Haven at Charlotte is located in Nashville, Tennessee. According to Forbes.com, Nashville ranks as the 6th best city in the United States for job growth, and the Urban Land Institute lists Nashville as the 7th most attractive real estate investment and development market in the country. Nashville MSA's domestic product has grown an average of 4.9% over the past five years, far outpacing state and national averages. Its diverse economic base has become a regional economic growth engine with an average employment growth of 3.7% annually from 2015 to 2020 and has added 165,000+ jobs in the same time period.
Due to the creative financing with the ground lease, Haven at Charlotte is lowly levered with only its +/- 51% loan-to-cost construction loan requiring repayment at refinance or sale. The 99-year ground lease does not require prepayment at refinance or sale, further reducing future sale or refinance risk.
Haven at Charlotte’s basis is significantly lower than recent trades in Nashville and similar markets, affording equity investors significant downside protection on their investment. Additionally, the projected sale number in four years is in line with the comp set of today.
Headquartered in Houston, Texas, Guefen Development specializes in multifamily development of Class A multifamily communities (conventional and student housing) in the Sun Belt States.
Guefen Development is one of Houston's most prominent, vertically integrated real estate development and construction companies. With a focus in multi‐family ownership, development, and construction, Guefen Development has extensive experience in both urban and suburban projects. Since 2005, Guefen and its principals have been involved in a wide variety of projects—garden, mid‐rise, and highrise—totaling in excess of 7,000 Class A multi‐family units and more than $1 billion in total investment.https://guefen.com/
Guillermo is the founder of Guefen and has over 30 years of experience in all phases of residential and commercial development, acquisition, project management, and construction. His diverse expertise in the industry includes residential and commercial development and construction and property management throughout Texas, Nevada, Florida, Arkansas, Arizona, California, Illinois, Colorado, and New Mexico. Guillermo is a member of the Board of Trustees for the Houston Holocaust Museum and has served on the advisory board of the Houstonian, Bank of Texas, and the Houston JCC. Guillermo graduated from the Universidad Autonoma del Estado de Mexico with a Bachelor’s Degree in Business Administration.
David is a principal of Guefen. He was previously a Managing Director at Stout Risius Ross Advisors, LLC where he specialized in real estate investment banking and provided a broad range of financing, advisory, and investment services to real estate operating and development companies. This experience means David is well-versed in providing access to equity, debt, mezzanine, and mortgage financing, restructurings, and recapitalizations. Prior to joining SRR, Mr. Kulkarni was a Senior Managing Director of HFBE Capital, LP. where he raised more than $400 million in institutional equity capital, which financed more than $1 billion in real estate property acquisitions and new developments. He also closed over $1 billion in merger and acquisition transactions. He received his Bachelor’s in Business Administration in Accounting and Master’s of Business Administration in Finance from the University of Houston.
The above bios and track record were provided by Guefen Development and have not been independently verified by RealtyMogul.
The business plan is to develop a Class A multifamily project for $297,000 per unit in a highly amenitized, mixed-use district, home to the rapidly growing healthcare and technology sectors in Nashville. The Site is under contract for purchase from the current landowner for $10.0MM or $67/SF at a discount compared to recent comparable land trades of $250/SF. To monetize this material discount, the Sponsor will sell the land to Safehold Inc. for $34.0MM and lease it back for a customary 99-year ground lease term at 0.95% over the 30-year treasury (approximately 3.4% fixed), which will be set at closing. Investors will benefit from the $24MM of profit generated from the sale of the ground lease. The 99-year ground lease is Freddie and Fannie compliant and does not require repayment. Deal capitalization includes a $55.4MM construction loan (50.5% LTC), $34.0MM in ground lease funds, $10.0MM in preferred equity, $12.7MM in LP equity, and $7.6MM in sponsor equity. Construction is anticipated to complete in 24 months and will stabilize 12 months later in month 36. The Project is anticipated to be sold in month 48 for gross sales proceeds of $117MM or $319,000 per unit representing a 4.75% cap rate on tax-adjusted NOI.
|Acquisition Cost||$ Amount||Per Unit||Per SF|
|Total Acquisition Costs||$10,338,889||$28,019||$36.67|
|Hard Costs||$ Amount||Per Unit||Per SF|
|Base hard costs||$73,301,800||$198,650||$260.00|
|GC hard cost contingency||$1,832,545||$4,966||$6.50|
|Owners hard cost contingency (% of hard costs)||$1,832,545||$4,966||$6.50|
|Total Hard Costs||$80,815,235||$219,011||$286.65|
|Soft Costs||$ Amount||Per Unit||Per SF|
|Architecture & Engineering||$1,514,000||$4,103||$5.37|
|FF&E (i.e. club, pool, a/v, etc.)||$350,000||$949||$1.24|
|Cable & internet build out||$950,000||$2,575||$3.37|
|Start up expenses||$200,000||$542||$0.71|
|Project team incentive bonus||$100,000||$271||$0.35|
|Working capital and consultants||$200,000||$542||$0.71|
|Property taxes (during construction)||$400,000||$1,084||$1.42|
|Overhead reimbursement fee||$350,000||$949||$1.24|
|Soft cost contingency||$313,200||$849||$1.11|
|Development fees (% of Costs)||$4,201,731||$11,387||$14.90|
|Total Soft Costs||$10,778,931||$29,211||$38.23|
|Financing Costs||$ Amount||Per Unit||Per SF|
|Bank origination fee||$415,500||$1,126||$1.47|
|Interest and Operating reserve||$3,000,000||$8,130||$10.64|
|Title & closing||$400,000||$1,084||$1.42|
|Capital Placement costs and fees||$256,462||$695||$0.91|
|Ground Lease construction reserve||$2,890,000||$7,832||$10.25|
|Total Financing Costs||$7,311,962||$19,816||$25.94|
The Site is situated just west of midtown Nashville next to the trendy OneC1ty mixed-use development district, a vibrant, active, and walkable neighborhood with public parks, plazas, courtyards, and gathering areas in addition to the green building design. The Site is currently under contract, and the resulting project will be 7 stories of residential over a 3 story podium garage.
|Unit Type||# of Units||Avg SF/Unit||Avg Rent||Rent per SF|
|Aertson Midtown||The Morris||The Shay||Crossroads||Comp Averages||Haven at Charlotte|
|Address||905 20th Ave S, Nashville||818 19th Ave, Nashville||9 City Pl, Nashville||803 Division St, Nashville||3025 Charlotte Ave|
|Average Rental Rate||$2,656||$2,821||$2,110||$2,680||$2,578||$1,987|
|# Units (1x1)||207||193||189||160||187||307|
|# Units (2x2)||101||78||50||62||73||62|
|Distance to Subject||1.7 miles||1.9 miles||0.3 miles||2.7 miles||1.7 Miles||N/A|
|Address||Submarket||Vintage||Units||Sale Date||Sale Price||$/unit||Cap Rate||Notes|
|3025 Charlotte Ave||Midtown||2024||369||Jul-25||$109,245,016||$296,057||5.15%||Subject Property (Basis)|
|3025 Charlotte Ave||Midtown||2024||369||Jul-25||$117,707,927||$318,992||4.75%||Subject Property (Exit)|
|1515 Demonbreun||Midtown||2016||430||Jun-21||$157,940,000||$367,302||N/A||Buyer - Camden Property Trust|
|803 Division St S||The Gulch||2018||238||Dec-19||$80,750,000||$339,286||4.00%||Seller - Alliance Residential
Buyer - Security Properties
|222 Stockyard St||Germantown||2020||342||Nov-20||$105,000,000||$307,018||N/A||Seller - Alliance Residential
Buyer - LivCor LLC
|9 City Blvd||Midtown||2018||276||Oct-19||$80,600,000||$292,029||N/A||Seller - Cambridge Holdings
Buyer - Carter-Haston
Nashville has experienced extreme economic and cultural growth in recent years, building off an existing diverse employment base. Healthcare, state government, higher education, music, tourism, publishing, and automotive industries have grown and expanded, propelling Nashville to become one of the highest-ranking cities for job growth. According to Forbes.com, Nashville ranks as the #6 best US city for job growth with employment growing annually by 3.4% over the last 5 years. This ranking puts Nashville ahead of larger cities such as Tampa and Houston, as well as regional competitors such as Louisville, Charleston, and Savannah. Furthermore, Nashville has become a destination for fortune 500 companies and real estate development with a low cost to do business and an attractive tax structure. Companies such as Amazon and Oracle have announced expansions and the addition of 13,500 jobs over the next few years.
The Haven at Charlotte development is located in the downtown Nashville submarket of ONEC1TY, a vibrant, active, and walkable neighborhood with public parks, plazas, courtyards, and gathering areas. It serves as a center of technology-enabled commercial, residential, research, and retail corridor catering to the idea that mindful healthy living can be made easy. ONEC1TY has access to nationally recognized teaching hospitals, medical schools, healthcare institutions, and universities conveniently located near the center of Nashville’s urban core. This area anchors the West Side’s innovation district catalyzing the established “Eds and Meds” and evolving technology sector of Nashville.
|Sources of Funds||$ Amount||$/Unit|
|GP Investor Equity||$1,984,502||$5,378|
|LP Investor Equity||$17,860,515||$48,402|
|Ground Lease Sale Proceeds||$34,000,000||$92,141|
|Total Sources of Funds||$109,245,016||$296,057|
|Uses of Funds||$ Amount||$/Unit|
|Total Uses of Funds||$109,245,016||$296,057|
The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(1) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services. Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
The expected terms of the debt financing are as follows:
- Lender: Citizens Bank
- Term: 4 Years
- Loan-to-Value(1): 50.5%
- Estimated Proceeds: $55,400,000
- Interest Type: Floating
- Spread Above One-Month LIBOR: 2.75%
- Interest-Only Period: 4 Years
- Amortization: 30 Years
(1) LTV includes the ground lease as equity. Please see page 27 in the project summary for additional information on the ground lease.
There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all. All of the Sponsor’s estimated 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 risk of loss. If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.
Guefen Development intends to make distributions from Haven at Charlotte Holdco, LLC as follows:
- To the Investors, pari passu, all operating cash flows to an 8.0% preferred return;
- 65% / 35% (65% to Investors / 35% to Promote) of excess cash flow to an 18% IRR;
- 50% / 50% (50% to Investors / 50% to Promote) of excess cash flow thereafter.
Guefen Development 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 August 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Guefen Development, who may decide to delay distributions for any reason, including maintenance or capital reserves. Guefen Development will receive a promote as indicated above, and a portion of this promote may be received by RM Admin, LLC for administrative services.
|Cash Flow Summary|
|Year 1||Year 2||Year 3||Year 4|
|Effective Gross Revenue||$0||$0||$4,029,262||$10,439,529|
|Total Operating Expenses||$0||$0||$3,604,071||$4,878,734|
|Net Operating Income||$0||$0||$425,191||$5,560,795|
|Project-Level Cash Flows|
|Year 0||Year 1||Year 2||Year 3||Year 4|
|Net Cash Flow||($19,845,016)||$0||$0||$475,517||$65,891,230|
|Investor-Level Cash Flows(1)|
|Year 0||Year 1||Year 2||Year 3||Year 4|
|Net Cash Flow||($5,000,000)||$0||$0||$113,158||$12,165,927|
|Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)|
|Year 0||Year 1||Year 2||Year 3||Year 4|
|Net Cash Flow||($50,000)||$0||$0||$1,132||$121,659|
Unlike debt, the ground lease does not require repayment and thus will be assumed by the next buyer. Accordingly, underwriting assumes that the sale proceeds pay off the construction loan with all remaining proceeds distributed to equity.
(1) Returns are net of all fees. Such Fees include fees paid to RM Admin, an affiliate of RealtyMogul, who charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor. Please see the Fees and Disclaimers sections and Disclaimers sections below for additional information concerning fees paid to RM Admin.
RM Technologies, LLC and its affiliates does not provide any assurance of returns. The content on this Page, including Sponsor’s pro forma projections, was provided by the Sponsor or an affiliate thereof. Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor. The assumptions and projections included in the content on this Page, including the Sponsor’s pro forma projections, are not reflective of the position of RM Technologies, LLC or any other person or entity other than the Sponsor or its affiliates. There can be no assurances that all or any of the Sponsor’s assumptions will be true, that actual performance will bear any relation to these hypothetical illustrations, or that the Sponsor’s investment objectives will be achieved. For additional information concerning the Sponsor’s assumptions and projections, and the significant risks involved in investing in real estate, please see the Disclaimers section below.
Certain fees and compensation will be paid over the life of the transaction; please refer to Guefen Development's materials for details. The following fees and compensation will be paid(1)(2)(3):
|Type of Fee||Amount of Fee||Received By||Paid From|
|Development Fee||4.0% of Total Costs||Guefen Development||JV|
|General Contractor Fee||5.0% of Total Hard Costs||General Contractor||JV|
|Overhead Reimbursement Fee||$350,000||Guefen Development||JV|
|Type of Fee||Amount of Fee||Received By||Paid From|
|Asset Management Fee||2.0% of EGI||Guefen Development||Cash Flow|
|Administrative Services Fee||1.0% of Equity*||RM Admin(3)||Cash Flow|
*Only applies to equity raised through the RealtyMogul Platform
(1) Fees may be deferred to reduce impact to investor distributions.
(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the RM Technologies, LLC’s proprietary Platform and receive Platform-related services. An estimate of this fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor. The Platform fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). RM Technologies LLC’s receipt of Platform fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
(3) RM Admin, an affiliate of RealtyMogul, charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor. RM Admin’s administrative services and fees are disclosed in the relevant operating agreement(s). RM Admin’s receipt of administrative fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
The content on this Page was provided by the Sponsor or an affiliate thereof. Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor. No part of the content and information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s offering materials. None of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.
The content on this Page, including of the principal terms of the Sponsor’s offering, is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s 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"). The content on this Page 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. The content on this page should not be used as a primary basis for an investor’s decision to invest. In the event of an inconsistency between the content on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents. The content on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the discretion of the Sponsor.
Assumptions and projections included in the content on this Page are not reflective of the position of RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates. There can be no assurance that the Sponsor’s methodology used for calculating any projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate. The Sponsor’s Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics, and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Targets are not a predictor, projection, or guarantee of future performance. There can be no assurance that the Sponsor’s Targets will be met or that the Sponsor will be successful in meeting these Targets. Target returns should not be used as a primary basis for an investor’s decision to invest.
This real estate investment is speculative and involves substantial risk. There can be no assurances that all or any of the assumptions will be true or that actual performance will bear any relation to the hypothetical illustrations herein, and no guarantee or representation is made that investment objectives of the Sponsor will be achieved. In the event that actual performance is below the Sponsor’s Targets, your investment could be materially and adversely affected, and there can be no assurance that investors will not suffer significant losses. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Please see the Sponsor’s Investment Documents for additional information, including the Sponsor’s discussion concerning risk factors.
Please see the applicable Investment Documents for disclosure relating to forward-looking statements. All forward-looking statements attributable to the Sponsor or its affiliates apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in 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 offered by the Sponsor will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement.”). 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 Private Placements on the RealtyMogul Platform are intended solely for “Accredited Investors,” as that term is defined Rule 501(a) of the Securities Act. Prospective investors must certify that they are Accredited Investors and provide either certain supporting documents or third party verification, and must acknowledge that they have received and read all investment materials.
RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the RM Technologies LLC’s proprietary Platform and receive Platform-related services. An estimate of this fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor. The Platform fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). RM Technologies LLC’s receipt of Platform fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
RM Admin, an affiliate of RealtyMogul, charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor. RM Admin’s administrative services and fees are disclosed in the relevant operating agreement(s). RM Admin’s receipt of administrative fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
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