The team at our affiliated broker-dealer, RM Securities, conducts diligence on of the issuer, including detailed background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to screening for any criminal background, we may also turn down sponsors due to poor reference checks, even if the background and criminal checks are satisfactory.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent.* When an investor makes an investment with such sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s contingency offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
* Unless otherwise disclosed, escrow accounts are not required for some investments that accommodate 1031 investments where the property is already acquired.
Our processes typically includes visiting certain properties (or a subset of properties if it's a fund) to confirm the real estate is what and where the real estate is supposed to be. For certain properties that accommodate 1031 exchange investments, the team will review third-party prepared due diligence reports in lieu of a site visit.
We have formalized processes and checklists for every private placement deal listed on the platform.
There is a very attractive cost basis of land driven by the acquisition of the adjacent property air rights, resulting in 32% reduction in land basis/unit.
The Project benefits from the 421a affordable housing tax abatement program providing a 35-year tax abatement that is driving attractive deal level and long-term cash-on-cash returns. The Project also benefits from an opportunity zone designation, unlocking additional tax benefits to investors yielding an OZ adjusted IRR of ~21% and ~3.0x Equity Multiple.
Spaxel principals have successfully owned and developed Bronx multifamily assets for more than a decade and are currently developing 12 Bronx projects with nearly the exact same business plan together with premier institutional capital partners, representing nearly 1,000 units and almost $300M in total project capitalization.
Spaxel
Spaxel is a vertically integrated development and investment firm with in-house acquisitions, development, and management capabilities powered by best-in-class, bleeding-edge technology.
Spaxel pursues opportunities across a range of strategies with a primary focus on value-add and new construction multi-family targeting moderate-income housing. They select growth markets across the United States with high employment and significant job and population growth, yet have unmet housing needs and rising rents relative to income.
Spaxel is led by Managing Partner Granit Gjonbalaj (previously Chief Development Officer at WeWork) and Chairman David Hamamoto (previously CEO and Chairman of Northstar Realty, CEO of Morgans Hotel Group, and Co-Head of Real Estate at Goldman Sachs).
The Spaxel principals have raised and managed billions of dollars across the capital stack and collectively developed and operated millions of square feet of residential and commercial assets with extensive ground-up, repositioning, and value-add experience.
Spaxel currently employs over 75 professionals and owns or is developing 3,000 units across New York, New Jersey, and Georgia with total project capitalization exceeding $700M.
http://www.spaxel.com/-
Granit GjonbalajCEO & Managing Partner -
Jeff DybasChief Investment Officer & Partner -
Benjamin SiscovickPresident & Partner -
Glenn PalillaCFO & Partner
Prior to forming Spaxel, Granit was Chief Development Officer at WeWork where he was responsible for the entire real estate operation of the firm, leading a 3,000-person team that delivered ~50M square feet of innovative, flexible office space at 110 locations around the world. Prior to WeWork, Granit founded UA Builders, a preeminent tri-state multi-family and commercial construction firm, and Propco, a leading multi-family and affordable housing development company. Granit holds a BA in Finance and Investments from Baruch College.
Jeff has originated more than $5 billion of debt and equity investments over his 28 years in commercial real estate. Prior to joining Spaxel, Jeff was a Managing Director at Nuveen Real Estate and before that was a Senior Vice President at Starwood Property Trust where he originated mezzanine debt and preferred equity investments. Earlier in his career, Jeff was a Senior Vice President at Bank of America and at Anglo Irish Bank, where he originated, underwrote, and asset managed debt and equity investments. Before that, Jeff was a Senior Vice President at Marathon Asset Management where he focused primarily on commercial real estate equity investments. Jeff received a BA from the University of Virginia and an MBA from The Wharton School of Business at the University of Pennsylvania.
Ben was previously General Partner at IA Ventures, one of the top-performing venture capital funds of the past two decades. Ben was also an equities analyst and Head of Strategic Projects at Dayah Capital, the largest equity fund at Millennium Partners. In addition to his role on the investment team, Ben led Dayah’s data science and engineering teams. Ben is also a Venture Partner at i80 Group, a specialty finance/alternative credit firm, and an advisor to Designer Fund, an early-stage SF-based venture fund. Ben received his BA from the University of Pennsylvania and MBA from Columbia Business School.
Glenn is a Certified Public Accountant and serves as COO of Spaxel. Glenn was previously a Manager at KPMG, and more recently, owned and operated a tax and outsourced CFO consulting business. In addition to his role leading finance and accounting functions at Spaxel, Glenn oversees all operations as well as asset and property management.
Spaxel Track Record
| Property | City, State | Asset Type | Acq Date | Units or SF | Project Capitalization | Sale Price |
| 2065 Ryer Ave | Bronx, NY | Ground-Up Multifamily | March 2020 | 132 | $35,148,406 | n/a (Offer at 5.0% Cap Rate) |
| 2047 Ryer Ave | Bronx, NY | Ground-Up Multifamily | June 2020 | 102 | $29,610,712 | n/a |
| 16 Wade Square | Bronx, NY | Ground-Up Multifamily | June 2020 | 74 | $31,058,370 | n/a |
| 3165 Villa Ave | Bronx, NY | Ground-Up Multifamily | June 2020 | 57 | $18,164,308 | n/a |
| 3168 Villa Ave | Bronx, NY | Ground-Up Multifamily | June 2020 | 44 | $11,319,138 | n/a (Offer at 5.5% Cap Rate) |
| 2710 Creston Ave | Bronx, NY | Ground-Up Multifamily | Jan 2021 | 73 | $28,023,448 | n/a |
| 2252 Aqueduct Ave | Bronx, NY | Ground-Up Multifamily | March 2021 | 56 | $25,549,645 | n/a |
| 1751 Monroe | Bronx, NY | Ground-Up Multifamily | Feb 2021 | 50 | $17,933,615 | n/a |
| 1695 Monroe | Bronx, NY | Ground-Up Multifamily | Oct 2020 | 46 | $15,236,341 | n/a |
| East Orange Workforce Housing Portfolio | East Orange, NJ | Value-Add Multifamily | 2021 - Various Dates | 1,108 | $237,821,222 | n/a |
| Hills at East Cobb | Marietta, GA | Value-Add Multifamily | March 2021 | 266 | $45,239,967 | n/a |
| Spaulding Hills | Peachtree Corners, GA | Value-Add Multifamily | July 2021 | 378 | $20,157,475 | n/a |
The above bios and track record were provided by Spaxel and have not been independently verified by RealtyMogul.
The Business Plan for Spaxel Anthony Ave OZ is as follows:
- Acquire three parcels at 1824-1828 Anthony Ave as well as the adjacent air rights (acquisition completed in Oct 2021)
- Finance the development of 128 affordable housing units with ~70% LTC leverage
- Develop the asset with market-leading efficiency driven by Spaxel's large scale construction efforts in the Bronx, proprietary bleeding-edge technology stack, and Spaxel's in-house procurement capabilities
- Refinance the construction loan at 90% LTC upon completion of construction in Year 3 to return ~60-70% of the initial equity contribution
- Lease up market-rate units with Section 8 voucher holders to accelerate lease-up timeline and benefit and reduce collection loss
- Utilize New York's 421a tax abatement program and I/O leverage during the hold period to generate attractive annual cash flow
- Refinance a second time at 70-80% LTV, returning an additional ~60-80% of initial equity contribution, in Year 5 upon stabilization of the asset
- Exit the asset after a 10 year hold period to realize the full Opportunity Zone tax benefits
The Bronx market remains one of the strongest multifamily submarkets in New York City, highlighted by rapid population growth and investment. Through unique, off-market relationships, Spaxel acquired the land at significant discounts to other land trades and should achieve additional cost reduction on construction from economies of scale, smart use of technology, and a fully-vertically integrated platform. All of Spaxel’s current development projects in the Bronx use 421a tax abatements and attract tenants that qualify for the Section 8 voucher program. Using the combination of 421a abatements and Section 8 vouchers, Spaxel plans to drive strong rent growth, reduce collection losses, lower the tax liability, and lease up the portfolio more rapidly.
- Strong rent growth: Section 8 voucher tenants must compete for free market units, and as such, the max allowable rents grow with general market rent growth. The historic trend of Section 8 growth is 7.1% 5-year rent CAGR.
- Decreased credit risk and collection losses: Section 8 voucher programs cover 70% of tenant rents (and in certain situations can cover up to 95%), which inherently shifts the credit exposure away from the tenant to the government.
- Reduced tax liability: 421a provides real estate owners with a real estate tax exemption for up to three years during the construction period and an additional 35 years after construction. 421a abatements require that 30% of units are designated as affordable, while the remaining market-rate units are built to be “naturally occurring affordable” that qualifies for Section 8 tenants.
- Speed of lease-up: There is a massive supply and demand imbalance for qualified Section 8 housing. Spaxel's most recent newly delivered asset was fully leased up in under two months at the beginning of the pandemic.
Development Budget
| ACQUISITION COSTS | $ Amount | $/SF | $/Unit |
| Purchase Price | $4,317,500 | $38.29 | $33,730 |
| Deposit | $207,500 | $1.84 | $1,621 |
| Acquisition Broker Fee | $300,000 | $2.66 | $2,344 |
| Acquisition Closing Costs | $22,625 | $0.20 | $177 |
| Acquisition Mansion Tax | $67,875 | $0.60 | $530 |
| Acquisition Legal | $75,000 | $0.67 | $586 |
| TOTAL ACQUISITION COSTS | $4,990,500 | $44.26 | $38,988 |
| Acquisition Fee | $49,905 | $0.44 | $390 |
| Transfer Tax | $89,069 | $0.79 | $696 |
| TOTAL LAND VALUE | $5,129,474 | $45.49 | $40,074 |
| HARD COSTS | |||
| Base Hard Costs Total | $20,118,461 | $178.42 | $157,175 |
| Contingency | $2,011,846 | $17.84 | $15,718 |
| General Conditions | $1,609,477 | $14.27 | $12,574 |
| GC Fee | $2,011,846 | $17.84 | $15,718 |
| TOTAL GC CONTRACT | $25,751,630 | $228.38 | $201,185 |
| SOFT COSTS | |||
| ARCHITECT FEES | |||
| Architect of Record | $225,518 | $2.00 | $1,762 |
| Structural Engineer | $84,569 | $0.75 | $661 |
| Civil Engineering | $112,759 | $1.00 | $881 |
| Architect Consultancy | $39,466 | $0.35 | $308 |
| Expeditor | $56,380 | $0.50 | $440 |
| Demolition Consultant | $15,000 | $0.13 | $117 |
| MEP | $118,397 | $1.05 | $925 |
| SOE Structural Engineering | $50,000 | $0.44 | $391 |
| TOTAL ARCHITECT FEES | $797,539 | $7.07 | $6,231 |
| MISC SOFT COSTS | |||
| Renderings | $10,000 | $0.09 | $78 |
| Property Topographic Survey (Initial & Final) | $20,000 | $0.18 | $156 |
| DOB/NYC Municipal Permit + Filing Fees | $86,380 | $0.77 | $675 |
| Site Safety Plan | $50,000 | $0.44 | $391 |
| Monitoring Services | $140,949 | $1.25 | $1,101 |
| Third Party Inspections | $169,139 | $1.50 | $1,321 |
| Legal Fees | $30,000 | $0.27 | $234 |
| Neighbor Agreements | $50,000 | $0.44 | $391 |
| Geotechnical Fee | $25,000 | $0.22 | $195 |
| Insurance - Builders Risk | $50,124 | $0.44 | $392 |
| Environmental Phase I | $2,500 | $0.02 | $20 |
| HPD Fees | $384,000 | $3.41 | $3,000 |
| Accounting Fees | $25,000 | $0.22 | $195 |
| 421a Marketing | $117,000 | $1.04 | $914 |
| Real Estate Taxes | $28,820 | $0.26 | $225 |
| Developer Fee | $1,209,558 | $10.73 | $9,450 |
| Violations | $65,000 | $0.58 | $508 |
| Dues & Subscriptions | $4,300 | $0.04 | $34 |
| Environmental/Insurance Consultants | $15,000 | $0.13 | $117 |
| Asbestos Removal | $225,518 | $2.00 | $1,762 |
| TOTAL MISC SOFT COSTS | $4,520,404 | $40.09 | $35,316 |
| SENIOR DEBT | |||
| Interest Reserve | $1,763,939 | $15.64 | $13,781 |
| Bank Fees | $10,000 | $0.09 | $78 |
| Origination Fee | $211,673 | $1.88 | $1,654 |
| Underwriting Fee | $0 | $0.00 | $0 |
| Appraisal Fee | $5,000 | $0.04 | $39 |
| Environmental Assessment Fee | $2,000 | $0.02 | $16 |
| Bank Legal Fees | $65,000 | $0.58 | $508 |
| Plan and Cost Review Fee | $10,000 | $0.09 | $78 |
| Construction Monitoring (Bank Fees) | $0 | $0.00 | $0 |
| Misc Fees & Searches | $750 | $0.01 | $6 |
| Requisition Funds Control | $30,000 | $0.27 | $234 |
| Extension Fees | $0 | $0.00 | $0 |
| Broker Fees (Mortgage) | $211,673 | $1.88 | $1,654 |
| Construction Legal Fees | $100,000 | $0.89 | $781 |
| Senior Title - Mortgage Tax | $749,021 | $6.64 | $5,852 |
| Senior Title - Misc Searches | $5,000 | $0.04 | $39 |
| Senior Title - Premiums | $84,569 | $0.75 | $661 |
| Senior Title - Recording & Search Fees | $1,800 | $0.02 | $14 |
| Senior Title - Taxes | $2,200 | $0.02 | $17 |
| Senior Title - Misc Disbursement | $0 | $0.00 | $0 |
| TOTAL SENIOR DEBT COSTS | $3,252,624 | $28.85 | $25,411 |
| ACQUISITION FINANCING | |||
| Acquisition Interest | $113,125 | $1.00 | $884 |
| Acquisition Origination Fee | $22,625 | $0.20 | $177 |
| Acquisition Appraisal & Misc. | $25,000 | $0.22 | $195 |
| Acquisition Bank Fees | $22,625 | $0.20 | $177 |
| Acquisition Mortgage Tax | $41,224 | $0.37 | $322 |
| Acquisition Legal Fees | $20,000 | $0.18 | $156 |
| RM Technologies Fee | $202,332 | $1.79 | $1,581 |
| TOTAL ACQUISITION DEBT FEES | $446,931 | $3.96 | $3,492 |
| Soft Cost Contingency | $420,000 | $3.72 | $3,281 |
| TOTAL LAND COSTS | $5,129,474 | $45.49 | $40,074 |
| TOTAL HARD COSTS | $25,751,630 | $228.38 | $201,185 |
| TOTAL SOFT COSTS (Excluding Financing Costs) | $5,737,942 | $50.89 | $44,828 |
| TOTAL FINANCING COSTS | $3,699,555 | $32.81 | $28,903 |
| TOTAL DEVELOPMENT BUDGET | $40,318,602 | $357.56 | $314,989 |
Spaxel has acquired 3 land parcels at 1824-1828 Anthony Ave. In addition, Spaxel was able to secure and purchase residual air rights from the adjacent property allowing them to increase the unit count from 78 to 128 units, significantly reducing land cost basis from $51,923/unit to $35,352/unit, representing a 32% reduction in land basis/unit. In the proposed development, there are 66 studios, 12 one-bedroom, 23 two-bedroom, and 27 three-bedroom units, with the larger units significantly increasing potential revenues at rents guaranteed through the Section 8 Voucher program.
| Unit Mix | # of Units | Avg SF/Unit | 2021 Avg Rent | 2021 Rent per SF | 2025 Avg Rent | 2025 Rent per SF |
| 0x1 | 66 | 400 | $1,794 | $4.49 | $2,018 | $5.05 |
| 1x1 | 12 | 500 | $1,824 | $3.65 | $2,052 | $4.10 |
| 2x1 | 23 | 700 | $2,057 | $2.94 | $2,314 | $3.31 |
| 3x1 | 27 | 850 | $2,605 | $3.06 | $2,930 | $3.45 |
| Total/Averages | 128 | 558 | $2,015 | $3.61 | $2,267 | $4.06 |
Lease Comparables
| Address | Unit Type | Rent |
| Subject | Studio | $1,794 |
| 2030 Ryer Ave | Studio | $1,814 |
| 2010 Walton Ave | Studio | $1,824 |
| 1407 Sheridan Ave | Studio | $1,900 |
| 1378 College Ave | Studio | $1,900 |
| 1975 Lafontaine Ave | Studio | $1,930 |
| Average | 4.2% discount to market | $1,874 |
| Address | Unit Type | Rent |
| Subject | 1 bedroom | $1,824 |
| 21020 Tiebout Ave | 1 bedroom | $1,800 |
| 2080 Ryer Ave | 1 bedroom | $1,800 |
| 1900 Morris Ave | 1 bedroom | $1,900 |
| 1872 Washington Ave | 1 bedroom | $1,900 |
| 1890 Walton Ave | 1 bedroom | $1,900 |
| Average | 1.9% discount to market | $1,860 |
| Address | Unit Type | Rent |
| Subject | 2 bedroom | $2,057 |
| 1687 Anthony Ave | 2 bedroom | $2,050 |
| 1661 Topping Ave | 2 bedroom | $2,057 |
| 2080 Valentine Ave | 2 bedroom | $2,100 |
| 2105 Ryer Ave | 2 bedroom | $2,100 |
| 2080 Ryer Ave | 2 bedroom | $2,150 |
| 1770 Morris Ave | 2 bedroom | $2,405 |
| 1513 Findlay Ave | 2 bedroom | $2,450 |
| Average | 6.0% discount to market | $2,187 |
| Address | Unit Type | Rent |
| Subject | 3 Bedroom | $2,605 |
| 1665 Clay Ave | 3 Bedroom | $2,550 |
| 1766 Topping Ave | 3 Bedroom | $2,650 |
| 1759 Topping Ave | 3 Bedroom | $2,700 |
| 1898 Belmont Ave | 3 Bedroom | $2,850 |
| 1892 Arthur Ave | 3 Bedroom | $2,850 |
| 2058 Arthur Ave | 3 Bedroom | $2,850 |
| Average | 5.0% discount to market | $2,742 |
Sales Comparables
| 1228 Washington Avenue | 1181 Sherman Avenue | 428 East 148th Street | 1072 University Avenue | 3188 Riverdale Ave | 1417 Longfellow Ave | 1193 Fulton Ave | Phoenix Realty S8 Portfolio | 265 Cherry Street | Averages | Spaxel Anthony Ave OZ | |
| Date | Nov '20 | Nov '19 | Dec '19 | Apr '19 | May '18 | Apr '18 | Jul '18 | Oct '21 | Oct '20 | May '24 | |
| Submarket | Bronx | Bronx | Bronx | Bronx | Bronx | Bronx | Bronx | Bronx | Manhattan | Bronx | |
| Sale Date | November-20 | November-19 | December-19 | April-19 | May-18 | April-18 | July-18 | October-21 | October-20 | October-19 | December-31 |
| SF | 34,960 | 30,953 | 20,672 | 6,400 | 29,309 | 28,255 | 24,542 | N/A | N/A | 25,013 | 112,759 |
| Units | 50 | 43 | 24 | 10 | 14 | 39 | 25 | 362 | 500 | 119 | 128 |
| Sale Price | $13,000,000 | $12,250,000 | $7,500,000 | $2,200,000 | $8,100,000 | $9,880,000 | $12,300,000 | $96,000,000 | $435,000,000 | $66,247,778 | $58,078,934 |
| $/Unit | $260,000 | $284,884 | $312,500 | $220,000 | $578,571 | $253,333 | $492,000 | $265,193 | $870,000 | $392,942 | $453,742 |
| $/SF | $582.00 | $582.00 | $582.00 | $730.00 | $592.00 | $688.00 | $430.00 | $801.00 | $524.00 | $612.33 | $515.07 |
| Cap Rate | Pre-TCO Sale (OZ) | High Vacancy | Not Reported | High Vacancy | 4.20% | Affordable - Vacant | Affordable - Vacant | S8 Portfolio - Not Reported | S8 Portfolio ~4.25% | 4.20% | 5.50% |
Market Overview
The Bronx is the northernmost of New York City’s five boroughs and home to nearly one-fifth of the City’s population. Since 2010, it has been the fastest-growing county in New York State (population grew by 26% between 1980 and 2017). Given the robust market dynamics in The Bronx over the past decade, real estate investment has soared. The value of commenced construction in the borough has grown on pace with the rest of New York City since 2010. Between 2014 and 2018, The Bronx accounted for the largest share (11,670 units or 40%) of all affordable housing construction in New York City. Despite this residential boom, supply is not meeting demand, and understandably so. Despite positive economic momentum in the area, as job and population growth continue without correspondingly sufficient increases in affordable housing supply, there has been a growing rift between median rent and median household income (HHI) which further aggravates the affordable housing crisis facing the rest of New York City.
The affordable housing crisis and lack of quality housing is felt acutely in the Bronx more than in the rest of New York City. Fortunately, New York State is the largest federal recipient of rental assistance dollars ($6.2 billion in 2018), a large portion of that going towards NYC Section 8 housing choice voucher (“HCV”) programs for housing roughly ~330k households or ~700k tenants. Approximately 70% of all Section 8 Vouchers in NYC reside in the Bronx. With 700k individuals in NYC in the Section 8 Voucher Program, there are about 490k Section 8 individuals in the borough. Historically, 80% of the population in the Bronx are renters, not homeowners. In this way, with a general population of 1.418 Million people as of 2019, 43% of all Bronx Residents utilize the Section 8 Voucher Program. With the majority of properties in the Bronx built in the early-20th Century and generally suffering from extensive deferred maintenance, The Project will therefore be highly competitive to Voucher holders since the asset will be both well-amenitized and new construction. Because the tenant rent contribution via the Section 8 voucher is fixed at 30% of personal income, the demand for our new apartments will be significant as voucher users are less price-sensitive and will seek out the nicest product available in a submarket since their contribution is the same regardless of face rent.
Submarket Overview
Just north of the Cross Bronx expressway, it has a central location for many activities, being equidistant to Yankee Stadium to the South and Van Cortlandt Park to the North. Just two blocks north of Claremont Park, a recreational park offers a summertime pool, basketball courts, a baseball field & playgrounds, as well as a 10-minute walk to Crotona Park, a large public park in the South Bronx in New York City, covering 127.5 acres, with a public pool, Carris Reed Tennis Center, The Crotona Ampitheater, basketball courts, baseball fields & playgrounds. Furthermore, it is just two blocks away from Grand Concourse, the main thoroughfare, running 5.2 miles with an average width of 180-feet, dubbed the Park Ave of the Bronx.
Total Capitalization
| Sources of Funds | $ Amount | $/Unit |
| Debt | $28,223,021 | $220,492 |
| GP Investor Equity | $3,025,581 | $23,637 |
| LP Investor Equity | $9,070,000 | $70,859 |
| Total Sources of Funds | $40,318,602 | $314,989 |
| Uses of Funds | $/Unit | |
| Purchase Price | $5,129,474 | $40,074 |
| Hard Costs | $25,751,630 | $201,185 |
| Soft Costs | $5,737,942 | $44,828 |
| Closing Costs(1) | $3,699,555 | $28,903 |
| Total Uses of Funds | $40,318,602 | $314,989 |
(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 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: TBD
- Term: 3 Years
- Loan-to-Cost: 70.0%
- Estimated Proceeds: $28,223,643
- Interest Type: Floating
- Spread above one-month LIBOR: 5.0%
- Interest-Only Period: 48 Months
- Amortization: 30 Years
- Prepayment Terms: TBD
- Extension Requirement: TBD
Modeled Refinance #1
- Lender: TBD
- Term: 2 Years
- Estimated Proceeds: $36,290,843
- Interest Type: Fixed
- Annual Interest Rate: 3.5%
- Interest-Only Period: 36 Months
- Amortization: 30 Years
Modeled Refinance #2
- Lender: TBD
- Term: 5 Years
- Estimated Proceeds: $46,200,000
- Interest Type: Fixed
- Annual Interest Rate: 3.0%
- Interest-Only Period: 60 Months
- Amortization: 30 Years
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.
Please see the Project Summary in the Documents section for more information regarding financing assumptions and timing.
Spaxel intends to make distributions from Anthony Investors QOZF, LLC as follows:
- To the Investors, pari passu, all operating cash flows to a 10.0% IRR;
- 80% / 20% (80% to Investors / 20% to Promoted/Carried Interest) of excess cash flow to a 15.0% IRR;
- 70% / 30% (70% to Investors / 30% to Promote/Carried Interest) of excess cash flow thereafter.
Spaxel 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 July 2025 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Spaxel, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Spaxel 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 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | ||||
| Effective Gross Revenue | $0 | $0 | $0 | $2,912,434 | $3,559,674 | $3,625,768 | $3,693,235 | $3,762,106 | $3,832,415 | $3,904,194 | |||
| Total Operating Expenses | $0 | $0 | $0 | ($555,338) | ($684,794) | ($703,710) | ($723,170) | ($743,188) | ($763,781) | ($784,967) | |||
| Net Operating Income | $0 | $0 | $0 | $2,357,095 | $2,874,879 | $2,922,058 | $2,970,066 | $3,018,919 | $3,068,634 | $3,119,228 | |||
| Development Costs | ($207,500) | ($11,551,454) | ($11,745,694) | ($11,706,137) | ($1,418,261) | ||||||||
| Disposition | $55,755,776 | ||||||||||||
| Unlevered Cash Flow | ($207,500) | ($11,551,454) | ($11,745,694) | ($11,706,137) | $938,834 | $2,874,879 | $2,922,058 | $2,970,066 | $3,018,919 | $3,068,634 | $58,875,004 | ||
| Project-Level Cash Flows | |||||||||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |||
| Debt Funding | $0 | $2,060,168 | $9,146,567 | $11,706,137 | $9,283,977 | $0 | $9,566,759 | $0 | $0 | $0 | ($46,200,000) | ||
| Net Cash Flow | ($207,500) | ($9,491,286) | ($2,599,127) | $0 | $10,011,138 | $1,604,843 | $11,102,816 | $1,584,066 | $1,632,919 | $1,682,634 | $11,289,004 | ||
| Investor-Level Cash Flows(1) | |||||||||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |||
| Net Cash Flow | $0 | ($4,680,000) | $0 | $0 | $3,564,881 | $554,816 | $3,570,661 | $371,868 | $384,723 | $397,804 | $2,954,354 | ||
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(1) | |||||||||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |||
| Net Cash Flow | $0 | ($50,000) | $0 | $0 | $38,086 | $5,927 | $38,148 | $3,972 | $4,110 | $4,250 | $31,563 | ||
(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.
(2) The Project also benefits from an opportunity zone designation, unlocking additional tax benefits to investors yielding an OZ adjusted IRR of 20.7% and 3.0X Equity Multiple.
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 Spaxel's materials for details. The following fees and compensation will be paid(2)(3)(4)(5):
| One-Time Fees: | ||||
| Type of Fee | Amount of Fee | Received By | Paid From | |
| Acquisition Fee | 1.0% of Purchase Price | Spaxel | Capitalized Budget | |
| Development Fee | 3.0% of Budget | Spaxel | Capitalized Budget | |
| General Contractor Fee(1) | 8.0% of Hard Costs | Spaxel Affiliate | Capitalized Budget | |
| Property Management Fee | 4.0% of EGI | Spaxel | Cash Flows | |
| 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 | |
(1) An affiliate of the Spaxel Member will be retained as the general contractor for the Project pursuant to guaranteed maximum price contracts with the following markups: 10% for general conditions; 8% for the general contractor’s fee
(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.
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLCSponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment DocumentsThe 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. Neither RM Securities nor Sponsor are 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. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
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. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.