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Funded
Self-storage
LA/TX Self-Storage Portfolio
Multiple Locations
INVESTMENT STRATEGY
Core Plus
INVESTMENT TYPE
Equity
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100% funded
Offered By Prescott Group and Hickory Capital Group
18.1%* TARGET IRR 17.1%-19.1%
7.0%* TARGET AVG CASH ON CASH
1.71X* TARGET EQUITY MULTIPLE
Estimated Hold Period 3.6 Years
Estimated First Distribution 9/2022
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
The LA/TX Self-Storage Portfolio consists of two recently constructed, fully climate-controlled class-A self-storage assets; one in Houston, TX, and one in Metairie, LA.
Market

Metairie market rents are over 26% higher than the current rents at the Metairie subject property. Houston market rents are over 13% higher than rents at the Houston subject property. No new product is underway or permitted for the next two years in either submarket. 

Asset Quality

The assets are both Class A properties from an in-demand asset class located in affluent suburbs with strong demand for self-storage.  

Cash Flow

Both assets are cash-flow positive from day one over the 3.3% fixed interest-only loan. The properties are already purchased, allowing investors immediate opportunity to participate in cash flow.

Property At A Glance
# of Units (Houston) 819
# of Units (Metairie) 1,050
Year Built (Houston) 2018
Year Built (Metairie) 2019
Gross SF (Houston) 77,969
Acquisition Price

$37,500,000

Gross SF (Metairie)

97,000

Investment Highlights
The Sponsor has closed on the acquisition of the assets and secured a loan with Trustmark Bank.
The exit strategy is to sell the Property after a 3.6-year hold at a 5.15% exit cap rate.
Each property is located in affluent submarkets with high usage of self-storage product.
This 2-property portfolio is moderately levered (~60% LTC) at a very cost-effective loan carrying a 3.3% all-in rate.
Each property is best-in-class within each submarket and offers renters cutting-edge security technology, which renters in each submarket highly value.
Opportunity to finalize lease-up and mark rents to market yields high return metrics for all investors.
An increase in appetite for self-storage product among investors is projected to further compress cap rates, therefore the exit cap rate may result in between 25 to 50 bps lower than the underwritten 5.15%.
Management
Cumulative Distributions

Prescott Group and Hickory Capital Group

Prescott Group

Prescott Group is in Dallas, TX and was founded in 1996 by Judson (“Jud”) Pankey and Vance Detwiler. Both founding partners are still currently active executives at the firm. Prescott has three (3) separate but cohesive verticals of the business; Prescott Realty Group, the internal operations and management of our real estate; Prescott Advisors an SEC-registered entity and co-mingled fund manager with a current AUM of $152MM and Dyck O’Neal the in-house debt restructuring and servicing platform. The firm currently has 90+ employees and managed or owned over $685MM in real estate since inception. Prescott has leased over 25MM in commercial square feet. The firm currently focuses its investment efforts through their co-mingled fund mandates. Prescott Strategies Fund II has a debt/equity focus and is asset type agnostic in an effort to create a risk-adjusted portfolio. 

https://prescottgroup.com/

Hickory Capital Group

Hickory Capital Group, LLC (“HCG”) is a private real estate investment and property management company focused on the development and acquisition of self-storage properties. The firm currently has a portfolio of assets with a stabilized market value of approximately $130 million spread across the Southeast, Southwest, and Midwest.  Founded in 2014, HCG has offices in Cincinnati, Ohio; Nashville, Tennessee; and New Orleans, Louisiana. 

http://www.hickorycapitalgroup.com/

 

  • Judson Pankey
    CEO, Prescott Group
  • Vance Detwiler
    President, Prescott Group
  • Adam J. Ellsworth
    Principal, HCG
Judson Pankey
CEO, Prescott Group

Judson "Jud" Pankey founded Prescott Group in 1996.  As the chief executive officer, he is responsible for directing operating growth strategy, acquisitions and assisting with client and investor relations.  Jud is also the CEO of the firm's debt company, Dyck O’Neal, and is a voting member of Prescott Advisors' investment committee. 

Prior to Prescott, Jud was an executive vice president at SCI-ROEV Real Estate and responsible for the asset management of a $120 million investment portfolio comprising 1.8 million square feet plus several undeveloped sites in Dallas, Fort Worth, and Houston which was acquired in 1991 from Bank of America predecessor NationsBank.   

Prior to SCI, Jud was a fiduciary manager and the youngest Vice President for a bank holding company with asset management duties for two co-mingled funds and separate accounts.  He was also instrumental in the creation/ participation of several special public and private ventures such as the Uptown Dallas, Inc (UDI), Transit-Oriented Development (TOD) Tax Increment Finance (TIF) District, City Center TIF District, Thanks-Giving Square Foundation, and University Crossing Public Improvement District. 

Jud earned a bachelor’s of arts degree in both business and economics from Vanderbilt University.  Jud has completed professional education courses at London Business School and Harvard Graduate School of Design.  Additionally, he is a recipient of the Corning World Trade Council Fellowship and a finalist for the Eisenhower Fellowship. 

Vance Detwiler
President, Prescott Group

Vance is a co-founder and the current President of Prescott Group.  Vance is a principal in Prescott Advisors, Prescott Realty Group, and Dyck- O’Neal.  As the President, Vance leads strategic strategy and oversight of operating efforts across the firm.  He is responsible for the tactical direction of asset management, property management, investor relations, and capital raising.  Vance is a voting member of the Prescott Advisors investment committee. 

Prior to Prescott, Vance spent several years working at Sarofim Realty Advisors.  His primary responsibility was identifying and purchasing assets on behalf of the firm’s pension fund clients.  During his tenure, Sarofim purchased over three million square feet with a capitalization of more than $500 million.  Before Sarofim, Vance worked for LaSalle Partners (now Jones Lang LaSalle). 
Vance earned a Bachelor of Arts (concentration in finance and real estate) at the University of Texas at Austin.

Adam J. Ellsworth
Principal, HCG

Mr. Ellsworth is an accomplished commercial real estate professional with over 20 years of extensive experience in the valuation, acquisition, sales, leasing, and analysis of real estate investments across self-storage, multi-family, office, retail, and industrial property types.  Throughout his career, he has sourced, underwritten, and closed over $1 Billion in assets across a variety of different markets including the Southeast, Mideast, Mid-Atlantic, and Texas.  Mr. Ellsworth received a Master of Business Administration degree (M.B.A.) from Vanderbilt University and a Bachelor of Arts (B.A.) degree from Lafayette College.

Track Record

Prescott Track Record

Property Asset Type City, State Acq Date Sale Date Total Capitalization
7515 Greenville Ave Office Dallas, TX Jan-97 Mar-03  
6300 Ridgelea Blvd Office Ft. Worth, TX Jan-97 Feb-03  
Franklin Motor Bank Office Ft. Worth, TX Jan-97 Feb-99  
Two Mission Office Ft. Worth, TX Mar-97 Aug-97  
Oaklawn Residential For-Rent Residential Dallas, TX Mar-97 Aug-98  
Walnut Glen Tower Office Dallas, TX Aug-06 Aug-16  
Church Road (3) Land Dallas, TX Nov-06 Apr-13  
Manhattan I-III (3) For-Rent Residential Dallas, TX Aug-07 Oct-07  
Summit Office Park Office Ft. Worth, TX Oct-07 Jul-14  
Crestwood Apartments For-Rent Residential Dallas, TX Nov-07 Dec-12  
6060/6080 North Central Exwy Office Dallas, TX Jun-10 Jun-15  
BLVD Apartments For-Rent Residential Dallas, TX Dec-10 Apr-16  
Johnson Square Office Dallas, TX Aug-12 Sep-12  
110 West 7th (4) Office Tulsa, OK Dec-12 Aug-15  
Houston Tech Center (5 and 6) Office Houston, TX Dec-12 May-18  
Harbour Pointe (5) Office Seattle, WA Dec-12 May-18  
Northrock Apartments For-Rent Residential Dallas, TX Jan-13 Jan-17  
Greensheet Building Commercial Debt Houston, TX Dec-16 Aug-17  
Republic Tower/Turtle Creek Blvd Mixed-use Development Dallas, TX Jan-15 N/A  
Stoneleigh TIF TIF Receivable/Historic Hotel Dallas, TX Jul-17 N/A  
Westview Office Austin, TX Mar-16 N/A  
3100 Monticello Avenue Office Dallas, TX Aug-17 N/A  
Cle Elum Commercial Debt Cle Elum, WA Sep-17 Jun-19  
County Line Office Columbus, OH Jul-19 Dec-20  
San Marco East Plaza Office Jacksonville, FL Jan-19 N/A  
5959 Corporate Drive Office Houston, TX May-18 N/A  
Knoll Trail Office Dallas, TX Jun-19 N/A  
Greenbriar Office Fairfax, VA Nov-19 N/A  
Commercial Debt Commercial Debt Various Apr-19 N/A  
SFR Debt SFR Debt Various Jan-20 N/A  
CB-15 (2) CMBS Trust Bonds Various Dec-20 N/A  
Hickory Self-Storage Portfolio Self-Storage Various Jun-21 N/A  
Total          $680,467,038

Hickory Capital Group Track Record

Property City, State Asset Type Acq Date Units SF Sale Date Total Capitalization
Overland Park Overland Park, KS SS May 2019 612 71,160 August 2021  
Midrivers Mall St. Louis, MO SS April 2018 674 69,358 November 2021  
Eastgate Mall Cincinnati, OH SS December 2017 623 67,679 November 2021  
New Market Center Columbus, OH SS December 2020 732 113,075 December 2021  
Hamilton Place Mall Chatanooga, TN SS September 2019 612 69,573 November 2021  
Parkdale Mall Beaumont, YX SS May 2019 652 72,694 November 2021  
Seventh Street Cincinnati, OH SS September 2017 312 24,626    
Montgomery Crossing Cincinnati, OH SS June 2018 580 75,666    
Thibodaux Thibodaux, LA SS June 2021 186 41,740    
Junction City Junction City, KS SS June 2021 522 105,410    
Reading Road Cincinnati, OH SS September 2017 285 22,858    
Total             $85,700,304

(1) The above biography and track record were provided by the Sponsor and have not been independently verified by RM Technologies, LLC or its affiliates. Past performance is not indicative of future results. Please carefully review the Disclaimers section below.

Business Plan

These two self-storage properties are newly built; the Sponsor bought them from the original developer before the assets are fully stabilized. The Sponsor has closed on the acquisition of the Properties and the loan with Trustmark Bank. The plan is to stabilize the Properties and operate them for full value over several years. This is a great opportunity to participate in two Class A self-storage facilities as most of these are held by REITs and access for individual investors to participate at the project level is limited. 

The management of both facilities will be overseen by Hickory. Hickory has experience managing assets in both Texas and Louisiana. Prescott invested with Hickory in two assets in 2021, one in Thibodaux, Louisiana, and the other in Junction City, Kansas. The Properties are already outperforming underwriting. Hickory is a strong operator that looks for operational efficiencies and cost reductions. One of the largest fees that will be removed is marketing Click Fees, which range between $100 to $150 per renter. This fee is applied when a renter finds a unit on the internet. For instance, if ownership gains a total of 40 renters in a month that were generated online, the Click Fee would total $4,000 to $6,000 for that month.

The Sponsor plans to increase economic occupancy through marking rents to market, retail and insurance policy sales, implementing search engine optimization, and using a revenue management system at both properties to monitor rental rates in respective markets and price units in real-time at the most competitive rates. The Sponsor will also market and lease the 3,500 SF of retail space in the Metairie asset at competitive rates ranging from $18.00 to $20.00 per SF NNN.  Leasing brokers have already been hired.

Property
Property Details

The portfolio is comprised of a total of 1,869 units of which 819 (77,969 SF) are in Houston, TX and 1,050 (97,000 SF) in Metairie, LA.  All units in both Properties are climate-controlled. Both facilities are among the largest, best quality, and most visible within their respective submarkets. In the Metairie asset, there is also 3,500 SF of rentable retail space that is planned to be leased within two years. The main thesis in the business plan is to mark rents to market as both properties are currently rented at rates materially below market. 

Property Units Total SF Current Eff. Rent PSF Proforma Rent (Year Four)
Houston 819 77,969 $1.30 $1.90
Metairie 1,050 97,000 $1.37 $1.90
Total/Averages 1,869 174,969 $1.34 $1.90
Comparables

TX Lease Comparables

LA Lease Comparables

Sales Comparables

Location

TX Market Overview

The Houston facility is roughly eight miles west of Downtown Houston on the north side of the affluent Spring Valley neighborhood. The facility fronts on Bingle Road, a 4-lane north/south primary artery. It is in Harris County, which is part of the nine-county Houston MSA and is the 3rd most populous county in the US.  The 3-mile radius from the property echoes this density with a population of 140,628 individuals, while the population within the 5-mile radius is 400,482 individuals. The current saturation within a 3-mile radius is calculated to be 9.4 SF of self-storage space per capita -- being below 10 SF is a clear advantage -- supported by no new self-storage in the development pipeline in this market. Neighborhoods serviced by this facility include Spring Valley, Spring Branch East, Hunters Creek Village, Bunker Hill Village, and Piney Point Village. These neighborhoods are among Houston’s most affluent.

TX Submarket Overview

In Houston, the competitive local submarket has approximately 12,167 self-storage units (over 1,370,000 SF) in a 3-mile radius including the Property. The subject Property is one of the newer, if not the newest, property in the submarket, and as it is 100% climate-controlled it has an advantage over several competitors. It should be one of the market leaders in rate and occupancy when fully stabilized (both physically and economically). Additionally, the unit mix offered at the property is optimal for the needs of self-storage users in the area. In the Property’s submarket, 78% of the total square footage is over 18 years old, therefore, being a new facility, the subject Property is strongly favored by local self-storage users.  It offers its tenants superior amenities including a covered unloading area with an access-controlled entrance, spacious management office, 21 24-hour video surveillance cameras, two access-controlled freight elevators, full building intercom system, ambient music, and security lighting throughout. 

LA Market Overview

The facility in Metairie is just eight miles northwest of New Orleans. It is an institutional-quality asset that has prominent visibility and ease of access along North Causeway Boulevard, a major 5-lane thoroughfare that connects New Orleans to Mandeville. In fact, this self-storage facility benefits from direct exposure to over 80,000 vehicles per day. Metairie is a densely populated area that was recently ranked the 5th largest Census Designated Place (CDP) in the US. The 3-mile radius from the property has a population density of 118,461 individuals, while the population within the 5-mile radius is about 268,790 individuals. According to Yardi Matrix, the current saturation within a 3-mile radius is estimated at only 7.3 SF of self-storage space per capita, with 57% of the total square footage being over 15 years old. Communities serviced by the facility include Bucktown, West End, Bonnabel Place, as well as a variety of other affluent and upper-middle-class Metairie neighborhoods. Market demand is expected to continue to be strong due to the lack of basements and garages in residential properties in the New Orleans area, which would otherwise serve as storage space.

LA Submarket Overview

The Metairie Property is across the street from the Lakeside Shopping Center; a well-occupied and well-performing mall owned by New York-based Feil Group and anchored by JC Penny, Macy’s, and Dillard’s. The competitive local submarket has approximately 5,700 self-storage units (~622,000 SF) within the 2-mile radius including the Property. The subject property is one of the newer, if not the newest, property in the submarket, and as it is 100% climate-controlled it has an advantage over several competitors. Due to the amenities and location of the property, it should be one of the market leaders in rate and occupancy when fully stabilized. Additionally, the unit mix offered at the property is optimal for the needs of self-storage users in the area. There is no new self-storage in the development pipeline in this submarket and the submarket’s occupancy is 90%. 

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit $/SF
Debt $24,000,000 $12,841 $137
LP Equity(2) $11,500,000 $6,153 $66
Prescott Group Equity $3,499,410 $1,872 $20
Hickory Capital Group Equity $874,853 $468 $5
Total Sources of Funds $39,874,263 $21,335 $228
       
Uses of Funds(3) $ Amount $/Unit $/SF
Purchase Price $37,500,000 $20,064 $214
Pre-Paid OPEX $215,924 $116 $1
CAPEX $235,100 $126 $1
Loan Origination & App. Fees $220,000 $118 $1
HCG Transaction Fee $377,200 $202 $2
Working Capital $275,201 $147 $2
Legal Fees $128,831 $69 $1
RealtyMogul Fees & Costs(1) $500,000 $268 $3
Title Insurance & Recording Fees $178,996 $96 $1
Credit Line Interest Carry $150,000 $80 $1
Other Closing Costs $93,012 $50 $1
Total Uses of Funds $39,874,263 $21,335 $228

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(2)(3) Please see PPM and LPA for more details. A guaranteed payment totaling $11MM was used originally to facilitate the acquisition of the property, which guaranteed payment will be paid down with the subject offering.

Debt Assumptions

The terms of the debt financing are as follows:

  • Lender: Trustmark Bank
  • Term: 3 Years
  • Loan-to-Cost: 60.2%
  • Estimated Proceeds: $24,000,000
  • Interest Type: Fixed
  • Annual Interest Rate: 3.30%
  • Interest-Only Period: 3 Years
  • Amortization: 25 Years
  • Prepayment Terms: The loan can be prepaid at any time without penalty
  • Extension Options(2)1 two-year extension option, no fee.
  • Extension Requirements: 1.3 DSCR, no event of default, written notice within 30 to 120 days prior to maturity date

(1) 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. 

(2) At the option of the Borrower, the interest rate for the extension above can be (1) fixed at the then current "two year swap rate" plus 2.05% (the "Swap Rate") or (2) a floating rate equal to the Swap Rate. 

Distributions

Prescott Group and Hickory Capital Group intend to make distributions 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 14.0% IRR;
  3. 60% / 40% (60% to Investors / 40% to Promote/Carried Interest) of excess cash flow thereafter.

Prescott Group and Hickory Capital Group intend 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 September 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Prescott Group and Hickory Capital Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Cash Flow Summary
      Year 1 Year 2 Year 3 Year 4
Effective Gross Revenue   $3,293,669 $3,783,769 $3,955,758 $4,073,540
Total Operating Expenses   $1,299,683 $1,365,383 $1,414,597 $1,464,856
Net Operating Income   $1,993,985 $2,418,387 $2,541,161 $2,608,684
             
Project-Level Cash Flows
    Year 0 Year 1 Year 2 Year 3 Year 4 (1)
Net Cash Flow ($15,874,263) $1,337,151 $1,630,511 $1,465,565 $26,942,867
             
Investor-Level Cash Flows (2)
    Year 0 Year 1 Year 2 Year 3 Year 4 (1)
Net Cash Flow ($11,500,000) $840,912 $1,053,435 $933,940 $16,886,888
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment (2)
    Year 0 Year 1 Year 2 Year 3 Year 4 (1)
Net Cash Flow ($50,000) $3,656 $4,580 $4,061 $73,421

(1) stub year of seven months

(2) 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.

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to the Sponsors' materials for details. The following fees and compensation will be paid:

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 1.0% of Purchase Price Hickory Capital Group Capitalization
Technology Solution Licensing Fee(2) Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution RM Technologies, LLC Capitalization
       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 1.5% of EGI Prescott Group Cash Flow
Property Management Fee 5.0% of EGI Hickory Capital Group Cash Flow
Administrative Solution Fee flat quarterly fee of $125 per investor serviced through the Administration Solution RM Technologies, LLC Cash Flow

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

(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.

.

Disclaimers/FAQs
Disclaimers

Sponsor’s Projects and Targets

*Assumptions and projections included in the information on this Page, including pro forma projections (collectively “Projections”) were provided by the Sponsor or an affiliate thereof and are not reflective of the position or opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates.  RM Technologies, LLC and its affiliates do not provide any assurance of returns or the accuracy or reasonableness of the Projections provided by 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 Projections and 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 Projections and Targets are not a predictor, projection or guarantee of future performance.  There can be no assurance that the Sponsor’s Projections or Targets will be met or that the Sponsor will be successful in meeting these Projections and Targets.  Projections and Target returns should not be used as a primary basis for an investor’s decision to invest.

No Approval, Opinion or Representation, or Warranty by RM Technologies, LLC or it Affiliates

The information on this Page, including the 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”) was provided by the Sponsor or an affiliate thereof.  RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  No part of the information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s Investment Documents.  The opinions expressed on this page are solely the opinions of the Sponsor and its affiliates and none of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.

Sponsor’s Information Qualified by Investment Documents

The Information 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 Investment Documents.  The information 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 information 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 information on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents.  The information on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the sole discretion of the Sponsor and its affiliates.

Risk of Investment

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.

Risk of Forward-Looking Statements

Forward-looking statements are found here and in the applicable Investment Documents and may include words like “expects,” “intends,” “anticipates,” “estimates” and other similar words. These statements are intended to convey the Project Sponsor’s projections or expectations as of the date made. These statements are inherently subject to a variety of risks and uncertainties. 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.

Sponsor’s use of Debt

A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  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 the annual interest rate and possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account. 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.

In addition, unless the debt provides for a fixed rate of interest during the term of the loan and/or any subsequent extensions, the total amount of interest paid over the term of the debt will increase by the same amount as the related index. For example, if the index rate increases by 0.50% (50 basis points) the interest rate on the loan will increase by the same amount. The amount of such interest rate increases may be capped either by its terms or as the result of the Sponsor entering into an arrangement that caps the interest rate with respect to the debt at a particular rate.

Sponsor’s Offering is Not Registered

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 Fees and Conflicts

RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based licensing fee for real estate companies and their sponsors to license and use the RM Technologies LLC’s proprietary Platform, including one-time flat licensing fees for its Technology Solution and an ongoing quarterly flat licensing fees for its Administration Solution.  An estimate of the Technology Solution licensing fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor.  The licensing fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). Additionally, from time to time, employees of RM Technologies, LL C and its affiliates invest in Sponsor’s offering.  RM Technologies LLC’s receipt of licensing fees and its employee’s investments in Sponsor’s offering creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

No Investment Advice

RealtyMogul and RM Technologies, LLC are 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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