 Years
Estimated First Distribution 9/2016
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Project Summary
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Overview
Property At A Glance
Year Built 1980
Total Square Feet 104,419
Current Occupancy 85.5%
Number of Tenants 13
Parking Ratio 200 spaces (1.91/1,000 square feet)
Acquisition Price

$5,110,000

Investment Highlights
In-Place Cash Flow with Upside Potential
Well Located with Experienced Local Sponsor
Priced Below Replacement Cost
Management
Cumulative Distributions

Clear Height Properties

Clear Height Properties ("Clear Height") is a real estate investment and management company headquartered in Chicago, Illinois. The company’s vision is to create value for its clients through acquiring and developing properties in the most desirable locations. From the beginning Clear Height has been driven by the belief that, “the work they do is a reflection of who they are.” That belief is what guides them in providing a transparent, dependable and entrepreneurial atmosphere for their team members, clients, and partners.

Acquisition

Clear Height, along with its partners, has developed a system designed to handle all aspects of real estate opportunities to allow for quick valuations, short due diligence, and “cash” closings. Their acumen and balance sheet gives them a competitive advantage in the market place to source the type of projects they are looking to invest in. With a heavy focus on industrial real estate opportunities, Clear Height is seeking value-add investments that are underperforming, distressed, and entrepreneurial in nature. In order to take advantage of these opportunists, they are experienced and capable of handling note purchases, build-to-suits, short-sales, portfolio sales and other opportunities.

Property Management

Clear Height’s property management group understands that each asset has its own specific financial objectives. With their approach to managing properties, they are able to provide customer service to their tenants, all while keeping a healthy bottom-line. Believing that tenant retention is the key to superb property management, their tenants have come to appreciate the high-touch they provide, and with most requests being handled within 24 hours. In addition, their team focuses on tenant relations, occupancy target levels, increased rental performance and an overall better understanding of a tenant's needs and how they compare with the owner's goals. They take this a step further with a proactive approach to lowering operating costs without sacrificing service to the tenants.

Asset Management

Clear Height’s asset management group looks to help investors receive measurable returns with their real estate holdings. Clear Height researches and evaluates the most optimal operational strategies for each asset with a focus on maximizing property values while mitigating risk. Clear Height’s track record of in-house leasing and management allows them to foster strong tenant relations that assist in maintaining occupancy levels. With Clear Height’s operational focus and expertise, they seek to control expenses and maximize efficiencies to create long-term cash flow sustainability and growth.

Leasing

Clear Height creates marketing strategies aligned with each asset's business plan that focus on obtaining and retaining the best tenants the market has to offer. They accomplish this by analyzing the local marketplace as it relates to trends, prospects, cycles and most importantly working with the brokerage community.

http://www.clearheight.com/
  • Wes G. Taubel
    Managing Partner
  • Daniel J. Huml
    Chief Investment Officer
  • Rick Nevarez
    Executive Vice President
  • Joe Sergi
    Chief Operating Officer
Wes G. Taubel
Managing Partner

Mr. Taubel has an extensive background in real estate development and construction, having built or developed over $350 million in real estate, primarily in mixed use and multifamily.  Mr. Taubel has a deep knowledge of medium to high density residential having entitled and master planned in excess of $1 billion of urban mixed use residential projects.  In his role at TWO he is responsible for setting the strategic direction of the Firm, sourcing opportunities and managing the entire development and acquisition process for the projects the Firm undertakes.

Prior to founding TWO, Mr. Taubel was an Assistant Vice President of Development at Ambling Companies, Inc., a full service multi-family real estate development firm located in Atlanta, Georgia.  Mr. Taubel was responsible for all aspects of project development on all conventional and commercial transactions. Mr. Taubel was responsible for the development, master planning and entitlement of over three million square feet of urban mixed use transaction. He has successfully negotiated numerous municipal development agreements, facilitated the creation of TADs and repeatedly worked with municipalities to create custom and innovated zoning and entitlement classifications for multi-phased mixed use transactions.  Prior to Ambling Mr. Taubel was a Regional Development Manager at Ashwood Development handling all aspects of land development in Atlanta and Northwest Florida, totaling over 1,800 lots and multiple commercial parcels.  Prior to that, Mr. Taubel was an Assistant Project Manager at Hardin Construction working on multiple hotels and luxury condominiums totaling over $100 million in construction value, most notably the Intercontinental Hotel - Buckhead.

Mr. Taubel is a graduate of Auburn University with a Bachelor’s of Science in Building Science and a minor in Business.  Mr. Taubel graduated with honors from the Goizueta Business School at Emory University, earning his MBA and membership in the National Business Honorary Society, Beta Gamma Sigma.  Mr. Taubel is an active member of the Urban Land Institute and ICSC.

Daniel J. Huml
Chief Investment Officer

As chief investment officer, Dan is responsible for the origination, underwriting, financing and closing of all real estate acquisitions, dispositions and joint venture agreements, along with all portfolio management activities. Prior to joining Clear Height Properties in 2010, Dan worked for BPG Properties, Ltd. (now Equus Capital Partners), a leading private equity fund manager. During his tenure with BPG, Dan was involved in the acquisition and management of more than six million square feet of institutional assets throughout the United States. Dan has also worked at Transwestern and in the Real Estate Acquisitions Department of Walgreens. Dan has served on the Advisory Board of the Urban Land Institute in Chicago, the Auxiliary Board of the Northwestern Memorial Hospital and the Cystic Fibrosis Foundation. Dan is a graduate of Indiana University, Kelley School of Business, B.S. in Finance and Real Estate and is an Illinois Licensed Real Estate Broker.

Rick Nevarez
Executive Vice President

Rick Nevarez is a 10+ year commercial real estate veteran. Rick began his career in the commercial real estate industry with global industrial real estate investment trust Prologis. His responsibilities included management, leasing, client retention, project management, and overseeing an operating budget of six million square feet of industrial and office real estate. While at Prologis, Rick coordinated a multi-million dollar disposition of industrial real estate to the City of Chicago/O’Hare Modernization Project. Rick also worked at ML Realty Partners, a private industrial real estate investor. During his tenure at ML, Rick oversaw third party management teams and brokerage teams. Rick was also previously assigned to assist with the strategic leasing and disposition of Bridgestone Americas industrial real estate portfolio throughout the United States. Rick is actively involved in the DePaul Real Estate Alumni Alliance (DREAA) and is also a member of Young Real Estate Professionals (YREP), Young Professional of Chicago (YPC) and International Council of Shopping Centers (ICSC). Rick is a graduate of DePaul University, Driehaus College of Business, B.S. in Finance and Management and a Licensed Real Estate Broker in the State of Illinois.

Joe Sergi
Chief Operating Officer

As chief operating officer, Joe oversees property management, construction and business development. Prior to joining the firm, Joe was the Senior Vice President for Rex Electric & Technologies, where he oversaw employees both in the office and those in the field providing all electrical, maintenance and technology services to clients. Employed at REX since he was a teenager, Joe worked his way up from a warehouse laborer to office positions in estimating, project coordination and project management. While leading the Technology Division, Joe's business development efforts allowed it to double in size from 2009 to 2013. Joe was also responsible for the acquisition and strategic alliances in 2013‐14 that have extended REX’s reach and enabled the company to provide better service and value to REX clients. After graduating from college in 2007, with a degree in Communications, Joe was a Tenant Representative for nearly three years for Newmark Knight Frank, a commercial real estate company. Joe balances his demanding career while serving civic and philanthropic organizations throughout the area. He has been an active member of the Building Owners and Managers Association (BOMA) since 2010 and is a member of BOMA’s Emerging Leaders Board.

Track Record

Property Location Type Date Acquired # of Units SF Total Capitalization
Addison, IL Industrial 1994 15 24,038 $985,231
Addison, IL Industrial 2000 1 25,000 $1,501,634
Kankakee, IL Land 2006 0 217,800 $823,000
Addison, IL Industrial 2011 9 49,515 $1,575,000
Milwaukee, WI Retail/Office 2012 8 22,500 $1,062,000
Elk Grove Village, IL Industrial 2013 10 29,580 $1,236,062
Addison, IL Industrial 2013 13 79,997 $2,965,073
Des Plaines, IL Industrial 2013 30 48,101 $2,034,722
Wooddale, IL Office/Industrial 2014 5 33,745 $1,657,850
Northbrook, IL Industrial 2014 6 42,679 $2,342,113
Northbrook, IL Industrial 2015 6 41,835 $2,431,808
Schaumburg, IL Industrial 2015 10 43,799 $2,498,220
Bensenville, IL Industrial 2015 10 100,000 $3,686,655
Mount Prospect, IL Industrial 2015 28 127,642 $6,562,763
Elk Grove Village, IL Industrial 2015 6 21,400 $961,795
Franklin Park, IL Industrial 2015 1 61,050 $1,871,725
Aurora, IL Industrial 2015 1 30,000 $1,652,876
Rolling Meadows, IL Industrial 2015 1 22,644 $1,188,955
Wheeling, IL Industrial 2015 11 31,726 $1,611,094
Elk Grove Village, IL Industrial 2015 3 20,000 $904,124
Elgin, IL Industrial 2015 4 27,600 $1,083,933
Des Plaines, IL Industrial 2015 2 14,372 $598,365
Chicago, IL 1 Multifamily 2011 11 10,000 $1,450,000
Bolingbrook, IL 2 Industrial 2012 8 25,000 $1,988,567
Elk Grove Village, IL 3 Industrial 2014 1 11,922 $464,593
Total     200 1,161,945 $45,138,157

1 Sold in 2012 for $1.75M
2 Sold in 2014 for $2.5M
3 Sold in 2015 for $540K

Business Plan

In this transaction, RealtyMogul.com investors will invest in Realty Mogul 58, LLC. Realty Mogul 58, LLC will subsequently invest in CHP Bloomingdale Real Estate, LLC, the entity that will hold title to the Property.

Clear Height Properties (the "Sponsor") believes the upside potential of this investment is the result of an absentee owner reluctant to spend the capital necessary to maximize leasing, along with poor maintenance and expense management by the existing third party manager.

Current vacancy at the Property of 14.5% is well above the 4% level seen across the submarket, and while existing leases at the Property average $6.88 per square foot, comparable leasing in the submarket is achieving average rents over $8.00 per square foot.

The Sponsor's business plan entails stabilizing the Property and enhancing net operating income by re-leasing the remaining vacant suites and increasing to market the currently below market leases as they expire. The Sponsor also intends to enhance the overall operations of the Property through improved management, and by leveraging the economies of scale provided by their local industrial portfolio of approximately one million square feet.

Property

RealtyMogul.com, along with Clear Height Properties (the "Sponsor"), is providing the opportunity to invest in the acquisition and ownership of a 104,419 square foot, flex-industrial property located in Glendale Heights, IL within the Chicago MSA (the "Property").

The primary objective of this investment is to acquire the Property below replacement cost, stabilize occupancy through tenant retention and acquisition, bring rents up to market, and sell the Property within approximately five (5) years. 

The Sponsor sees this investment as an opportunity to capitalize on an under managed asset in a market where they are an owner and manager of twenty industrial assets totaling approximately one million square feet.

Clear Height Properties is a dba for SFP Commercial Real Estate, LLC

Property Details

Built in 1980, this 85.5% occupied flex-industrial asset is comprised of 104,419 square feet across two buildings that have been subdivided into 16 suites ranging in size from 1,107 to 14,794 square feet. The majority of the suites contain a mix of both warehouse and office space (office build-outs range from 0-100% and average 26%). The Property is equipped with 17 exterior docks, 14 drive-in doors, has estimated clear heights of 15 feet, and features 200 surface parking spaces (1.91 spaces per 1,000 square feet). It also enjoys five access points that provide the necessary space for truck maneuverability.

Comparables

Sales Comps
Address Sale Date Size (SF) Price $/SF
SFP Armitage, Addison 1 Under Contract 79,992 $4,250,000 $53
1198 Nagel Blvd., DuPage 9/18/2015 131,250 $7,937,500 $60
6350 Church Rd., North DuPage 6/15/2015 83,666 $5,800,000 $69
10 W. North Ave., Lombard 3Q2015 118,680 $7,863,500 $66
999 Regency Dr., Glendale Heights 3Q2015 48,663 $3,202,000 $66
1101 Lombard Rd. N, Lombard 3Q2015 40,896 $2,126,592 $52
Average   83,858   $62
Submarket Average (since 2003)       $77
Subject   104,419 $5,110,000 $49

1 The Sponsor is an owner and manager of this deal that is currently under contract to be sold

Leasing Comps
Deal Type Size Lease Rate  Lease Start Term Escalation Abatement
1032 N DuPage, Lombard MG  2,912 $8.25 07/01/14 3.17 2.75% 1
1040 N DuPage, Lombard MG  5,661 $8.10 10/01/14 5.25 3.00% 2
972 N DuPage, Lombard MG  2,547 $8.25 08/01/14 2.17 2.50% 0
960 N DuPage, Lombard MG  5,036 $7.70 08/01/14 3.00 3.00% 1
976 N DuPage, Lombard MG  2,553 $8.15 09/01/14 2.00 3.00% 0
1040 N DuPage, Lombard MG  5,661 $8.35 01/01/15 5.25 2.50% 4
1054 N DuPage, Lombard MG 5,133 $8.25 02/01/15 5.25 2.50% 3
974 N DuPage, Lombard MG 2,533 $8.00 02/01/15 1.00 0.00% 0
1034 N DuPage, Lombard MG 5,117 $8.25 05/01/15 1.00 0.00% 0
980 N DuPage, Lombard MG  5,036 $8.95 09/01/15 5.08 3.00% 1
Average MG  4,219 $8.24   3.32 2.78% 1.20
Subject - In Place MG  6,526 $6.88   3.20    
Subject - Projected 1 MG  6,526 $7.88   5.00 2.50% 0.00

1 Weighted average for new and renewal leases within the first 24 months

The comparables included in the above tables were either sourced from CoStar or Real Capital Analytics, or they were provided by the Sponsor 

Location

The Property is located in the Glendale Industrial Park of Glendale Heights, IL approximately 29 miles west of the Chicago CBD in the Central DuPage submarket. Situated on a hard corner less than three miles west of I-355, the Property's main intersection (Bloomingdale Road/Brandon Drive) receives a daily traffic count of 27,300 cars per day (CoStar - 2014). The depth of this industrial pocket of the Central DuPage submarket is due to its proximity to Interstate 355, which is the primary north-south artery in the region. There is minimal inventory in Glendale Industrial Park that competes with this product.

Market Overview

As one of the three largest industrial markets in the U.S., Chicago remains the most influential industrial market in the Midwest due to its growing prominence as an inland port and its diverse, comparatively low-cost labor force. Chicago’s strategic location and transportation infrastructure make it one of the most important transportation centers in the country.

Submarket Overview

According to NAI Capital: As of Q3 2015, the mature Central DuPage Submarket has long been favored by users and both private and public investors for its relatively low property taxes, well-educated workforce and access to Metropolitan Chicago’s arterial roads and interstate system. Users in the Central DuPage submarket vary by type and are not limited to primarily distribution like other nearby submarkets. This diversified economy has grown over the past few decades and as a result there are very few vacant land sites that remain available for infill development. The Central DuPage submarket vacancy rate decreased 38 basis points from the previous quarter to the current rate of 4.01%. This submarket has the lowest vacancy rate throughout the Chicago metropolitan industrial market.

Demographic Information

Demographics 1 Mile 3 Miles 5 Miles
Population (2015) 20,042 99,398 275,689
Growth (2010-2015) 0.80% 2.53% 1.70%
Growth (2015-2020) 1.99% 2.41% 2.19%
Median HH Income (2015)  $59,119 $65,432 $73,637

Demographic information above was obtained from CoStar

Photos
Financials
Sources & Uses

Total Capitalization
Debt   $3,729,959
Equity   $1,951,993
Total Sources of Funds $5,681,952
     
Purchase Price   $5,110,000
Acquisition Fee   $127,750
Broker-Dealer Fee   $40,000
CapEx, TI, LC   $226,728
Working Capital   $100,000
Closing Costs & Other Fees   $77,473
Total Uses of Funds $5,681,952
Debt Assumptions

The projected terms of the debt financing are as follows:

  • Lender: First Community Financial Bank
  • Estimated Proceeds: $3,729,959, of which $152,959 to be reserved for capital improvements and leasing costs
  • Estimated Rate: Fixed (4.25%)
  • Amortization: 25 years, with two years of interest-only
  • Term: 5 years
  • Prepayment Penalty: While there will be no prepayment penalty if the Property is sold to an unrelated third party, the loan will contain a 3/2/1/1/1 prepayment penalty if the loan is refinanced at another financial institution, with the last six months of the loan term being at par.

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

CHP Bloomingdale Real Estate, LLC will make distributions to Realty Mogul 58, LLC as follows: pro rata share of cash flow to a 10% Internal Rate of Return ("IRR") hurdle, with a 70/30 split thereafter (70% to members, 30% to Sponsor) of excess cash flows and appreciation. Realty Mogul 58, LLC will distribute 100% of its share of excess cash flow (after expenses) to the members of Realty Mogul 58, LLC (the RealtyMogul.com investors). The manager of Realty Mogul 58, LLC will receive a portion (up to 10%) of the Sponsor's promote interest.

Order of Distributions to Realty Mogul 58, LLC (Operating Income, Refinance, and Sales Proceeds)

  • To all members pari passu until contributions have been returned and members have received a 10% IRR
  • Any excess balance will be split 70% to members ​pari passu and 30% to Sponsor

Distributions are projected to start in September 2016 and are projected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves. 

Cash Flow Projections
  Year 1 Year 2 Year 3 Year 4   Year 5  
Effective Gross Revenue $627,680 $737,726 $791,251 $846,530 $876,563
Total Operating Expenses $272,835 $286,363 $293,521 $305,989 $312,647
Net Operating Income $354,845 $451,363 $497,730 $540,541 $563,916
Distributions to Realty Mogul 58, LLC Investors $76,708 $77,617 $78,578 $79,240 $106,427
Fees

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

Type of Fee Amount of Fee Received By Paid From Notes
One-Time Fees:
Acquisition Fee $127,750 Sponsor Capitalized Equity Contribution 2.5% of the property purchase price
Broker-Dealer Fee The greater of 4.0% or $40,000 North Capital (1) Capitalized Equity Contribution 4.0% based on the amount of equity invested by Realty Mogul 58, LLC
Legal Expense Fee $10,000 North Capital Capitalized Equity Contribution  
Recurring Fees:
Property Management Fee 4.0% of effective gross revenues SFP Commercial Real Estate, LLC, an affiliate of the Sponsor Operating Cash Flow  
Asset Management Fee 1.0% of effective gross revenues Sponsor Operating Cash Flow  
Management and Administrative Fee 1.5% of amount invested in Realty Mogul 58, LLC RM Manager, LLC Distributable Cash  RM Manager, LLC is the Manager of Realty Mogul 58, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2)

Notes:
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.

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

The above presentation is based upon information supplied by the Sponsor or others.  Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 58, LLC, 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
Offering Documentation
Disclaimers/FAQs
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.


Illiquid Investment - Transfer Restrictions & No Public Market

The transferability of membership interests in Realty Mogul 58, LLC 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. 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.


Uncertainty Surrounding Future Sales Price

There is risk associated with the Sponsor being unable to sell the Property as projected.


Interest-Only Loan

The loan being used to acquire the Property is expected to have an interest-only period during the first two years of the term, which means that there will be no reduction in the principal balance during that interest-only period.


Interest Rate Risk

The Federal Reserve has methodically reduced the amount of stimulus it was earlier injecting into the U.S. economy, and has signaled that increases in the federal funds rate may be forthcoming. This could potentially lead to rising interest rates offered by other lenders and could have a negative effect on the future value of the Property (since higher loan interest rates might mean that potential buyers would face proportionately higher debt service expenses).


Mortgage Risk

The Sponsor has a signed term sheet with a lender to provide the debt financing for the acquisition of the Property, but there can be no assurance that the lender will complete financing on the rates and terms included in the underwriting being presented in the model for this investment opportunity. All rates and terms of the debt financing are subject to final lender committee approval, including but not limited to a modification in lender held capital reserve requirements that may result in a corresponding movement of certain funds currently projected as being held in a Sponsor controlled capital escrow account.


Co-Terminus Debt Risk

The loan on the Property is expected to have a term of five (5) years, potentially creating a refinancing risk should market conditions deteriorate over the next five years.


Leasing Risk

According to the Sponsor, although the average length that an existing tenant has been in occupancy at the Property is approximately six (6) years, the average length of time remaining on the existing leases at the Property is approximately three (3) years. Additionally, existing leases at the Property representing approximately 75% of net rentable square feet are scheduled to rollover within the first 24 months of the projected hold period. If the Sponsor is not successful in renewing the existing leases or in quickly finding replacement tenants, the performance of the Property will likely suffer and the Company will not likely achieve the targeted returns.


Local Market Conditions May Impact Rental Rates

Local conditions may significantly affect occupancy, rental rates, and the operating performance of a property. Such risks include (but are not limited to): (i) plant closings, industry slowdowns and other facts that affect the local economy; (ii) an oversupply of, or a reduced demand for, similar properties; (iii) a decline in household formation or employment or lack of employment growth, (iv) laws that could inhibit the ability to raise rents or to sell a property; and (v) other economic conditions that might cause an increase in operating expenses, such as increases in property taxes, utilities, compensation of on-site personnel and routine maintenance.


Management Risk

Investors will be relying solely on the Sponsor for the execution of its business plan. The Sponsor may in turn rely on other key personnel with relevant experience and knowledge, including contractors and consultants. Members of CHP Bloomingdale Real Estate, LLC​ (including Realty Mogul 58, LLC) will agree to indemnify the manager in certain circumstances, which may result in a financial burden if any litigation results from the execution of the business plan. While the Sponsor has significant operating experience, CHP Bloomingdale Real Estate, LLC​ is a newly formed company and has no operating history or record of performance. Realty Mogul 58, LLC is pursuing a venture capital strategy through its investment in CHP Bloomingdale Real Estate, LLC​, and the manager of Realty Mogul 58, LLC is expected to be treated as an investment adviser exempt from federal or state registration under this strategy.


Manager of Realty Mogul 58, LLC Will Participate in Sponsors' Promote Interest

The manager of Realty Mogul 58, LLC will be entitled to a participation in the value of any excess distributable cash flow and any appreciation of the Property realized upon its sale. This could lead to a potential conflict of interest between the manager and Realty Mogul 58, LLC. Investors must recognize and agree to waive and bear the risk of this conflict of interest. 


Uncertain Distributions

The Sponsor cannot offer any assurances that there will be sufficient cash available to make distributions to its members (including Realty Mogul 58, LLC) from either net cash from operations or proceeds from the sale or refinancing of the asset. Sponsor, in its discretion, may retain any portion of such funds for tenant improvements, tenant refurbishments and other lease-up costs or for working capital reserves. Sponsor has chosen to make distributions quarterly. 


Risk of Interest Charges for Sponsor Capital Calls

The amount of capital that may be required by CHP Bloomingdale Real Estate, LLC​ from Realty Mogul 58, LLC is unknown, and although CHP Bloomingdale Real Estate, LLC​ does not require that its members contribute additional capital to it, it may from time to time request additional funds in the form of loans or additional capital. Realty Mogul 58, LLC does not intend to participate in a capital call if one is requested by CHP Bloomingdale Real Estate, LLC​, and in such event the manager of CHP Bloomingdale Real Estate, LLC​ may accept additional contributions from other members of CHP Bloomingdale Real Estate, LLC​. Amounts that the manager of CHP Bloomingdale Real Estate, LLC​ advances on behalf of Realty Mogul 58, LLC will be deemed to be a manager loan at an expected interest rate of 10%. Amounts that are contributed by existing or new members will be deemed to be additional capital contributions, in which case Realty Mogul 58, LLC's interest in CHP Bloomingdale Real Estate, LLC​ will suffer a proportionate amount of dilution.


Uncertain Exit Timing

Although it is anticipated that the Property will be sold at the end of the expected five (5) year hold period, Realty Mogul 58, LLC will not have full control over the timing of the sale of the Property, and therefore we cannot offer assurances of when the exit will occur. If the Property is not sold after five (5) years, Realty Mogul 58, LLC may have the right (either at that point or at a later time), subject to other contractual limitations such as the loan on the Property and the requirements of the operating agreement of CHP Bloomingdale Real Estate, LLC, to force a sale of the Property or force a sale of the interests of Realty Mogul 58, LLC in CHP Bloomingdale Real Estate, LLC.  


General Economic and Market Risks

While the Sponsor has conducted significant research to justify the intended rental rates and sales price relative to comparable properties in the market, its best efforts to forecast economic conditions cannot state for certain whether or not rental rates will be achieved or investor sentiment and the capital markets will be favorable to the Property at the intended disposition date. The real estate market is affected by many factors, such as general economic conditions, the availability of financing, interest rates and other factors, including supply and demand for real estate investments, all of which are beyond the control of the Sponsor​​.


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 Sponsor and others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 58, LLC, 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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