Berkshire will purchase the property for approximately $100,000/unit. Many nearby comps of similar vintage that have already executed a premium value add program are selling for approximately $125,000/unit on average.
The Property benefits from its close proximity to the Telecom Corridor. More than 5,700 companies have a presence in the area.
$30,800,000
Berkshire Property Holdings
Berkshire Property Holdings (the "Real Estate Company") was founded in 2013 by Hamza Kuraishi and Zamir Kazi and is headquartered in Miami, Florida. It is a real estate investment firm specializing in multifamily acquisitions and re-developments throughout the USA. It currently operates in California, Florida, Georgia and Texas. In a short space of time, Berkshire Property Holdings has established an excellent reputation for moving swiftly and decisively when identifying undervalued and under-performing assets in strategic locations. The company's strategy has been to operate in markets where it sees significant growth potential. The company believes that its success hinges on careful market selection, strong sourcing capabilities, comprehensive due diligence, detailed financial analysis, and methodical execution. Berkshire Property Holdings uses it’s veteran acquisition team’s market expertise to target assets in high growth submarkets and then create value through a combination of rebranding, renovating, and revitalizing property management. A disciplined investment approach to renovation and tenant improvement has led to repositioning opportunities in assets with significant value-add potential, while always maintaining a focus on downside risk limitation.
http://berkshirepropertyholdings.com/-
Zamir KaziCEO / Co-Founder -
Hamza KuraishiManaging Principal / Co-Founder
Zamir is the CEO and co-founder of Berkshire Property Holdings. He is responsible for the overall operations and management of Berkshire Property Holdings, as well as overseeing the origination, structuring and asset management of all of Berkshire’s investment activities. Zamir has overseen over 36 successful real estate transactions for Berkshire Property Holdings.
Zamir attended FSU and graduated magna cum laude with a Bachelor’s degree in Pre-Med with Business. Post university, Zamir started and sold several successful business and has been frequently published in Forbes Magazine, Entrepreneur, Inc and The Huffington Post. A true entrepreneur, Zamir’s vision, verve and drive are integral assets to Berkshire Property Holdings success.
Hamza is the Managing Principal and co-founder of Berkshire Property Holdings. While intimately involved in all aspects of the company, Hamza’s main focus at Berkshire Property Holdings is in raising capital and managing investor relations.
Prior to founding Berkshire Property Holdings, Hamza was a partner at a London stock brokerage company for 10 years. Hamza has a background in Military Engineering and holds an honour’s Bachelor’s Degree in Geography and Urban Planning from the University of London. A graduate of the Royal Military Academy Sandhurst, Hamza’s man management skills are integral to all repositioning success at the properties.
Real Estate Company Portfolio
| Property | Location | Asset Type | Acq Date | Units | Purchase Price | Sale Price | ||
| Las Lomas | Dallas, TX | Multifamily | 2019 | 221 | $18,000,000 | Not Sold | ||
| Park at Peachtree Hills | Atlanta, GA | Multifamily | 2019 | 118 | $18,000,000 | Not Sold | ||
| Camelot Gardens | Jacksonville, FL | Multifamily | 2019 | 691 | $40,000,000 | Not Sold | ||
| Desert Peaks | El Paso, TX | Multifamily | 2018 | 175 | $6,250,000 | Not Sold | ||
| Alexandria Landings | Atlanta, GA | Multifamily | 2018 | 472 | $19,700,000 | Not Sold | ||
| Phillippi Shores | Sarasota, FL | Multifamily | 2018 | 28 | $2,005,000 | $3,600,000 | ||
| Willow Bend | Orlando, FL | Multifamily | 2016 | 188 | $8,500,000 | $13,500,000 | ||
| Pine View | Orlando, FL | Multifamily | 2016 | 91 | $2,600,000 | $4,000,000 | ||
| Riviera Villas | Orlando, FL | Multifamily | 2015 | 40 | $1,250,000 | $2,200,000 | ||
| Park Sands | Tampa, FL | Multifamily | 2015 | 28 | $1,400,000 | $1,650,000 | ||
| Florida Portfolio | Various, FL | Multifamily | 2015 | 150 | $3,750,000 | $5,000,000 | ||
| Orlando Portfolio | Orlando, FL | Multifamily | 2015 | 150 | $3,750,000 | $5,000,000 | ||
| Total | 2,352 | $125,205,000 | $34,950,000 | |||||
The above bios and track record were provided by the Real Estate Company and have not been independently verified by RealtyMogul
Berkshire Property Holdings is pleased to offer investors the opportunity to invest up to $5.0 million of LP Joint Venture equity into Parks at Walnut RM, LLC which will subsequently invest into Parks at Walnut JV, LLC which will acquire and renovate the Property. This amount equates to 42.2% of the total equity. The Real Estate Company intends to implement a value-add strategy in which it will renovate both the unrenovated and the partially renovated units. $7,606 per unit will be spent on the unrenovated units, with improvements including new stainless appliances, flooring, kitchen/bath fixtures, and countertops. $3,600 per unit will be spent on the partially renovated units, with improvements including new cabinets, countertops, and paint. The capex budget also contains $188,712 for deferred maintenance and $278,478 for exterior improvements. 68 units (which already have washer/dryer connections) are going to be fitted with washer/dryers at a cost of $700 per unit, and 120 units are going to be fitted with private yards at a cost of $1,200 per unit. The Real Estate Company is targeting a premium of $40 per month for the washer/dryers and $50 per month for the private yards, in addition to the premium that they expect for improving the quality of the unit interiors and the Property overall. The business plan calls for a five-year hold, at which point the Property is to be sold at a 6.00% exit cap for $42.3 MM ($137,422 per unit).
Below is a summary of the capital improvements budget:
| Common Area/Exterior Improvements/Deferred Maintenance | # of Units | Total | Per Unit |
| Monument Signage | 308 | $20,000 | $65 |
| Landscaping | 308 | $25,000 | $81 |
| HVAC Repair/Replacement | 308 | $93,333 | $303 |
| Boilers | 308 | $40,000 | $130 |
| Grind Trip Hazards | 308 | $2,500 | $8 |
| Landings Repair | 308 | $16,000 | $52 |
| Parking Lot Restripe | 308 | $8,500 | $28 |
| Total Common Area/Exterior Improvements | $205,333 | $667 | |
| Unrenovated Units | |||
| Appliances | 117 | $167,427 | $1,431 |
| Flooring | 117 | $187,200 | $1,600 |
| Cabinets | 117 | $117,000 | $1,000 |
| Countertops | 117 | $140,400 | $1,200 |
| Ceiling Fans | 117 | $29,250 | $250 |
| Hardware | 117 | $20,475 | $175 |
| Kitchen/Bath Fixtures | 117 | $17,550 | $150 |
| Interior Labor | 117 | $58,500 | $500 |
| Lighting Fixtures | 117 | $20,475 | $175 |
| Indoor Paint | 117 | $70,200 | $600 |
| Tile Backsplash | 117 | $43,875 | $375 |
| Tub Resurfacing | 117 | $17,550 | $150 |
| Total Interior Improvements | $889,902 | $7,606 | |
| Partially Renovated Units | |||
| Carpet | 191 | $76,400 | $400 |
| Cabinets | 191 | $191,000 | $1,000 |
| Countertops | 191 | $229,200 | $1,200 |
| Interior Labor | 191 | $76,400 | $400 |
| Indoor Paint | 191 | $114,600 | $600 |
| Partially Renovated Units Subtotal | $687,600 | $3,600 | |
| Unspecified | |||
| Private Yards | 120 | $144,000 | $1,200 |
| Washer/Dryer Sets | 68 | $47,600 | $700 |
| Total Unspecified | $191,600 | ||
| Contingency (10%) | 308 | $197,444 | $641 |
| CM Fee (7%) | 308 | $152,031 | $494 |
| Grand Total | $2,323,910 | $7,545 |
These amounts are subject to change at the discretion of the Real Estate Company
The Parks at Walnut (the "Property") was built in 1979. The Property contains 234,132 rentable square feet and is comprised of 25 individual residential structures, along with a resident business center, two swimming pools, barbeque grilling stations, community picnic areas, controlled access gates, and convenient laundry facilities. It is within close proximity to upscale shopping centers and mixed-use developments like NorthPark Center and the Galleria, which is a top tourist destination for food, shopping and entertainment. The Property is highly accessible to D-FW Airport, the fourth-largest airport in the world, which is also the hub for American Airlines headquartered near the airport. As of now, the Property is a solidly performing multifamily asset, achieving an occupancy rate of around 94%. The unit mix is as follows:
In-Place/Stabilized Unit Mix:
| Unit Type | # of Units | Unit Size (square feet) | In-Place Rent | Post-Reno Rent |
| Studio | 48 | 484 | $736 | $822 |
| 1 Bed, 1 Bath | 112 | 650 | $812 | $925 |
| 2 Bed, 1 Bath | 48 | 814 | $984 | $1,099 |
| 2 Bed, 2 Bath | 32 | 889 | $1,070 | $1,150 |
| 2 Bed, 2 Bath | 48 | 950 | $1,161 | $1,250 |
| 2 Bed, 3 Bath | 20 | 1249 | $1,349 | $1,471 |
| Total/Averages | 260 | 760 | $943 | $1,045 |
All rents are net effective
Post-reno rents do not include $50 monthly premium for private yards or $40 monthly premium for in-unit washer/dryer
Lease Comps
| Estancia | Riverwalk | The View at Lake Highlands | Brooklyn @ 9670 | Total/Averages | Subject | |
| Units | 220 | 166 | 292 | 256 | 233 | 308 |
| Year Built | 1981 | 1981 | 1969 | 1980 | 1977 | 1979 |
| Average SF | 934 | 846 | 797 | 708 | 821 | 760 |
| Average Rental Rate | $1,070 | $1,095 | $1,011 | $993 | $1,042 | $1,045 |
| Average $/SF | $1.15 | $1.30 | $1.27 | $1.40 | $1.28 | $1.38 |
| Distance from Subject (mi.) | 0.8 miles | 0.6 miles | 1.0 miles | 1.9 miles | 1.0 miles |
All rents are net effective
Subject rents do not include $50 monthly premium for private yards or $40 monthly premium for in-unit washer/dryers
Sales Comps
| Estancia | Lavera at Lake Highlands | The View at Lake Highlands | Alista | The Beverly | Esencia | Total/Averages | Subject | |
| Date | Jul-19 | Jun-18 | On the Market | Jan-19 | May-18 | Under Contract | Aug-20 | |
| Units | 220 | 280 | 292 | 333 | 200 | 200 | 254 | 308 |
| Year Built | 1981 | 1969 | 1969 | 1970 | 1979 | 1981 | 1975 | 1979 |
| Purchase Price | $24,100,000 | $30,000,000 | $34,500,000 | $36,000,000 | $23,800,000 | $24,000,000 | $28,733,333 | $30,800,000 |
| $/Unit | $109,545 | $107,142 | $118,000 | $108,108 | $119,000 | $120,000 | $113,632 | $100,000 |
| Distance from Subject | 0.8 miles | 3.5 miles | 1.0 miles | 2.7 miles | 2.5 miles | 10.7 miles | 3.5 miles |
Market Analysis
The Property is located in Dallas, Texas. Dallas ranks as the #1 large city “2018 Best Cities for Job Growth”, and the Dallas metro population grew 10.9% from 2012 to 2017. The Property is 5 miles southwest of Medical City, which is one of the most prominent hospitals in DFW with more than 1,500 physicians and 876 beds.
The Property is within close proximity to upscale shopping centers and mixed-use developments like NorthPark Center and the Galleria, which is a top tourist destination for food, shopping and entertainment. The Property is highly accessible to D-FW Airport, the fourth-largest airport in the world, which is also the hub for American Airlines headquartered near the airport.
The median income of the area is $69,063 with a growth rate of 13.7%, expecting to reach $78,536 by 2025. The Property is near the “Platinum Corridor”, which encompasses the highest inventory of office building submarkets in the D-FW Metroplex. Situated eight miles west of the Project, the Platinum Corridor is one of the most prevalent office markets in the DFW Metroplex, with 50 million square feet of office space and more than 60,000 direct jobs.
The Property is located in Richardson Independent School District, a highly sought-after school district. In fact, this Property is directly adjacent to the Audelia Creek Elementary School, making the location extremely convenient for families with young children.
The Property also benefits from its close proximity to D-FW’s economic engine, the Telecom Corridor. More than 5,700 companies, including significant players such as State Farm, AT&T, Alcatel-Lucent, Ericsson, Verizon, Samsung, Texas Instruments, and MetroPCS, have a presence in the area. The Telecom Corridor also contains over 25 million square feet of office space and accounts for over 130,000 jobs.
| Sources of Funds | Amount |
|---|---|
| Debt | $23,100,000 |
| Equity | $11,993,784 |
| Total Sources of Funds | $35,093,784 |
| Uses of Funds | Amount |
| Purchase Price | $30,800,000 |
| Escrows/Prepaids | $718,906 |
| Closing Costs to Buyer | $280,000 |
| Loan Closing Costs | $288,750 |
| Capital Reserves | $2,390,128 |
| Other Reserves | $308,000 |
| Partnership Fees | $308,000 |
| Total Uses of Funds | $35,093,784 |
Please note that the Sponsor's equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor. Additionally, the numbers represented above can change prior to closing depending on final loan proceeds, property condition assessments, appraisals, final closing costs, and other lendermandated expenses. The Manager reserves the right to allocate Company resources in a manner that the Manager determines will best maximize returns and minimize risk depending on current market trends.
The expected terms of the debt financing are as follows:
- Lender: CBRE
- Estimated Proceeds: $23,100,000
- Estimated Rate: 3.06%
- Amortization: 30 years
- Term: 12 years
- Interest Only: Three years
- Exit Fee: None
- Prepayment: Defeasance
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.
The Real Estate Company intends to make distributions as follows:
- Pari passu, all excess operating cash flows to an 8.0% IRR to investors;
- 80.0% / 20.0% (80.0% to investors / 20.0% to promote) 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 LLC agreement, in addition to any member loans or returns due on member loans).
Distributions are expected to start in January 2021 and are projected 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. The Real Estate Company will receive a promote as indicated above, and a portion of this promote may be received by RM Admin for administrative services.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Effective Gross Revenue | $3,353,163 | $3,712,605 | $4,265,031 | $4,395,813 | $4,512,774 |
| Total Operating Expenses | $1,923,532 | $2,022,509 | $1,974,530 | $2,018,783 | $2,063,509 |
| Net Operating Income | $1,429,631 | $1,690,097 | $2,290,502 | $2,377,030 | $2,449,265 |
Certain fees and compensation will be paid over the life of the transaction; please refer to Real Estate Company materials for details. The following fees and compensation will be paid(1)(2):
| Type of Fee | Amount of Fee | Received By | Paid From | Notes |
|---|---|---|---|---|
| Acquisition Fee | $308,000 | Real Estate Company | Capitalized Equity Contribution | 1.0% of the Property purchase price |
| Construction Management Fee | 7.0% of costs | Real Estate Company | Capitalized Equity Contribution |
| Type of Fee | Amount of Fee | Received By | Paid From |
|---|---|---|---|
| Administrative Services Fee | 1.0% of amount invested into Parks at Walnut RM, LLC | RM Admin(2) | Distributable Cash |
| Asset Management Fee | 1.0% of Effective Gross Income | Real Estate Company | Distributable Cash |
| Property Management Fee | 3.0% of Effective Gross Income | FPI Management | Distributable Cash |
(1) Fees may be deferred to reduce impact to investor distributions
(2) RM Technologies operates the RealtyMogul platform. RM Technologies charges a fixed, non-percentage based fee for Real Estate Companies to use the marketplace.
(3) RM Admin will be providing the following services:(a) responding to inbound investor inquiries regarding how to subscribe to the Project, (b) distribution of all annual tax forms (after receipt of same from Project Sponsor), (c) processing distributions that are payable from Parks at Walnut RM, LLC to Investors, however, RM Admin will not be deemed to have custody of client funds, (d) distribution of all quarterly reports (after receipt of same from Project Sponsor) and (e) summarizing sponsor information on property performance, responding to investor inquiries regarding sponsor performance information as well as the real estate market generally.
The content on this detail page was produced by the Sponsor or an affiliate thereof. The Sponsor is under no obligation to update this detail page. None of the opinions expressed on this detail page are the opinions of RealtyMogul and they are not endorsed by RealtyMogul. Assumptions and projections included in this detail page are not reflective of the position of RealtyMogul or any other person or entity other than the Sponsor’s investment vehicle (“Investment Entity”) or its affiliates.
The preceding summary of principal terms of the offering is qualified in its entirety by reference to the more complete information about the offering contained in the offering documents, including, without limitation, the Private Placement Memorandum, Operating Agreement, Subscription Agreement and all exhibits and other documents attached thereto or referenced therein (collectively, the "Investment Documents"). This summary is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment. In the event of an inconsistency between the preceding summary and the Investment Documents, investors should rely on the content of the Investment Documents.
There can be no assurance that the methodology used for calculating targeted IRR is appropriate or adequate. Target IRR is presented solely for the purpose of providing insight into the Investment Entity’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Investment Entity’s performance. Targeted IRR is not a predictor, projection or guarantee of future performance. There can be no assurance that the Investment Entity’s targets will be met or that the Investment Entity will be successful in identifying and investing in investment opportunities that would allow the Investment Entity to meet these return parameters. Target returns should not be used as a primary basis for an investor’s decision to invest in the Investment Entity. Please see the applicable Investment Documents for disclosure relating to forward-looking statements.
All forward–looking statements attributable to the Sponsor or persons acting on its behalf apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in this summary and the Investment Documents. Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
The interests in the Investment Entity will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon exemptions contained in Rule 506(b) or 506(c) of Regulation D as promulgated under the Securities Act. In addition, the interests will not be registered under any state securities laws in reliance on exemptions from registration. Such interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption.
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