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The off-market nature of the transaction and renegotiation of Kamco's (the "Tenant") lease ahead of Closing allowed TREV to acquire the Property at a +7.0% going-in cap rate which represents at least a 250-bps discount to where fully marketed industrial cap rates are currently in New Jersey. The Purchase Price was contemplated on the current tenant's net square footage, but there is ~48,000 square feet of outdoor storage included in the lease that the tenant is not paying for. Thus, the overall footprint of the Property is much larger than the rentable square feet on the Tenant's lease. This not only makes the per square foot purchase price basis look even more attractive when compared to sales comps, but it also results in greater value to TREV and/or the potential next buyer who can release the Property inclusive of rental income from the 48,000 square feet of outdoor storage (which is customary to charge in this market).
The acquisition plan, which is already underway, is to increase rents to market levels to achieve instant value accretion and secure long-term, stable cash yields. The new lease terms have already been secured by renegotiating the Tenant's lease during due diligence. By acquiring at an attractive basis with a new stable lease in place and implementing institutional ownership/management, upside will be realized instantly upon acquisition given the off-market transaction from a local owner/operator.
The New Jersey Industrial Market has been exceptionally strong over the last five years. JLL's 4th Quarter 2021 New Jersey Industrial Report stated New Jersey had experienced unprecedented levels of rent growth due to an imbalance of supply and demand. The Northern New Jersey and Passaic County Markets have reported sub 2% vacancy rates with a history of low vacancy rates over the last five years. The Paterson Submarket has reported strong market metrics in the previous five years. The Submarket has a current vacancy rate of 1.8% with an average asking rent of $10.47/sf. Occupancy and rental rates are expected to remain strong in Northern New Jersey and the submarket for the foreseeable future.
Timberline Real Estate Ventures
Timberline Real Estate Ventures ("TREV") is a fully integrated, operationally focused privately held real estate operator and investment manager focused on the industrial/cold storage and residential sectors, having acquired more than $2.5 billion of total investments ($1.1B of invested equity) since its inception in 2012. TREV specializes in the development, acquisition, and operation of industrial, student housing, multifamily, and mixed-use retail/residential communities through a combination of individual, portfolio, and corporate equity and debt transactions.
Based in New York, TREV is a relative value investor across the capital stack (i.e. common equity, preferred equity, mezzanine, convertible debt) with diverse risk profiles from the core through opportunistic and value add opportunities yielding attractive risk-adjusted returns for its partners. TREV evaluates direct investments with co-investment partners, including high net worth individuals, family offices, foreign/sovereign partners, US public pension plans, and national/international investment advisors.
TREV emphasizes a consistent relative value investment thesis in acquiring core, core plus and value add real estate and creating alpha through intensive hands-on sourcing, structuring, and operating approach differentiating itself from many of its peers. TREV’s Relative Value investment thesis is how they have been successful in sourcing institutional quality assets and applying the same level of innovation, productivity, service, integrity, and most importantly, results, as they did initially over a decade ago yielding alpha for their partners in value add deals through core, urban assets.
https://www.timberlinerev.com-
Andrew StarkPrincipal -
Nate FowlerPrincipal
Andrew is a founding Principal of Timberline Ventures where he leverages his 25 years of hands-on real estate experience. Widely regarded as an entrepreneurial and innovative thinker in the real estate industry, Andrew’s experience crosses many disciplines including, legal, finance, land development, construction, strategic planning, and capital markets. Under Andrew’s leadership, he grew the Campus Evolution Villages brand to approximately 10,000 beds since his launching of the company in 2012. Campus Evolution was recognized as a leader in student housing and has gained ranking as a top 20 student housing owner by Student Housing Business; today Andrew also serves as Executive Vice President of B.Hom Student Living. Student housing is not new to Andrew, as Mr. Stark was instrumental in launching American Campus Communities (NASDAQ: ACC), an early student housing company, which later went on to be the first company in the sector to go public on a US stock exchange.
Andrew and his partners brought the capital to ACC to acquire its first asset and then acquired the company, built out the management team, and provided all growth capital leading up to its IPO. This initial venture was successful in bringing creative thinking and capital to this student housing vehicle in a sector that was in its infancy. Prior to launching Campus Evolution, Mr. Stark oversaw and consummated the recapitalization of a ’34 Act specialty finance company with private equity funding during the economic downturn of the late 2000s. He was responsible for negotiating and completing this highly complex transaction in the face of shareholder challenges and pending SEC investigations. Mr. Stark secured capital commitments for the transaction, and after closing, immediately implemented action items to stabilize the management of the organization and commenced asset dispositions to move the company into positive cash positions for future originations and growth. As Managing Director of Cantor Fitzgerald, Mr. Stark focused on opportunistic investments in real estate assets and platform vehicles, including distressed land assets, development projects, and strategic investments in capital-constrained assets. As President of the Northeast and Mid-Atlantic regions of a publicly-traded homebuilder to which he sold his company, Andrew oversaw the company he grew ten-fold in revenue to be a leading regional homebuilder prior to consummating a combination with the public company.
Nathaniel is a founding Principal at Timberline Real Estate Ventures. With over 15 years of hands-on real estate, private equity, and investment banking experience, Nathaniel has been a leader in all aspects of real estate analysis, acquisitions, asset management, capital raising, and operations for high-net-worth and institutional investment partners. Nathaniel partnered with Andrew Stark in 2012 and launched Campus Evolution Villages growing the company from two employees to a top 20 student housing owner/operator with more than 250 employees across the country. Today, Nathaniel serves as Executive Vice President of B.Hom Student Living.
Prior to launching Campus Evolution Villages, he worked in the Investment Banking group at Cantor Fitzgerald where he helped execute various strategic advisory transactions and capital raises for alternative investment funds, structured investment vehicles, traditional private placements, primary and secondary offerings as well as equity-linked, preferred debt and mezzanine securities. Previously, he worked on the investment and asset management team for a value-add private equity fund at LaSalle Investment Management, where he helped acquire over $2 billion in real estate assets on behalf of institutional investors. Nathaniel graduated from the University of Notre Dame and the University of Chicago Booth School of Business.
| Property | City, State | Asset Type | Acq Date | Units or SF | Purchase Price | Current Value/Sale Price | Notes |
| Multifamily and Student Housing | 25 Different States | Multifamily/Student Housing | 2012-2022 | 8,000 units / 22,000 beds | $2,053,389,396 | $2,585,895,000 | Since 2012, TREV and its affiliates have acquired more than $2.5 billion of student housing, multifamily, and mixed-use retail/residential communities ranging from core to deep value-add assets consisting of approximately 22,000 beds and 8,000 units across 25+ assets in the U.S. Timberline's realized returns exceed their pro forma returns by more than 750-bps in aggregate. |
| Realized | 10 Different States | Multifamily/Student Housing | 2012-2018 | 2,500 units / 8,000 beds | $420,955,919 | $595,895,000 | |
| Current Assets | 20 Different States | Multifamily/Student Housing | 2012-2022 | 5,500 units / 14,000 beds | $1,632,433,477 | $1,990,000,000 | |
| Industrial | Various | Industrial | 2003-2022 | ~1.2M sq ft | ~$125M | N/A | Includes deals acquired, financed and portfolio/asset managed at prior firms. |
| Office | Various | Office | 2003-2020 | ~5.0M sq ft | ~$1.1B | N/A | Includes deals acquired, financed and portfolio/asset managed at prior firms. |
| Storage | Various | Storage | 2003-2020 | ~950K sq ft | ~$200M | N/A | Includes deals acquired, financed and portfolio/asset managed at prior firms. |
The above bios and track record were provided by Timberline Real Estate Ventures and have not been independently verified by RealtyMogul.
Note: Though Timberline Real Estate Ventures predominantly focuses on residential real estate, as Sponsors, it has acquired numerous other asset classes, inclusive of industrial, throughout both the careers of the principals and this company. Timberline Real Estate Ventures prides itself on being able to identify, acquire and extract value out of various real estate opportunities when presented, even if that asset class does not fall within the predominant focus of its operation.
The tactical off-market acquisition is a large part of the business plan. By renegotiating a long-term lease with the Tenant at Closing, much of the value accretion will be realized at Closing as the new lease creates strong value enhancement for Timberline’s investors. The Tenant's previous lease ran through July 31, 2024, at $8.40/SF with the Tenant paying all expenses except RET. By acquiring for an attractive basis with a new stable lease in place and implementing TREV’s institutional ownership/management, the upside will be realized instantly upon acquisition given the off-market transaction from a local owner/operator.
TREV has capitalized ~$600K upfront to address deferred maintenance on the Tenant's roof. Over the past few years, the previous Seller has incurred costs to fix certain aspects of the roof. During the first year of the hold, TREV will address the remaining needs for the roof to ensure a well-maintained building for the tenant and the eventual next buyer.
Given the favorable purchase price and basis, the acquisition loan is constrained by the purchase price. TREV has underwritten a refinance scenario after YR 2 in order to obtain higher proceeds on a greater valuation of the Property given the long-term lease and rental rate. Underwriting a refinance strategy at the end of YR 2 and utilizing a conservative 5.0% cap rate for valuation and a 60% LTV assumption, the underwriting assumes a net equity dividend of ~$1.2M, which will, in turn, enhance cash yields starting in YR 3. At the time of refinancing, there will also be an opportunity to entertain a sale given the intense appetite for Northern New Jersey industrial in the capital market environment. At that time, there will be 8 years remaining on the Tenant's lease, which is the ideal amount of time for institutional buyers and NNN buyers. Thus, given the attractive basis and capital market environment around industrial, there will be significant optionality with either a refinance or sale in the short term of the hold.
Anchor Tenant Overview
The Property is 100% occupied by Kamco Supply Corporation of New Jersey. Founded in 1939, the parent Kamco Supply is one of the largest commercial residential building material suppliers in the New York Metro Area. The Company's customers include small to large general contractors, subcontractors, developers, builders, remodelers, and facility managers. Kamco has a fleet of 50 trucks, boom capability of up to 10 stories, and spider forklifts that can speed up delivery. Kamco offers 24-hour delivery, among other services. The Company has four locations in the New York Metro Market. Kamco's location on the Property is their only facility in New Jersey.
Timberline negotiated a lease extension through June 31, 2032, starting at $11.00/SF under a true NNN lease structure in advance of closing. The Tenant's previous lease ran through July 31, 2024, at $8.40/SF with the tenant paying all expenses except real estate taxes. The new lease extension and terms commence on the date of acquisition and represent a healthy net effective rent increase via rate and structure and further enhance going in yield and profit margin on exit. Additionally, the Property is located in an Urban Enterprise Zone, which enables a high volume of products to be sold at half sales tax, as well as other state incentives. These features are difficult to find in the Northern New Jersey (“NNJ") industrial market and very enticing to the current tenant and other future tenants. Lastly, the outdoor storage space, which consists of roughly 48,000 SF, is not contemplated in the Tenant's net rentable square footage in their lease and thus they are not paying for that additional space. Given the intense demand for industrial and outdoor storage space in this very desirable infill Northern New Jersey submarket, there is significant inherent value and optionality that a next buyer can attribute to this additional space in the future which creates a more accretive and liquid exit for the Sponsor.
Investment has been De-Risked with attractive fixed-rate financing and attractive going-in cap rate compared to other NYC metro industrial assets
The Sponsor has rate locked on its financing at an attractive 3.90% for the full 5 years of the projected hold period with flexible prepay options if needed. The debt has 12 months of interest-only payments and then amortizes based on a 30-year schedule. The property has a 1.67x DSCR and a going-in debt yield of 9.5% which are very attractive and conservative metrics for industrial debt financing. Market cap rates for acquisitions of infill metro NYC industrial range from 3.5% - 4.5% as this market is one of the most highly sought-after industrial markets in the country. The Sponsor is acquiring the property at a 7.10% going-in cap rate due to its executed new lease for the tenant increasing its rental rate and extending the lease term.
Rent Roll
| Tenant | SF | % of Total | Rent/SF | Lease Start | Lease Expiration | Lease Type |
| Kamco Supply | 65,712 | 100% | $11.00 | 7/1/2022 | 6/30/2032 | NNN |
| Total | 65,712 | 100% | $11.00 |
Lease Comparables
| 440 Allwood Rd, Clifton, NJ | 95 Mayhill St, Saddle Brook, NJ | 356 Getty Ave, Clifton, NJ | 2 Alsan Way, Little Ferry, NJ | 55 Webro Rd, Clifton, NJ | Averages | Subject | |
| Date Signed | 11/1/2021 | 8/1/2021 | 1/1/2021 | 11/1/2020 | 8/1/2020 | 7/1/2022 | |
| Year Built | 1959 | 1970 | 1967 | 1963 | 1970 | 1966 | 1940 |
| Tenant Lease Size | 30,059 SF | 66,920 SF | 20,000 SF | 31,222 SF | 93,250 SF | 48,290 SF | 65,712 SF |
| Building NRSF | 114,714 SF | 430,000 SF | 120,722 SF | 31,225 SF | 93,250 SF | 157,982 SF | 65,712 SF |
| Rental Rate | $11.95/SF | $10.25/SF | $12.50/SF | $12.25/SF | $8.98/SF | $11.19/SF | $11.00/SF |
| Lease Type | NNN | NNN | NNN | NNN | NNN | NNN | NNN |
| Address | 440 Allwood Rd, Clifton, NJ | 95 Mayhill St, Saddle Brook, NJ | 356 Getty Ave, Clifton, NJ | 2 Alsan Way, Little Ferry, NJ | 55 Webro Rd, Clifton, NJ | 845 E 25th St, Paterson, NJ | |
| Distance from Subject | 8.1 miles | 5.2 miles | 2.6 miles | 7.8 miles | 5.2 miles | 5.8 miles |
Please see attachments for more details.
Sales Comparables
| 1200 Madison Ave, Paterson NJ | 47 Sindle Ave, Little Falls, NJ | 9 Bridewell Place, Clifton, NJ | 319 Edmund Ave, Paterson, NJ | Averages | Subject (Going-in) | |
| Date Sold | 12/1/2021 | 5/1/2021 | 12/1/2020 | 9/1/2020 | N/A | |
| Year Built | 1968 | 1965 | 1959 | 1935 | 1957 | 1940 |
| NRSF | 245,529 SF | 18,738 SF | 45,670 SF | 12,830 SF | 80,692 SF | 65,712 SF |
| Sale Price | $62,500,000 | $3,700,000 | $8,250,000 | $2,300,000 | $19,187,500 | $10,000,000 |
| $/SF | $255/SF | $197/SF | $181/SF | $179/SF | $203/SF | $152/SF |
| Address | 1200 Madison Ave, Paterson NJ | 47 Sindle Ave, Little Falls, NJ | 9 Bridewell Place, Clifton, NJ | 319 Edmund Ave, Paterson, NJ | 845 E 25th St, Paterson, NJ | |
| Distance from Subject | 1.0 mile | 6.7 miles | 8.1 miles | 3.2 miles | 4.8 miles |
Property Enjoys an Attractive and Affordable Market Position
Infill Metro New York City industrial is in extraordinarily high demand and difficult to secure given the extremely high barriers to entry because of rent costs and available land. Since 2018, the average asking rent for non Class A space in NYC metro area has increased by over 41% with more properties every quarter approaching $30.00+ PSF rents. This cost for tenants coupled with sub 2% vacancy has led to extreme demand for last-mile industrial properties outside of New York City and into Northern New Jersey given the significant transportation nodes in and out of the NYC Metro and the discount to NYC metro rents.
Transportation Nodes Connecting Paterson to the NYC Metro and Beyond
The Gateway Region is an area designated by the New Jersey State Department of Tourism, which comprises Bergen, Essex, Hudson, Passaic, Union, and Middlesex Counties. The Gateway Region has some of the densest transportation infrastructures in the nation. Rail service includes New Jersey Transit train lines, which take commuters to and from New York City, Amtrak's Northeast Corridor, which links Boston and Washington, D.C., and the PATH, a 24/7 rapid transit network that conveys passengers across the Hudson River from Newark, Jersey City, and Hoboken.
Major roadways that pass through the Region include Interstates 78, 80, 95, 280, 287, and 495, as well as multiple New Jersey and U.S. Highways. The Gateway Region also includes Newark Liberty International Airport (EWR), which serves nearly 46 million passengers per year, and the Port of New York and New Jersey, which is the busiest port on the East Coast and the third busiest in the United States.
I-80 is less than one mile south of the Property. The Interstate is a distribution corridor and is the second-longest interstate highway in the United States. Interstate 80's designated terminus is in Ridgefield Park, New Jersey where it connects to I-95, providing access to the George Washington Bridge and the NYC Metro.
Route 46 spans the entire State of New Jersey, running east and west through the northern part of the State. The highway connects to Route 3, heading directly into the Meadowlands region and the Lincoln Tunnel into the heart of New York City. The Property is less than two miles from Route 46.
Port of New York and NJ Creates Increased Industrial Demand
The Port of New York and New Jersey is the port district of the New York-Newark metropolitan area. It includes a system of navigable waterways in the New York-New Jersey Harbor Estuary, which runs along 650 miles of shoreline in the vicinity of New York City and northeastern New Jersey, as well as the Region's airports and supporting rail and roadway distribution networks. The Port is considered one of the largest natural harbors in the world and is the third-largest by tonnage in the United States as of 2018, and the busiest on the East Coast.
The Port's highest volume terminals are located near the Property in Newark, Elizabeth, and Bayonne. A key driver of industrial market demand in Northern New Jersey is shipping container volume. Shipping container volume is measured in TEUs (20' equivalent container units). According to the Port Authority of New York & New Jersey ("PANYNJ") statistics, the area's Port terminals continued their 11-year record-breaking run reaching 3.92 million TEUs in 2020, a 52% increase over 2010s 2.58 million TEUs.
This increase of 1.34 million TEUs created new demand for as many as 14.7 million pallets in area warehouses. Year-to-date April 2021 TEU volume increased by 23.7% over the same period last year, indicating another record-breaking year for 2021 is likely. This steady growth in shipping container volume is expected to continue to grow, with the PANYNJ projecting TEU growth to double by 2050.
Market Overview
2021 surpassed 2020 as the market’s strongest year in history. Renewal volume accounted for nearly 50 of leasing in the fourth quarter. Additionally, 2021 logged an all-time high of 450 transactions, representing over 45.3 million SF of product leased in the market, and total annual absorption struck nearly 25 million SF, driven chiefly by the 3 PL and Logistics Distribution sectors. Even more compelling is that Class A rents increased nearly 40% year over year, effectively doubling what landlords were asking just six years ago.
Leasing volume in the fourth quarter was subdued due only as a result of an overall lack of available products in the market which bodes well for this Property. 7.3 million SF was leased in the quarter, trailing the eight quarter average of 11.1 million SF due to record low vacancy and strong preleasing on the State's under construction product. As a result, 44.9% of total leasing velocity was renewals In the largest lease of the quarter, PetCo renewed 1.0 million SF at Link Logistics' 257 Prospect Plains Rd in Cranbury Similarly, Volkswagen renewed for 929,000 SF at DWS's 47 Station Road in Cranbury. In response to the supply constraints, developers broke ground on 6.9 million SF of new product in the fourth quarter, nearly double the 2020 average of 3 8 million SF. Nearly 50.0% of these groundbreakings were in the Meadowlands, the Port area, and Exit 12 bringing total construction activity in these submarkets to 6.4 million SF.
The relatively low leasing velocity in Q4 failed to derail the market from a record 45.3 million SF of leasing in 2021, 21.3% higher than the trailing five year average and surpassing 2020, the previous calendar year high. The 3 PL and Logistics industries accounted for 33.3% of all Class A leasing, surpassing e-commerce, which was the state leader from 2016 to 2020. This leasing boom resulted in 25.0 million SF of absorption, 24.8% higher than the previous peak in 2016 which has driven vacancy 140 basis points lower year over year. In particular short supply is the Class A market which has a vacancy rate of 0.5%. This has resulted in a near 40% increase in Class A asking rents year over year and has buoyed the Class B and C segments, which have seen 18.8% and 25.1% growth, respectively.
Submarket Overview
Paterson is a large submarket relative to the national norm and contains approximately 19.5 million SF of industrial space. Similar to the Metro area, logistics facilities account for the largest component of local supply encompassing about 13.7 million SF. The local inventory pool is rounded out by 5.9 million SF of specialized space. The vacancy is currently 1.8% and has remained well below 4% since 2015.
This vacancy rate is likely substantially lower as the vacant inventory includes limited demand space on upper levels of older multi-story industrial buildings. The Submarket posted 380,000 SF of net absorption over the past year, but on average, annual absorption has been essentially flat over the past five years. Rents increased by 7.8% over the past 12 months to approximately $10.24/SF, the strongest rate of rent growth observed in Paterson in several years. There are no supply-side pressures on vacancy or rent in the near term, as no new development is underway. Moreover, the inventory has contracted over the past ten years, as demolition activity has outpaced new construction. Industrial properties traded with regularity last year, consistent with the generally high level of activity over the past three years.
Total Capitalization
| Sources of Funds | $ Amount | $/SF |
| Debt | $7,500,000 | $114 |
| TREV LP Equity | $727,570 | $11 |
| LP Investor Equity | $4,000,000 | $61 |
| Total Sources of Funds | $12,227,570 | $186 |
| Uses of Funds | $ Amount | $/SF |
| Purchase Price | $10,000,000 | $152 |
| Acquisition Fee | $200,000 | $3 |
| Loan Fee | $18,750 | $0 |
| Closing Costs(1) | $1,023,180 | $16 |
| CapEx | $600,000 | $9 |
| Working Capital | $170,640 | $3 |
| Loan Closing Costs | $215,000 | $3 |
| Total Uses of Funds | $12,227,570 | $186 |
The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(1) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services. Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
The expected terms of the debt financing are as follows:
- Lender: Blue Foundry Bank
- Term: 5 years
- LTC: 61.3%
- LTV: 75.0%
- Estimated Proceeds: $7,500,000
- Interest Type: Fixed
- Annual Interest Rate: 3.90%
- Interest-Only Period: 12 months
- Amortization: 30 years
- Prepayment Terms: 3%, 3%, 2%, 1%, 0%
- Extension Requirements: TBD
- Modeled Refinance: Yes
Refinance Information:
- Lender: TBD
- Term: 5 years
- Estimated Proceeds: $8,533,098
- Interest Type: Fixed
- Annual Interest Rate: 4.75%
- Interest-Only Period: 36 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.
Timberline Real Estate Ventures intends to make distributions from Paterson Investors I LLC as follows:
- To the Investors, pari passu, all operating cash flows to an 7.0% IRR;
- 70% / 30% (70% to Investors / 30% to Promoted/Carried Interest) of excess cash flow to a 12.0% IRR;
- 60% / 40% (60% to Investors / 40% to Promote/Carried Interest) of excess cash flow to a 17.0% IRR;
- 50% / 50% (50% to Investors / 50% to Promote/Carried Interest) of excess cash flow thereafter.
Timberline Real Estate Ventures 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 September 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Timberline Real Estate Ventures, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Timberline Real Estate Ventures 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 | $1,027,079 | $1,031,429 | $1,084,291 | $1,092,717 | $1,148,737 | |
| Total Operating Expenses | $317,389 | $321,917 | $331,742 | $340,509 | $350,907 | |
| Net Operating Income | $709,690 | $709,512 | $752,549 | $752,208 | $797,830 | |
| Project-Level Cash Flows | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | ($4,727,570) | $313,486 | $181,086 | $1,420,209 | $242,118 | $8,289,732 |
| Investor-Level Cash Flows(1) | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | ($4,000,000) | $265,241 | $153,217 | $1,201,640 | $204,856 | $5,712,910 |
| 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) | $3,316 | $1,915 | $15,020 | $2,561 | $71,411 |
(1) Returns are net of all fees. Such Fees include fees paid to RM Admin, an affiliate of RealtyMogul, who charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor. Please see the Fees and Disclaimers sections and Disclaimers sections below for additional information concerning fees paid to RM Admin.
RM Technologies, LLC and its affiliates does not provide any assurance of returns. The content on this Page, including Sponsor’s pro forma projections, was provided by the Sponsor or an affiliate thereof. Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor. The assumptions and projections included in the content on this Page, including the Sponsor’s pro forma projections, are not reflective of the position of RM Technologies, LLC or any other person or entity other than the Sponsor or its affiliates. There can be no assurances that all or any of the Sponsor’s assumptions will be true, that actual performance will bear any relation to these hypothetical illustrations, or that the Sponsor’s investment objectives will be achieved. For additional information concerning the Sponsor’s assumptions and projections, and the significant risks involved in investing in real estate, please see the Disclaimers section below.
Certain fees and compensation will be paid over the life of the transaction; please refer to Timberline Real Estate Ventures's materials for details. The following fees and compensation will be paid(1)(2):
| Real Estate Company Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Acquisition Fee | 2% of Purchase Price | TREV | Capitalized Equity Contribution |
| Debt Placement Fee | 1% of Loan Amount | TREV | Capitalized Equity Contribution |
| Recurring Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Administrative Solution Fee | Flat quarterly fee of $125 per investor services through the Administration Solution | RM Technlologies, LLC(2) | Cash Flow |
| Asset Management Fee | 1% of Total Equity | TREV | Cash Flow |
(1) Fees may be deferred to reduce impact to investor distributions.
(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the RM Technologies, LLC’s proprietary Platform and receive Platform-related services. An estimate of this fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor. The Platform fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). RM Technologies LLC’s receipt of Platform fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
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.