Bluerock Exchange, LLC, a Delaware limited liability company, is an affiliate of Bluerock Real Estate, LLC (“Bluerock”), a private equity real estate investment firm having sponsored a portfolio currently exceeding 16 million square feet of primarily apartment and office real estate. Bluerock's senior management team has an average of over 25 years investing experience, has been involved with acquiring over 35 million square feet of real estate worth approximately $10 billion, and has helped launch leading real estate private and public company platforms. The Trust is to be managed by BR Riverside DST Manager, LLC, a Delaware limited liability company (the “Manager”), an affiliate of Bluerock.
Bluerock Property Management, LLC (the "Property Manager") has subcontracted all day-to-day, on-site management, leasing and related functions for the Property to Matrix Residential, LLC (the "Property Sub-Manager" or "Matrix"). Matrix is a leading multifamily property management company in the United States. Headquartered in Atlanta, Matrix manages a portfolio of more than 67 properties, including approximately 16,000 apartment units under management, for a portfolio value exceeding $1 billion.*
*Per the Sponsor
The Property is a 310-unit urban-style apartment community located at 100 Magnolia Street in the Riverside District near Downtown Jacksonville, FL. The Property was built in 2015 and is currently 94% occupied. The unit mix consists of 188 one-bedroom units and 122 two-bedroom units. Average in-place monthly rents are $1,296 per unit ranging from $1,060 to $1,900. In-place rents are significantly higher than market averages but on-par with the two other Class A multifamily buildings that are comparable to the Property.
The Property currently offers numerous amenities including a modern pool with dual aqua decks, fire pit & gas grilling stations, outdoor living room and gathering area, regulation-sized bocce court, clubhouse with full-service kitchen, TV and billiards bar lounge, two-story fitness center with cardio, cross-fit, and yoga space, private conference room and business center/Wi-Fi area, on-site event stylist with monthly socials, private study lounge, valet trash service, on-site dry cleaning, private garages and surface parking, dog park, trash compactor and bike racks.
Unit amenities include granite or quartz countertops, kitchen islands in select units, high-gloss cabinetry, imported Italian cabinets, tile backsplash in kitchens, stainless steel appliances, walk-in closets, private balconies, downtown skyline and river views in select units, and washers and dryers in all units.
| Unit Type | # of Units | Avg SF/Unit | Avg Rent/Unit | Avg Rent/SF |
|---|---|---|---|---|
| 1/1 | 188 | 680 | $1,089 | $1.60 |
| 2/2 | 122 | 1,082 | $1,616 | $1.49 |
| Total | 310 | 838 | $1,296 | $1.55 |
| Subject | 220 Riverside | Bell Riverside | The Strand** | Total / Averages | |
|---|---|---|---|---|---|
| # of Units | 310 | 294 | 257 | 295 | 289 |
| Year Built | 2015 | 2015 | 2001 | 2007 | 2010 |
| Average SF (Per Unit) | 838 | 956 | 1,020 | 1,190 | 1,001 |
| Average Rental Rate (Per Unit) | $1,296 | $1,572 | $1,451 | $1,777 | $1,524 |
| Average Rent PSF | $1.55 | $1.64 | $1.42 | $1.49 | $1.53 |
| Distance from Subject (miles) | - | 0.10 | 1.20 | 1.50 | 0.93 |
Source: Axiometrics/CoStar
*Minimal Class A product in the submarket
**This comparable property is a High-Rise Apartment
| Subject | Broadstone Beach House | Terrace at Town Center | Hawthorne Apartments | Uptown at St. Johns | Total / Averages | |
|---|---|---|---|---|---|---|
| Date | May-16 | April-16 | January-16 | May-15 | October-14 | - |
| # of Units | 310 | 228 | 240 | 239 | 220 | 247 |
| Year Built | 2015 | 2009 | 2013 | 2013 | 2013 | 2013 |
| Average SF (per Unit) | 838 | 1,168 | 956 | 1,091 | 981 | 1,007 |
| Purchase Price | $57,970,000 | $46,512,000 | $39,000,000 | $35,200,000 | $37,700,000 | $43,276,400 |
| $/Unit | $187,000 | $204,000 | $162,500 | $147,280 | $171,364 | $174,429 |
| Cap Rate | 5.47% | 5.29% | 4.99% | 5.40% | 4.70% | 5.17% |
| Distance(mi.) | - | 17.30 | 11.50 | 14.90 | 11.70 | 13.85 |
Source: Appraisal/CoStar
Property Appraisal available upon request. Please email investor-help@realtymogul.com.
| Sources of Funds | Cost |
|---|---|
| Debt | $37,680,000 |
| Equity | $26,454,298 |
| Total Sources of Funds | $64,134,298 |
| Uses of Funds | Cost |
| Purchase Price | $57,970,000 |
| Acquisition Fee | $1,159,400 |
| Acquisition and Financing Closing Costs | $1,415,253 |
| Selling Commissions and Fees | $2,447,023 |
| Lender Reserves | $1,142,622 |
| Total Uses of Funds | $64,134,298 |
The Property has existing debt:
- Loan Origination Date: 6/13/2016
- Lender: KeyBank Fannie Mae DUS
- Loan Proceeds: $37,680,000
- Loan to Cost: 58.8%
- Interest Rate: 3.83% Fixed
- Amortization: 30-year amortization
- Interest Only: 5-year interest-only
- Recourse: Non-recourse to the Trust, but recourse to the Trust and principals of the Sponsor for certain (i) "bad acts", and (ii) environmental indemnification
- Term: 10 years
- Prepayment Penalty: 84-month Yield Maintenance period
*Approximately $22,375,000 of bridge financing from KeyBank, McKenzie and Bluerock affiliates was used to acquire the Property. The bridge financing has a blended rate of 5.0% and is expected to be repaid within 6 months with proceeds from the sale of the Beneficial Interests. Realty Mogul is still in the process of reviewing all loan documents.
The Sponsor will make distributions directly to investors who own a beneficial interest in the DST on a pro-rata basis.
Distributions are projected to start for each investor within 60 days of the completion of that investors purchase of beneficial interest in the DST. Distributions are projected to continue on a monthly basis thereafter. These distributions are at the discretion of the Sponsor and made directly by the Sponsor, neither Realty Mogul Co. nor any of its affiliates have any control or discretion on the timing or amount of distributions.
Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:
| Type of Fee | Amount of Fee | Received By | Paid From | Notes |
|---|---|---|---|---|
| Acquisition Fee | $1,159,400 | Sponsor | Capitalized Equity Contribution | 2% of purchase price |
| Broker-Dealer Fee | 6.0% | Broker Dealers | Capitalized Equity Contribution | Paid to North Capital(1) or other licensed broker-dealers based on the amount of equity capital raised. Surplus fees retained by Sponsor. |
| Marketing & Due Diligence Fee | 1.25% | Broker Dealers | Capitalized Equity Contribution | 1.25% based on the amount of equity invested by investors through RealtyMogul.com, third-party Broker Dealers (including North Capital(1)) are entitled to additional fees based on equity they originate. Surplus fees retained by Sponsor. |
| Placement Agent Fee | 1.40% | Sponsor or Third Parties | Capitalized Equity Contribution | |
| Disposition Fee | 3% | Sponsor | Sale Proceeds | 3% of Sales Price |
| Type of Fee | Amount of Fee | Received By | Paid From | Notes |
|---|---|---|---|---|
| Asset Management Fee | 0.2% of Purchase Price | Manager | Operating Cash Flow | |
| Property Management Fee | 2.75% of Effective Gross Income | Property Manager | Operating Cash Flow | Property Manager will be Matrix Residential, an unaffiliated third-party. |
| Master Lease Operating Profit | N/A | Master Lessee | Operating Cash Flow | The Master Lessee will retain net operating revenues from the Property that exceed the total rent payable to the Trust under the Master Lease. |
Notes:
The financials above assume that RealtyMogul.com investors purchase $1,000,000 of beneficiary interests in BR Riverside DST
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co. along with its respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. RealtyMogul.com and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.
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.