Diversified Properties, LLC is a Montville, N.J.-based residential and commercial development and management company founded in 2000, specializing in value creation through the successful execution of multifamily, office, self-storage, retail, and industrial ground-up development and redevelopment projects throughout the northeastern United States. The sponsor utilizes its substantial in-house expertise in acquisitions, architectural and engineering design, land use, entitlements, construction, leasing, sales, and property management, within an agile and scalable operational structure to capitalize on opportunities in key growth markets. Diversified Properties, LLC has developed real estate valued at over $1.5 billion and boasts a portfolio valued in excess of $500 million.
With deep experience in multifamily development and management, Diversified Properties has successfully created dozens of multifamily communities comprising over 10,000 units across N.J., N.Y., PA, MD, and CT and, today manages an existing and development pipeline spanning 4,000 residential units across 10 diverse communities.
The company’s founder, Nicholas Minoia, has also brought over 750,000 square feet of office, self-storage, retail, and industrial space to the market since 2000 and today manages a portfolio comprised of over 350,000 square feet of commercial space that is home to over 50 commercial tenants and includes approximately 1,000 residential units.
Highlighting their leadership position in N.J.’s real estate community, the sponsor was recognized as one of the state’s Leaders in Real Estate, Construction and Design by NJBIZ. Founder Nicholas Minoia was also named to NJBIZ's Power 50 in Real Estate list in 2021, 2022, and 2023, was selected as a GlobeSt Real Estate Forum Multifamily Influencer in 2021, was named a Real Estate Influencer by ROI-NJ in 2022 and 2023 and made NJBIZ’s 2023 ICON Honors list.
Irondale at Wharton will be located in Wharton, N.J., a growing marketplace with a strong demand for housing. In 1902, Wharton, N.J. was re-named in honor of Joseph Wharton, an industrialist who was involved in mining, manufacturing, and education. He founded the Wharton School at the University of Pennsylvania. The site is proximate to New York City (less than one hour east), major employers, and numerous dining, shopping, and entertainment venues. Morris County boasts 13,000 acres that encompass 28 parks making it the largest county park system in NJ. The nearby New Jersey Highlands Region, a 60-mile stretch, offers area residents diverse recreational opportunities, abundant wildlife, and significant historic and scenic resources.
| Unit Type | # of Units | Avg SF/Unit | Avg Rent | Rent per SF |
| Studio | 4 | 540 | $1,600 | $2.96 |
| 1 BR (+ Den) | 39 | 798 | $2,350 | $2.94 |
| 2 BR | 11 | 1,080 | $2,550 | $2.36 |
| 1 BR (Affordable) | 1 | 815 | $943 | $1.16 |
| 2 BR (Affordable) | 4 | 900 | $1,074 | $1.19 |
| 3 BR (Affordable) | 1 | 1,003 | $1,250 | $1.25 |
| Total/Averages | 60 | 843 | $2,210 | $2.67 |
Lease Comparables
| Avalon Boonton | Meridia Transit Plaza | 34 Bank | Avalon Wharton | The Boulders at Rockaway | Woodmont West at Mount Arlington | Pondview Estates | Comp Averages | Irondale at Wharton | |
| Address | 1 Avalon Way | 1 W Dickerson St | 34 Bank Street | 111 E Dewey Ave | 10 Mount Pleasant Ave | 100 Fieldstone Drive | 100 Julia Drive | 47 Kossuth Street | |
| Year Built | 2017 | 2020 | 2021 | 2014 | 2006 | 2016 | 2017 | 2016 | 2023 |
| Units | 350 | 214 | 126 | 247 | 128 | 300 | 560 | 275 | 54 |
| Average Rental Rate | $3,062 | $1,914 | $2,033 | $2,723 | $2,260 | $2,843 | $2,853 | $2,675 | $2,335 |
| Average SF | 1081 | 817 | 852 | 1,160 | 1,009 | 1,146 | 1,409 | 1,068 | 836 |
| Average $/SF | $2.83 | $2.34 | $2.39 | $2.35 | $2.24 | $2.48 | $2.03 | $2.51 | $2.79 |
| # Units (Studio) | 72 | 7 | 40 | 4 | |||||
| $ (Studio) | $1,979 | $2,239 | $2,002 | $1,600 | |||||
| SF (Studio) | 599 | 618 | 601 | 540 | |||||
| $/SF (Studio) | $3.30 | $3.62 | $3.33 | $2.96 | |||||
| # Units (1x1) | 86 | 112 | 120 | 88 | 48 | 119 | 225 | 114 | 39 |
| $ (1x1) | $2,853 | $1,819 | $2,010 | $2,441 | $2,067 | $2,479 | $2,488 | $2,330 | $2,350 |
| SF (1x1) | 927 | 782 | 838 | 954 | 709 | 948 | 1,029 | 915 | 798 |
| $/SF (1x1) | $3.08 | $2.33 | $2.40 | $2.56 | $2.92 | $2.61 | $2.42 | $2.55 | $2.94 |
| # Units (2x2) | 154 | 102 | 6 | 114 | 76 | 181 | 198 | 119 | 11 |
| $ (2x2) | $3,428 | $2,019 | $2,490 | $2,832 | $2,369 | $3,082 | $2,916 | $2,872 | $2,550 |
| SF (2x2) | 1,282 | 855 | 1,134 | 1,261 | 1,188 | 1,277 | 1,580 | 1,287 | 1,080 |
| $/SF (2x2) | $2.67 | $2.36 | $2.20 | $2.25 | $1.99 | $2.41 | $1.85 | $2.23 | $2.36 |
| # Units (3x2) | 38 | 38 | 4 | 137 | 54 | ||||
| $ (3x2) | $4,102 | $3,136 | $2,518 | $3,363 | $3,437 | ||||
| SF (3x2) | 1,527 | 1,437 | 1,215 | 1,785 | 1,668 | ||||
| $/SF (3x2) | $2.69 | $2.18 | $2.07 | $1.88 | $2.06 | ||||
| Distance to Subject | 9.57 miles | 1.7 miles | 2.7 miles | 0.63 miles | 1.6 miles | 3.52 miles | 1.08 miles | 3.0 miles | |
| Notes | 6 Affordable Units |
Sales Comparables
| 480 Flatz(1) | The Residences at North Village | Meridia Transit Plaza | Morris Crossing | Magnolia Lane Luxury | Total/Averages | Irondale at Wharton (Subject) | |
| Date | September 21' | Apr 21' | December 21' | Oct '19 | Aug 19' | Feb '24 (Projected) | |
| Submarket | Greater Bergen County | Sussex County | Western Morris County | Morris County | Essex County | Western Morris County | |
| Year Built | 2021 | 2020 | 2020 | 2009 | 2018 | 2018 | 2023 |
| SF | 40,000 | 75,200 | 280,000 | 110,960 | 60,000 | 113,232 | 75,675 |
| Units | 35 | 60 | 214 | 123 | 34 | 93 | 60 |
| Average SF | 867 | 911 | 817 | 911 | 1,312 | 964 | 844 |
| Sale Price | $11,600,000 | $14,650,000 | $53,000,000 | $39,500,000 | $13,800,000 | $26,510,000 | $20,300,000 |
| $/Unit | $331,429 | $244,167 | $247,664 | $321,138 | $405,882 | $310,056 | $338,333 |
| $/SF | $290.00 | $194.81 | $189.29 | $355.98 | $230.00 | $252.02 | $268.25 |
| Cap Rate | 4.97% | 4.75% | 5.15% | 5.50% | 6.34% | 5.34% | 5.00% |
| Distance from Subject (mi.) | 33.2 Miles | 14.3 Miles | 2.4 Miles | 13.9 Miles | 4.6 Miles | 13.7 Miles |
(1) 480 Flatz - Recent Case Study: The Sponsor just executed on a very similar Property Development in Rutherford, NJ (37 miles west) totaling 35 units. They acquired the parcel in Nov 2018, developed it, and leased it up to 90% with a sale effectuating June 2021 (27 months – 9 quarters) amid the pandemic. Their net development costs were $212k/unit and their sale proceeds were $331k/unit or a 4.97% cap rate on the in-place T-3, rent roll pro-forma expenses.
Total Capitalization
| Sources of Funds | $ Amount | $/Unit |
| Debt | $13,665,916 | $227,765 |
| GP Investor Equity | $856,821 | $14,280 |
| LP Investor Equity | $5,000,000 | $83,333 |
| Total Sources of Funds | $19,522,737 | $325,379 |
| Uses of Funds | $ Amount | $/Unit |
| Purchase Price | $2,250,000 | $37,500 |
| Closing Costs | $286,650 | $4,778 |
| Hard Costs | $12,120,657 | $202,011 |
| Hard Cost Contingency | $1,110,933 | $18,516 |
| Soft Costs | $2,342,173 | $39,036 |
| Soft Cost Contingency | $131,441 | $2,191 |
| Interest Reserve | $751,620 | $12,527 |
| Developer Fee | $529,263 | $8,821 |
| Total Uses of Funds | $19,522,737 | $325,379 |
The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
The expected terms of the debt financing are as follows:
- Lender: Malvern Bank, National Association
- Term: 2 Years
- Loan-to-Value: 70.0%
- Estimated Proceeds: $13,665,916
- Interest Type: Floating
- Spread Above One-Month PRIME: 0.50% [PRIME + 50bps (Floor Rate 4.00%)]
- Interest-Only Period: 2 Years
- Amortization: None
- Prepayment Terms: Exit Fee of 33 bps if sold at stabilization
- Modeled Refinance: No
A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt.
Diversified Properties, LLC intends to make distributions from DP Wharton LLC as follows:
- 85% / 15% (85% to Investors / 15% to Promote/Carried Interest) of excess cash flow to a 8.0% IRR;
- 75% / 25% (75% to Investors / 25% to Promote/Carried Interest) of excess cash flow to a 12.0% IRR;
- 65% / 35% (65% to Investors / 35% to Promote/Carried Interest) of excess cash flow to a 14% IRR;
- 60% / 40% (60% to Investors / 40% to Promote/Carried Interest) of excess cash flow thereafter.
Diversified Properties, LLC intends to make distributions to investors after the payment of the 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 January 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Diversified Properties, LLC, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Diversified Properties, LLC will receive a promoted/carried interest as indicated above, and a portion of this promoted/carried interest may be received by RM Admin, LLC.
| Cash Flow Summary | ||||||
| Year 1 | Year 2 | Year 3(1) | ||||
| Effective Gross Revenue | $0 | $1,026,392 | $855,124 | |||
| Total Operating Expenses | $0 | $389,213 | $285,928 | |||
| Net Operating Income | $0 | $637,179 | $569,195 | |||
| Project-Level Cash Flows | ||||||
| Year 0 | Year 1 | Year 2 | Year 3(1) | |||
| Net Cash Flow | ($5,856,821) | $0 | $449,273 | $8,911,038 | ||
| Investor-Level Cash Flows(3) | ||||||
| Year 0 | Year 1 | Year 2 | Year 3(1) | |||
| Net Cash Flow | ($5,000,000) | $0 | $451,093 | $7,022,993 | ||
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(3) | ||||||
| Year 0 | Year 1 | Year 2 | Year 3(1) | |||
| Net Cash Flow | ($50,000) | $0 | $4,511 | $70,230 | ||
(1) Stub Year
(2) Return of Capital occurs at sale of Property: Please see offering documents for more details.
(3) RM Technologies, LLC and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.
Certain fees and compensation will be paid over the life of the transaction; please refer to Diversified Properties, LLC's materials for details. The following fees and compensation will be paid(1)(2)(3)(4)(5):
| One-Time Fees | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Developer Fee | 4.0% of Hard and Site Work Costs | Diversified Properties, LLC | Deal Capitalization |
| Construction Management Fee | 5.0% of Hard and Site Work Costs | Diversified Properties, LLC | Deal Capitalization |
| Affiliate Mortgage Broker Fee | 0.75% of Debt Proceeds(1) | Diversified Properties, LLC | Deal Capitalization |
| Recurring Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Administrative Services Fee | 1.0% of Equity(2) | RM Admin, LLC(5) | Cash Flow |
| Property Management Fee | 4.0% of Effective Gross Income | Diversified Properties, LLC | Cash Flow |
| Disposition Fee | 0.25% of Sales Proceeds | Diversified Properties, LLC | Cash Flow |
(1) Only applies if Sponsor secures the debt without a third-party broker
(2) Only applies to equity raised through the RealtyMogul Platform
(3) Fees may be deferred to reduce impact to investor distributions.
(4) 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.
(5) 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 information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of InvestmentThis investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. 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. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor AssumptionsSponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Sponsor is obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past PerformanceAny description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of DebtA substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not RegisteredSponsor’s securities offering 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 offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership 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 Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment AdviceNothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments.
1031 Exchange RiskInternal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.