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Funded
Multifamily
Citizen House Decker
Austin, TX
INVESTMENT STRATEGY
Core Plus
INVESTMENT TYPE
Equity
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100% funded
Offered By Prism Multi Family Group
14.9%* TARGET IRR 13.9%-15.9%
6.6%* TARGET AVG CASH ON CASH
1.89X* TARGET EQUITY MULTIPLE
Estimated Hold Period 5 Years
Estimated First Distribution 6/2022
Minimum Investment 35000
*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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Explore this Project
Overview
Citizen House Decker is a brand new, 2021-built, Class A multifamily property close to the new Tesla Gigafactory in Austin, Texas.
Capital Appreciation

As East Austin is being developed, most notably with Tesla announcing the move of their headquarters, the area is expected to see significant population growth in the coming years, making the Property more valuable as a result.

Demographics

The demographic of the current residents at the Property is young and predominantly white collar with an average household income over $100,000.

Market

Austin is the fastest-growing major city in the US growing 3% alone in Q4 2020. Q1 2022 is expected to see 22,000 new jobs as many major headquarters complete the development of their campuses.

Property At A Glance
# of Units 324
# of Buildings 11
Year Built 2021
Current Occupancy 61.3%
Parking Ratio 1.76 Per Unit
Acquisition Price

$77,100,000

Investment Highlights
At a purchase price of $77,100,000, Citizen House Decker is a brand new Class A build being purchased below replacement cost. Year 1 cap rate is expected to be 3.71%, which is 20 basis points better than the market cap rates in Austin for Class A properties.
Currently, rents are roughly $500/month on average cheaper than high-end properties a few miles west closer to the city. The room to raise rents while still being the cheapest Class A rents in the market is significant.
The Property is located a 4-mile drive from the brand new Tesla gigafactory and is the closest Class A apartment rental property to the gigafactory. This location is expected to fill 15,000 new jobs over the next year and a half.
Amenities include a resort-style pool, poolside grills and dining area, a resident lounge with kitchen and arcade, coworking space, and a fully-equipped fitness center.
Prism Multi Family Group believes that East Austin is going to become an attractive and affordable option for young professionals moving to the Austin area. The market is expected to fill 22,000 jobs in Q1 2022 alone, and as more and more companies open major offices in Austin, the East Austin area will become more developed, thereby increasing in value with each additional attraction and employment center in the area.
As of November 15, occupancy is 61.3%, and the Property is 80.2% leased.
Management
Cumulative Distributions

Prism Multi Family Group

Prism Multi Family Group is a Canadian-based real estate investment and asset management company specializing in acquiring value-add multifamily residences in the United States. The goal of the Company is to bring these properties up to par operationally for tenants while maximizing the NOI of the Property, thereby increasing value for investors. They do this by hiring best-in-class management companies, eliminating unnecessary expenses, and maximizing potential market rent. The Company currently has ~$268M in AUM with properties spanning the southern United States, in Florida, Arizona, Texas, Nevada, and California.

https://prismmf.com/
  • Mark Zolty
    President
  • Mitch Zolty
    Partner
  • Bernard Heitner
    Partner
Mark Zolty
President

Mark Zolty has extensive residential real estate experience, having been in the industry for over 15 years. Prior to founding Prism, Mark held the title of Principal and Managing Director at Brass Enterprises Inc., a real estate investment company focused exclusively on multifamily properties. He was responsible for overseeing all of Brass’s asset management, acquisitions, and financing functions totaling $450,000,000 in AUM. Prior to joining Brass in 2009, Mark served as a Property Manager at MetCap Living Management, one of Canada’s largest private property management firms.

Mitch Zolty
Partner

Since co-founding Prism 4 years ago Mitch has been instrumental in the acquisition of over $250 million in properties. Mitch harnesses his keen business acumen and operational knowledge, overseeing the company’s asset management, acquisition closings, and the implementation of Prism’s signature value-add strategy across the portfolio. A third-generation property operator, Mitch has spent much of his life learning from his family’s 65 years in the multifamily industry.

Bernard Heitner
Partner

Bernard is a seasoned businessman with global experience. He founded Cambridge Global Payments in 1992 and turned it into the largest private foreign exchange house in North America. With his business acumen, he grew Cambridge from a 4-person office to a 400-person company with offices in North and South America, Europe, Asia, and Australia. He expanded the company from its roots in forex to a global payment service. In 2017 he sold the company for $900M. At Prism, Bernard is focused on growing the portfolio by enabling strategic partnerships.

Track Record

Prism Multi Family Group Track Record

Property City, State Asset Type Acq Date Units  Purchase Price Sale Price
Las Vegas Portfolio (3 properties) Las Vegas, NV Multifamily 12/1/2018 390 $43,000,000 $72,000,000
Spectra at Reno Las Vegas, NV Multifamily 12/2/2018 90 $9,000,000 $12,250,000
Latitude 33 Palm Springs, CA Multifamily 1/1/2018 121 $16,625,000 N/A
72 West Tamarac, FL Multifamily 10/1/2019 291 $47,000,000 N/A
Hamlet & Continental Plantation and Lauderhill, FL Multifamily 5/1/2020 399 $53,500,000 N/A
Lakehouse Apartments Lake Elsinore, CA Multifamily 12/1/2020 128 $23,500,000 N/A
Ridgeway Village Glendale, AZ Multifamily 8/1/2021 200 $28,500,000 N/A
Spectra Parks (formally Citizen House Decker) Austin, TX Multifamily 12/8/2021 324 $77,100,000 N/A
Spectra Paradise Las Vegas, NV Multifamily 3/1/2022 205 $22,500,000 N/A
Total       2,148 $320,725,000  

The above bios and track record were provided by Prism Multi Family Group and have not been independently verified by RealtyMogul.

Business Plan

Prism plans to stabilize the Property at the aggressively growing market rent prices. Currently, the priority of the sellers is to lease the Property with concessions at discounted prices. Current rents are roughly $500/month on average cheaper than high-end properties a few miles west closer to the city. The room to raise rents while still being the cheapest Class A rents in the market is significant. The Sponsor will be aggressive in renewal and new rents in the second generation and allow the market rent growth of Austin and the developing area surrounding to take over as more and more jobs come to the market.

Prism plans to take advantage of the rapid growth of the Austin market overall, which is expected to fill 22,000 new jobs in Q1 2022 alone. This significant growth and subsequent demand have led to considerable rent increases across the market.

CapEx Breakdown

Exterior Renovations  
Flex room furniture $40,000
Rebranding $25,000
Additional amenities such as outdoor internet and additional garages $185,000
Grand Total $250,000
Property
Property Details

Citizen House Decker is a newly built, Class A property that is only 4 miles from the new Tesla headquarters. Current pricing during lease-up has increased 23% since it began and is still $500 less than the closest similar quality property 5 miles away. There is room to increase rents significantly and still be cheaper than the market.

Unit Type # of Units Avg SF/Unit Avg Rent (In-Place) Avg Rent (Stabilized) Post-reno rent per SF
1x1 156 780 $1,230 $1,460 $1.87
2x2 168 1125 $1,650 $1,845 $1.64
Total/Averages 324 959 $1,448 $1,660 $1.75
Comparables

Lease Comparables

  Laurel The Mont Radius On Grove The Aspect Averages Subject
Year Built 2021 2021 2017 2017 2019 2021
# of Units 300 288 156 308 263 324
Average Rental Rate $1,683 $1,739 $2,056 $1,801 $1,820 $1,502
Average Unit Size 869 859 1054 966 937 957
Average $/SF $1.94 $2.02 $1.95 $1.86 $1.94 $1.57
Occupancy 33% 93% 99% 92% 79% 61.3%*
Distance from subject 2.5 mi 5.8 mi 5.7 mi 6.2 mi 5.9 mi  
             
$/Unit (1x1) $1,493 $1,554 $1,675 $1,519 $1,560 $1,232
SF (1x1) 704 736 828 679 737 775
$/SF (1x1) $2.12 $2.11 $2.02 $2.24 $2.12 $1.59
             
$/Unit (2x2) $2,171 $2,023 $2,467 $1,784 $2,111 $1,650
SF (2x2) 1,195 1,048 1,298 978 1,130 1,130
$/SF (2x2) $1.82 $1.93 $1.90 $1.82 $1.87 $1.46

*Occupancy as of November 15, 2021

Sales Comparables

  The Monroe Arise Riverside The Copeland Averages Subject
Date Sold 12/23/2020 12/14/2020 10/15/2019   12/08/2021
Year Built 2020 2020 2019 2020 2021
# of Units 223 275 328 275 324
Average Unit Size 813 806 748 789 957
Sale Price $47,500,000 $58,000,000 $72,300,000 $59,266,667 $77,100,000
$/Unit $213,004 $210,909 $220,427 $214,780 $237,963
$/SF $262 $262 $295 $273 $249
Cap Rate 3.38% 3.68% 3.75% 3.60% 3.71%
Building Size 181,522 SF 221,650 SF 245,344 SF 216,172 SF 310,068 SF
Distance from subject 9.0 mi 7.5 mi 11.2 mi 9.2 mi  
           
Location

Market Overview

Austin is one of the hottest multifamily markets in the US due to its exceptional economic and population growth. As the fastest-growing metro in the country with at least 1M residents, in Q4 2020 alone, the population grew over 3%. This has resulted in high occupancy rates with an ever-growing demand. The growth is primarily fueled by the expanding employment market, with companies such as Tesla, Oracle, Samsung, and Google establishing a large presence in the city. With many of these companies yet to hire for the facilities and offices they are currently building, the demand for rental units will only become stronger, translating into more significant increases in rent and renewals. At 0.4%, foreclosure rates in Austin are historically low, especially compared to the national average of 1.1%. This is a sign of a healthy real estate market, with high property values and strong employment.

Submarket Overview

East Austin, where Citizen House Decker is located, is a dynamic, urban destination. The average household income within 5 miles of the Property is $79,284. The neighborhood is proving increasingly attractive to young professionals who appreciate its convenient location, with access to the employment and amenities of central Austin, and more attainable rents as compared to the Central Business District and East Central submarkets. Due to the growth remaining in the area, Prism is acquiring this property at an extremely attractive cost basis.

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Debt $57,825,000 $178,472
GP Investor Equity $4,800,000 $14,815
LP Investor Equity $18,200,000 $56,173
Total Sources of Funds $80,825,000 $249,460
     
Uses of Funds $ Amount $/Unit
Purchase Price $77,100,000 $237,963
Acquisition Fee $1,156,500 $3,569
Loan Fee $867,375 $2,677
Closing Costs(1) $492,200 $1,519
CapEx $250,000 $772
Loan Reserve $796,318 $2,458
Other Costs $162,607 $502
Total Uses of Funds $80,825,000 $249,460

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 RM Technologies LLC’s proprietary Platform and receive Platform-related services.  Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.  An estimate of this fee, in addition to estimated due diligence, travel, legal and other fees associated with the formation of the company and the related securities filings, in the amount of $230,000 is not included in the Sources and Uses above; however, this estimated fee has been factored into the calculation of projected economic returns.  Please thoroughly review the Sponsor’s relevant offering documents and operating agreement(s) for additional detail concerning these fees.  RM Technologies LLC’s receipt of fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: ACRE
  • Term: 3+1+1
  • Loan-to-Value: 75.0%
  • Estimated Proceeds: $57,825,000
  • Interest Type: Floating
  • Spread Above One-Month LIBOR: 3.15%
  • Interest-Only Period: Full Term
  • Amortization: N/A
  • Prepayment Terms: Loan may be prepaid in whole on any monthly payment date, subject to yield maintenance calculated through the 15th monthly payment date
  • Extension Requirements: 
(i) delivery of an extension notice to Lender 60 days prior to the extension;
(ii) no uncured default or event of default shall exist at the time of such extension;
(iii) payment of an extension fee of 0.50% of the Loan Amount for each extension (the “Extension Fee”);
(iv) purchase of an interest rate cap in accordance with the terms hereof;
(v) a Maximum LTV of 75%; and
(vi) a Minimum Debt Yield of not less than 6.50%, and 6.75%, respectively, at the time of each extension.

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.

Distributions

Prism Multi Family Group intends to make distributions from Prism Decker Holdings, LP as follows:

  1. To the Investors, pari passu, all operating cash flows to an 8.0% IRR;
  2. 80% / 20% (80% to Investors / 20% to Promote/Carried Interest) of excess cash flow to a 12.0% IRR;
  3. 70% / 30% (70% to Investors / 30% to Promote/Carried Interest) of excess cash flow thereafter.

Prism Multi Family Group 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 June 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Prism Multi Family Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Prism Multi Family Group 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 Year 4 Year 5
Effective Gross Revenue   $6,065,739 $6,889,845 $7,313,182 $7,527,549 $7,748,246
Total Operating Expenses   $3,208,130 $3,317,029 $3,353,393 $3,440,464 $3,511,027
Net Operating Income   $2,857,609 $3,572,816 $3,959,789 $4,087,085 $4,237,219
             
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($21,680,893) $1,567,166 $1,641,461 $1,999,521 $2,097,905 $44,774,304
             
Investor-Level Cash Flows(1)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($5,230,000) $270,888 $287,039 $364,878 $386,266 $8,577,810
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($50,000) $2,590 $2,744 $3,488 $3,693 $82,006

(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. 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to Prism Multi Family Group's materials for details. The following fees and compensation will be paid(2)(3)(4):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 1.5% of Purchase Price Prism Deal Capitalization
           
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 1.5% of Gross Receipts Prism Cash Flows
Administrative Services Fee 1.0% of Equity(1) RM Admin(3) Cash Flows

(1) Only applies to equity raised through the RealtyMogul Platform

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

(3) 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.

(4) 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.

Disclaimers/FAQs
Disclaimers

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.

RealtyMogul is not a registered broker-dealer, investment adviser or crowdfunding portal.  Nothing on this Page should not be regarded as investment advice, either on behalf of 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, and we recommend that you consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any real estate investment.

For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.

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