The submarket has seen less than 500 units constructed over the last 30 years. Interior renovations and common area upgrades will bring the Property to a modern finish and expand the potential renter base due to the limited options of modernized buildings in the submarket. Comparable properties of newer vintages in the area have a large gap to in-place rents at Upland. Parkton has a $400+ premium to the Property. This large gap in rents shows the upside potential at the Property.
The previous owner successfully won a tax appeal in the state of GA. Due to tax code 299C, the Property will not be reassessed for 2 additional years. The Real Estate Company's tax professionals believe they will be able to keep the current valuation without being reassessed on the transaction. This gives ZMR an attractive tax basis for the first 2 years of ownership.
Due to favorable debt markets, Upland Townhomes has the unique ability to use debt to fund all capital expenditures at the Property. The ZMR team plans to make significant renovations to bring the Property to a higher level of quality. The scope of renovations can be reduced at no penalty and unused CapEx can be extinguished at the end of the future funding period.
$40,100,000
ZMR Capital
Founded in 2013 by Zamir Kazi, ZMR Capital (the "Real Estate Company") is an affiliate of Berkshire Property Holdings. The Real Estate Company is an opportunistic real estate investment firm focused on the acquisition and re-development of value-add multifamily assets in primary, secondary, and emerging markets across the United States. The team of dedicated real estate professionals brings over 60 years of combined experience in commercial real estate acquisition, disposition, investment analysis, asset management, development, and construction. ZMR Capital's goal is to identify opportunities and create value in an ever-evolving commercial real estate market while providing investors with long-term, risk-adjusted investment returns.
https://zmrcapital.com/-
Zamir KaziCEO
Zamir is responsible for the overall operations and management of ZMR Capital, as well as overseeing the origination, structuring, and asset management of all of ZMR Capital’s investment activities. Zamir has overseen over 36 successful real estate transactions for ZMR Capital. 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 businesses 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 ZMR Capital Property Holdings' success.
ZMR Capital Track Record
| Property | City, State | Asset Type | Acq Date | Units or SF | Purchase Price | Sale Price | Realized IRR |
| Park Place Apartments | Fort Meyers | Multi-Family | 6/8/2021 | 338 | $44,500,000 | N/A | |
| Chimney Hill | Dallas/Fort Worth | Multi-Family | 5/18/2021 | 240 | $33,250,000 | N/A | |
| District Flats Off Dobson | Mesa | Multi-Family | 5/18/2021 | 112 | $18,200,000 | N/A | |
| Tides on 25th | Phoenix | Multi-Family | 5/21/2021 | 240 | $40,625,000 | N/A | |
| Walnut Portfolio | Dallas/Fort Worth | Multi-Family | 9/9/2020 | 568 | $56,800,000 | N/A | |
| Las Lomas | Dallas/Fort Worth | Multi-Family | 12/19/2019 | 224 | $18,150,000 | N/A | |
| Park at Peachtree Hills | Atlanta | Multi-Family | 12/19/2019 | 118 | $16,138,000 | N/A | |
| Camelot Gardens | Jacksonville | Multi-Family | 9/1/2019 | 691 | $40,000,000 | N/A | |
| Alexandria Landings | Atlanta | Multi-Family | 12/5/2018 | 472 | $19,700,000 | $37,500,000 | 35% |
| Desert Peaks | El Paso | Multi-Family | 12/23/2018 | 175 | $6,500,000 | $10,900,000 | 30% |
| Phillippi Shores | Sarasota | Multi-Family | 4/1/2018 | 28 | $2,005,000 | $3,600,000 | 60% |
| Willow Bend | Orlando | Multi-Family | 12/16/2016 | 188 | $8,500,000 | $13,500,000 | 35% |
| Pine View | Orlando | Multi-Family | 3/1/2016 | 91 | $2,600,000 | $4,000,000 | 86% |
| Riviera Villas | Orlando | Multi-Family | 7/30/2015 | 40 | $1,250,000 | $2,200,000 | 52% |
| Park Sands | Tampa | Multi-Family | 8/1/2015 | 28 | $1,400,000 | $1,650,000 | 27% |
| Lakeland/Tampa/St.Pete Mixed Unit Portfolio | Tampa/Lakeland/St Petersburg | Multi-Family | 2012-2015 | 150 | $11,000,000 | $15,000,000 | 30%+ |
| Orlando Mixed Unit Portfolio | Orlando | Multi-Family | 2012-1015 | 150 | $11,250,000 | $16,000,000 | 30%+ |
| Totals | 3,853 | $331,868,000 | $104,350,000 |
The above bios and track record were provided by ZMR Capital and have not been independently verified by RealtyMogul.
Due to the low amount of development in the area and the high barrier to entry in this market, Upland Townhomes is a prime target for a value-add renovation. The Property will be able to compete with newer construction in the area, by bringing the units to a more modern renovation level. ZMR has identified the building as a target acquisition ready for significant upgrades to both the interiors and exterior. These upgrades will bring an attractive townhome-style building with modern finishes to a market that has not seen development over the last 30 years.
The renovation plan will include:
- Interior: Upgraded appliances in the kitchen, vinyl plank flooring, new carpet, updated fixtures, new cabinets, W/D appliances, and an updated bathroom.
- The planned upgrades will both modernize the interior and have a more appealing use of space for the cabinets and countertops.
- Exterior: A clubhouse amenity space and additional common area upgrades including a picnic area, dog park, and upgraded landscaping will be added to bring the Property more in line with newer vintage competitors in the area
CapEx Breakdown:
| $ Amount | Per Unit | |
| Interior Renovations | ||
| Appliances | $918,600 | $2,640 |
| Flooring | $250,800 | $721 |
| Cabinets | $369,600 | $1,062 |
| Countertops | $859,200 | $2,469 |
| Interior Redevelopment | $498,300 | $1,432 |
| Plumbing | $39,600 | $114 |
| Total Interior Renovation Costs | $2,936,100 | $8,437 |
| Exterior Renovations | $ Amount | Per Unit |
| Clubhouse | $750,000 | $2,155 |
| Add BBQ Station With pergola at courtyard by leasing office | $40,000 | $115 |
| Add picnic area/additional amenity at courtyard by playground | $150,000 | $431 |
| Pool Furniture | $31,500 | $91 |
| Add Dog Park | $28,500 | $82 |
| Pool Deck Paver overlay | $50,000 | $144 |
| Designer Fees | $15,000 | $43 |
| EMP Drawing & Permits | $60,000 | $172 |
| Landscaping | $70,000 | $201 |
| Plumbing | $120,000 | $345 |
| Windows Repairs | $75,000 | $216 |
| Brick Repairs | $32,400 | $93 |
| Gutter Repairs | $12,000 | $34 |
| Tree Trimming | $28,000 | $80 |
| Pool Deck Repairs | $18,500 | $53 |
| Exterior Lighting | $37,800 | $109 |
| Parking Lot Repairs | $60,900 | $175 |
| Carpentry | $22,000 | $63 |
| Irrigation Repairs | $15,000 | $43 |
| Pool Remarcite | $28,000 | $80 |
| Backyard patio repairs | $104,000 | $299 |
| Paint metal awnings and exterior doors | $116,000 | $333 |
| Exterior door replacement | $70,000 | $201 |
| Re-roof (10%of Property) | $71,900 | $207 |
| Pressure wash exterior buildings | $28,500 | $82 |
| Total Exterior Renovation Costs | $2,035,000 | $5,848 |
| Other Costs | $ Amount | Per Unit |
| Contingency | $515,110 | $1,480 |
| CM Fee | $396,635 | $1,140 |
| Inflation | $115,265 | $331 |
| W/D Connections (72 Units) | $180,000 | $517 |
| Total Other | $1,207,010 | $3,468 |
| Grand Total | $6,178,110 | $17,753 |
These amounts are subject to change at the discretion of the Real Estate Company.
The Property is a garden-style community built in 1970 and consists of 348 townhome-style units. The Property is strategically located within Northwest Atlanta's preeminent Thornton Road and Fulton Industrial economic area along the I-20 western corridor near I-285 S.
The location offers a quick commute to major Atlanta job hubs. The local corridor’s workforce has grown with over 28,000 jobs and a payroll of $2.4B with 4.1M SF of industrial space being delivered since 2019. In May of 2020 Amazon signed a lease at the Chattahoochee Logistics Center to occupy an entire 1.1M SF facility in the area.
Unit Mix
| Unit Type | # of Units | Avg SF/Unit | Avg Rent (In-Place) | Avg Rent (Stabilized) | Post-reno rent per SF |
| 1x1 (Classic) | 55 | 706 | $828 | $940 | $1.33 |
| 1x1 (Renovated) | 89 | 706 | $850 | $940 | $1.33 |
| 2x1 (Classic) | 37 | 817 | $896 | $980 | $1.20 |
| 2x1 (Renovated) | 83 | 817 | $924 | $980 | $1.20 |
| 2x1.5 (Classic) | 33 | 1040 | $961 | $1,125 | $1.08 |
| 2x1.5 (Renovated) | 35 | 1040 | $998 | $1,125 | $1.08 |
| 3x1.5 (Classic) | 7 | 1225 | $1,053 | $1,250 | $1.02 |
| 3x1.5 (Renovated) | 9 | 1225 | $1,169 | $1,250 | $1.02 |
| Total/Averages | 348 | 833 | $907 | $1,004 | $1.22 |
Lease Comparables
| Sierra Forest | Azure at Riverside | 300 Riverside | The Parkton | Averages | Subject | |
| Year Built | 1973 | 1973 | 1987 | 1990 | 1981 | 1970 |
| # of Units | 272 | 204 | 220 | 137 | 208 | 348 |
| Average Rental Rate | $940 | $969 | $1,004 | $1,596 | $1,127 | $955 |
| Average Unit Size | 900 | 1,007 | 1,028 | 1,109 | 1,011 | 833 |
| Average $/SF | $1.04 | $0.96 | $0.98 | $1.44 | $1.11 | $1.15 |
| Occupancy | 97% | 93% | 96% | 97% | 96% | 97% |
| Distance from subject | 1.0 mi | 2.5 mi | 1.0 mi | 0.1 mi | 1.2 mi | |
| $/Unit (1x1) | $806 | $871 | $950 | $1,450 | $1,019 | $940 |
| SF (1x1) | 700 | 777 | 1,005 | 794 | 819 | 706 |
| $/SF (1x1) | $1.15 | $1.12 | $0.95 | $1.83 | $1.26 | $1.33 |
| $/Unit (2x2) | $907 | $927 | $1,011 | $1,525 | $1,093 | $1,125 |
| SF (2x2) | 900 | 1,072 | 1,090 | 1,176 | 1,060 | 1,040 |
| $/SF (2x2) | $1.01 | $0.86 | $0.93 | $1.29 | $1.02 | $1.08 |
| $/Unit (3x2) | $1,109 | $1,360 | $1,292 | $1,254 | $1,250 | |
| SF (3x2) | 1,100 | 1,296 | 1,315 | 1,237 | 1,225 | |
| $/SF (3x2) | $1.01 | $1.05 | $0.98 | $1.01 | $1.02 |
Costar data as of 4/15/2021
Sales Comparables
| 670 Thorton | Avonlea Westside | Cumberland Pointe | Forest Glen | FortyThree 75 | Averages | Subject | |||
| Year Built | 1989/2012 | 1982 | 1971/2013 | 1987 | 1974 | 1981 | 1970 | ||
| # of Units | 344 | 297 | 439 | 264 | 260 | 321 | 348 | ||
| Average Unit Size | 904 | 1066 | 1150 | 1093 | 1487 | 1140 SF | 833 SF | ||
| Sale Price | $40,800,000 | $49,500,000 | $66,000,000 | $30,800,000 | $32,000,000 | $43,820,000 | $40,100,000 | ||
| $/Unit | $118,605 | $166,667 | $150,342 | $116,667 | $123,077 | $135,071 | $115,230 | ||
| $/SF | $131.2 | $156.3 | $130.8 | $106.7 | $82.8 | $121.5 | $119.6 | ||
Market Overview
Atlanta, the economic capital of the Southeast and a global business hub, is one of the fastest-growing metros with the 10th largest GDP in the United States. The Property's suburban, yet close-in location offers connectivity to all of Atlanta's top job hubs, including Downtown, Midtown, Buckhead, the Platinum Triangle, Perimeter Center, and Hartsfield-Jackson International Airport.
The Atlanta MSA has been ranked the #1 moving destination in the nation by Penske in 2019 and has consistently outperformed the US in year-over-year rental growth. Since early 2018, Atlanta’s unemployment rate has remained below the national average. Private sector employment grew by 56,530 jobs in 2019, the highest increase since 2016. Thirty-one percent of Atlanta jobs are office-using, well above the national average (24%), and is home to 16 Fortune 500 companies.
Submarket Overview
Atlanta ranks in the top five for industrial space nationally with 518+ industrial buildings in South Fulton County. South Fulton County is an ideal location for companies looking to expand their e-commerce and industrial hubs and large-scale facilities. Upland Townhomes is located within the booming Fulton Industrial Corridor, offering nearly 30K industrial jobs and approximately 52M SF of industrial warehouse/distribution space. The corridor’s workforce has grown with over 28,000 jobs and a payroll of $2.4B. 4.1M SF of industrial space has been delivered since 2019. In May of 2020 Amazon signed a lease at the Chattahoochee Logistics Center to occupy the entire 1.1M SF facility.
| Sources of Funds | $ Amount | $/Unit |
| Debt | $36,130,000 | $103,822 |
| GP Investor Equity | $1,217,742 | $3,499 |
| LP Investor Equity | $10,959,676 | $31,493 |
| Total Sources of Funds | $48,307,418 | $138,814 |
| Uses of Funds | $ Amount | $/Unit |
| Purchase Price | $40,100,000 | $115,230 |
| Escrows/Prepaids | $88,358 | $254 |
| Closing Costs(1) | $390,000 | $1,121 |
| Loan Closing Costs | $541,950 | $1,557 |
| Capital Reserve | $6,178,110 | $17,753 |
| Other Reserves | $608,000 | $1,747 |
| Partnership Fees | $401,000 | $1,152 |
| Total Uses of Funds | $48,307,418 | $138,814 |
Please note that ZMR Capital's equity contribution may consist of friends and family equity and equity from funds controlled by ZMR Capital. Additionally, the numbers represented above can change prior to closing depending on final loan proceeds, property condition assessments, appraisals, final closing costs, and other lender-mandated expenses.
(1) RM Technologies operates the RealtyMogul platform. RM Technologies charges a fixed, non-percentage-based fee for real estate companies to use the marketplace. An estimate of this fee is included in the Closing Costs and is intended to be capitalized into the transaction at the discretion of the Manager.
The expected terms of the debt financing are as follows:
- Lender: HGI Commercial
- Term: 3 + 1 + 1
- Loan-to-Cost: 75%
- Estimated Proceeds: $36,130,000
- Interest Type: Floating
- Spread Above One-Month Libor: 3.25% Floor of 0.25%
- Interest-Only Period: Term
- Amortization: None
- Prepayment Terms: 24 Months interest then no prepayment penalty
- Extension Requirements: Property having a minimum underwritten 6.75% debt yield extension test for the 1st extension and 7.0% debt yield extension test for the 2nd extension.
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.
A substantial portion of the total acquisition for the Property will be paid with borrowed funds. The use of borrowed money to acquire real estate is referred to as leveraging. Leveraging increases the funds available for investment or development purposes, on the one hand, but also increases the risk of loss on the other. If the Company were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Company could lose its investment in its property.
ZMR Capital intends to make distributions from Upland RM, LLC as follows:
- To the Investors, pari passu, all operating cash flows to an 8.0% IRR;
- 80% / 20% (80% to Investors / 20% to Promote) to a 12.0% IRR;
- 70% / 30% (70% to Investors / 30% to Promote) to a 15.0% IRR;
- 65% / 35% (65% to Investors / 35% to Promote) of excess cash flow thereafter.
ZMR Capital intends to make distributions to investors after the payment of both company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).
Distributions are expected to start in November 2021 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of ZMR Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves. ZMR Capital will receive a promote as indicated above, and a portion of this promote may be received by RM Admin, LLC.
| Cash Flow Summary | ||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
| Effective Gross Revenue | $3,666,409 | $4,108,400 | $4,647,559 | $4,847,540 | $5,006,889 | |
| Total Operating Expenses | $1,633,228 | $1,674,745 | $1,711,423 | $1,964,958 | $1,998,522 | |
| Net Operating Income | $2,033,181 | $2,433,655 | $2,936,136 | $2,882,583 | $3,008,367 | |
| Project-Level Cash Flows | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | -$12,177,418 | $800,009 | $962,507 | $1,180,218 | $940,843 | $23,759,640 |
| Investor-Level Cash Flows* | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | -$5,000,000 | $278,481 | $345,202 | $434,593 | $336,306 | $8,498,673 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment* | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | -$50,000 | $2,785 | $3,452 | $4,346 | $3,363 | $84,987 |
*Returns are net of all fees including RM Admin's 1.0% administrative services fee.
NO ASSURANCE OF RETURN: The Company's pro-forma projections are based on assumptions regarding future events, such as the timing and extent of the recovery of the residential market and the stabilization of the debt markets. While the Manager believes that these assumptions are reasonable and achievable, the likelihood of its occurrence is subject to many factors that are not within the control of the Company or its Manager and that could impair the ability of the Company to meet its projections.
Certain fees and compensation will be paid over the life of the transaction; please refer to ZMR Capital's materials for details. The following fees and compensation will be paid(1)(2)(3):
| One Time Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Acquisition Fee | 1.0% of Purchase Price | ZMR Capital | Capitalization |
| Development Fee | 7.0% of Hard Costs | ZMR Capital | Budgeted CapEx |
| Recurring Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Asset Management Fee | 1.5% of Revenue | ZMR Capital | Cash Flows |
| Administrative Services Fee | 1.0% of Equity* | RM Admin(3) | Cash Flows |
*Only applies to equity raised through the RealtyMogul Platform
(1) Fees may be deferred to reduce impact to investor distributions.*Only applies to equity raised through the RealtyMogul Platform
(2) RM Technologies operates the RealtyMogul platform. RM Technologies charges a fixed, non-percentage-based fee for real estate companies to use the marketplace. An estimate of this fee is included in the Closing Costs and is intended to be capitalized into the transaction at the discretion of the Manager.
(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 Upland 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 provided 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.
All investing activities risk the loss of capital. There can be no assurance that investors will not suffer significant losses. No guarantee or representation is made that investment objectives of the Investment Entity will be achieved. You should not subscribe to purchase interests in the Investment Entity unless you can readily bear the consequences of such loss.
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