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Multifamily
The Royce at Trumbull
Trumbull, CT
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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Offered By Colony Hills Capital
21.2%* TARGET IRR 20.2%-22.2%
7.5%* TARGET AVG CASH ON CASH
2.48X* TARGET EQUITY MULTIPLE
Estimated Hold Period 5 Years
Estimated First Distribution 8/2023
Minimum Investment 35000
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Explore this Project
Overview
The Royce at Trumbull is a value-add, 340-unit garden-style property located in affluent Trumbull, CT, which is located 25 miles outside of Stamford, CT, and 65 miles outside of New York City. The Royce is already acquired and the debt terms are finalized.
Off-Market

The Royce at Trumbull was purchased off-market at a price of $101,100,000 which equates to $297,000/unit. This basis is well below comparative sales in Fairfield County which has seen several other assets sell for $400,000 - $500,000/unit. At a total all-in basis of $333,225 per unit, the Property is still well below recent sales comps allowing for tremendous intrinsic value on day one.

Risk Adjusted Returns

The investment is well capitalized with a strong and experienced institutional preferred joint venture partner who provided ~50% of the required equity. The equity from the preferred joint venture partner is structured to allow all cash flow to go to the Limited Partners over and above a 6% current pay. Per the Sponsor, this deal structure allows for outsized return metrics to the Limited Partners that are above current market rate returns.

Targeted Markets

Trumbull is an affluent town located in Fairfield County with an average income of $150k+ and where home prices range from $400k to $1+ million. With the high cost of ownership, The Royce at Trumbull is one of the most compelling options in the submarket for families to rent because it has the largest average unit sizes amongst its competitors at 1,116 SF and is one of the only apartment communities to offer 3BR unit floorplans.

Property At A Glance
# of Units 340
# of Buildings 11
Parking Ratio 2.91/unit
Exit Cap Rate 5.0%
Current Occupancy 99%
Acquisition Price

$101,100,000

Investment Highlights
The purchase price for The Royce is $101,100,000. At a price per unit of $297,000 per unit, this is well below recent sales in Fairfield County where similar properties have sold for between $400,000-$500,000 per unit.
The Property was significantly mismanaged by the previous owner who chose to maintain occupancy over pushing rents during their ownership span due to COVID. This provides a very valuable opportunity to increase rents by an average of $464/unit. Due to the Seller's inefficiency and lack of experience, controllable expenses at the Property were higher than normal expense loads for properties of this caliber. The Sponsor's team of consultants in tandem with their Property Manager has determined that controllable expenses can be reduced by $460,000 in the first year of operations.
Trumbull, CT had a moratorium on new development from 2000 until it was briefly lifted in 2019 to allow for two new developments. The moratorium was almost immediately put back in place until 2023. This has led to a dearth of supply in Trumbull, CT for multifamily housing which makes The Royce all the more valuable and in demand.
Trumbull is an affluent town in Fairfield, CT with an average median income for the town of $150k+ with home values of $400k - $1+ million. With high home prices, The Royce is the preferred alternative for families who want to live in Trumbull since it has the largest average unit size amongst its competitors at 1,116 SF and is one of the only properties in the submarket that offers 3 BR floor plans.
The Royce offers more amenities than all of its competitors (even newly constructed properties), and when renovations and business plans are completed, The Royce at Trumbull will be comparable in quality from an interior and exterior perspective.
The investment is capitalized with a strong and experienced institutional preferred joint venture partner with terms that allow for a projected 21.2% IRR and an average 7.5% Cash on Cash, both of which are higher than current standard market returns.
Competitive fixed rate agency financing was sourced for the investment, which has a conservative 57% LTC and a 4.48% fixed rate with 5 years of interest-only payments.
Management
Cumulative Distributions

Colony Hills Capital

Colony Hills Capital offers a specialized focus on one market segment, value-add multifamily housing; mismanaged, underperforming, and undervalued Class A- through B- multifamily assets in growing markets. Their extensive and worldwide network of relationships uncovers significant opportunities, allowing them to respectfully achieve a “win-win” on investing in multifamily properties. Each business plan is property specific; targeted capital improvements and strong hands-on management throughout the hold period maximize asset value and investor returns.

https://www.colonyhillscapital.com/
  • Glenn Hanson
    Founder & Chief Executive Officer
  • David Kaufman
    President & Chief Investment Officer
Glenn Hanson
Founder & Chief Executive Officer

Glenn Hanson, the Founder and majority shareholder of Colony Hills Capital, LLC has over 30 years of experience managing complex organizations. His experience has led to the successful completion of 27 properties since October 2011, which included originating and closing debt and equity, syndication, and collaborative team supervision.

Glenn understands the critical components of a successful commercial real estate team. In just a few years he built a cohesive, productive team. In the past 7 years, under his direction, the team at Colony Hills has sourced and structured 8,700+ units totaling $545 million across the United States. To date, Colony Hills has exited its portfolio investments with every transaction being profitable.

As the primary fund-raiser for Colony Hills, Glenn has built an impressive personal network built on a 35-year career of successful deal flow and continues to cultivate a strong network of business partners from around the globe. This influential network is a result of his persistent quest for dedicated and uncompromising business partners working together to get the deal done.

David Kaufman
President & Chief Investment Officer

David Kaufman is the President, Chief Investment Officer, and a Managing Partner of Colony Hills. He has over 25 years of real estate, capital markets, and operational experience gained from working as a risk-arbitrage analyst for a US-based hedge fund, working for a privately held national real estate firm as an acquisition analyst, and as an owner-operator of his own real estate investment and management business. David has a keen eye for underperforming and undervalued investment opportunities.

Under David’s leadership, the Company has experienced tremendous growth, nearly tripling the assets under management. His brilliant sense for off-market, under-performing, and under-valued investment opportunities has led to the successful purchase and profitable close of all of Colony Hills' real estate investments. He continues to fill their pipeline with well-located assets that offer real opportunities for superior returns. To this day, David holds real estate investments that date back to 1990 and continues to personally invest in the future of Colony Hills.

Track Record

Properties Owned and Managed State Asset Type Acq Date # of Units Total Capitalization Sale Price
Riverchase Landing AL Multifamily 10/6/2011 468 $31,914,292 $35,650,000
Wynthrope Forest GA Multifamily 8/17/2012 270 $15,188,369 $20,600,000
Canterbury Townhomes  GA Multifamily 10/1/2015 160 $9,259,460 $12,500,000
Cabana AL Multifamily 5/17/2013 545 $22,219,387 $26,093,250
Pathways AL Multifamily 5/17/2013 244 $15,530,724 $20,943,750
Sandpiper AL Multifamily 5/17/2013 253 $9,553,469 $13,263,000
Windsor Place AL Multifamily 5/17/2013 384 $23,321,832 $30,900,000
Yester Oaks AL Multifamily 5/17/2013 587 $34,165,750 $43,100,000
Key Vista FL Multifamily 8/10/2018 244 $17,650,000 $27,250,000
Windfield Estates MA Multifamily 10/23/2019 160 $15,976,815 TBD
Lakeshire Village GA Multifamily 9/1/2020 284 $26,564,050 TBD
Nottingham Village  TX Multifamily 5/28/2021 317 $54,679,560 TBD
Chapel Run GA Multifamily 7/15/2021 172 $22,850,000 TBD
Fields at Peachtree GA Multifamily 9/15/2021 240 $42,646,162 TBD
City West  TX Multifamily 10/20/2021 510 $82,500,000 TBD
City Park TX Multifamily 1/21/2022 308 $78,762,786 TBD
Paramount at Kingwood TX Multifamily 3/7/2022 372 $73,489,250 TBD
Sub Total       5,518 $576,271,906 $230,300,000
             
Properties Assigned for Fee            
Houston Portfolio (9 Properties) TX Multifamily 12/12/2013 2,594 $250,000,000 Fee Income
Bristol Place (1 Property) LA Multifamily 7/14/2014 312 $38,250,000 Fee Income
Indianapolis Portfolio (7 Properties) IN Multifamily 2/18/2016 2,517 $84,050,000 Fee Income
Sub Total       5,423 $372,300,000  
             
Total       10,941 $948,571,906  

The bio and track record were provided by the Sponsor and have not been verified by RealtyMogul.

Business Plan

The Royce at Trumbull is a garden-style, workforce housing acquisition strategically located in the affluent town of Trumbull, CT between the employment centers of New Haven and Stamford, CT. The Property is ideally located near top-rated retail, schooling, strong employment, and recreation and it is situated right next to Route 25. 

The Royce is positioned to benefit in a major way from interior and exterior value add investments. The Seller has renovated 30 units and has made some minor updates to prior renovations. The Property requires some polishing to several of its amenities and renovation to 91% of the units in order to compete in the submarket. Per extensive analysis of the Property economics and the market competition, and consistent with their successful model, CHC has underwritten a projected, average $464/unit lift to the current rents post interior and exterior renovations. 

Built in 1997, the current Seller has spent approximately $1.8 million in capital improvements on the Property, which includes the renovation of 30 units. The Property is currently 99% occupied. Interior Property improvements will include substantial renovations ($15,000/unit) to 50% of the units and partial renovations ($7,500/unit) to 41% of the units. The weighted average capex will be approximately $10,590/unit for the interiors. Exterior Property improvements will include ($5,147/unit) the enhancement of the clubhouse, pool area refurbishment/resurfacing, installment of a package locker system, significant landscaping, and the improvement of the current signage. 

The current seller has left rents at rates that were appropriate for the beginning of COVID while all of The Royce's rental comps have skyrocketed 30%+. The Seller has only woken up to this fact three months ago and has begun to mark rents to market which is validation for CHC's strategy and benefits the Property's underwriting for fixed-rate agency financing. Furthermore, the Property is awkwardly overstaffed and has inappropriately run below-the-line expense items through repairs and maintenance. CHC will almost immediately be able to remedy the two aforementioned expenses by reducing them by a combined $460,000. 

Lastly, Trumbull, CT put into place a moratorium on new development in 2000 which was briefly lifted in 2019 for two new developments (The Royce's only two rental comps), but the moratorium was put back into place until 2023. The absence of new development has created a dearth of multifamily housing supply in Trumbull but with a strong and increasing demand.

Development Budget

Acquisition Cost $ Amount Per Unit Per SF
Purchase Price $101,100,000 $297,353 $266.56
Loan Origination Fee / Assumption Fee $650,000 $1,912 $1.71
Acquisition / Equity Fee $1,856,821 $5,461 $4.90
Guarantor Fee $650,000 $1,912 $1.71
Stub Interest Paid at Closing $300,000 $882 $0.79
Due Diligence $102,025 $300 $0.27
Title Insurance $125,000 $368 $0.33
Insurance Premium (Provider) $170,000 $500 $0.45
Operations Reserve $500,000 $1,471 $1.32
Contingency $370,281 $1,089 $0.98
Total Acquisition Costs $105,824,127 $311,248 $279.02
       
Capital Expenditures - Hard Costs      
CapEx $6,870,000 $20,206 $18.11
Total Hard Costs $6,870,000 $20,206 $18.11
       
Capital Expenditures - Soft Costs      
Legal Fees $205,000 $603 $0.54
Loan Costs $20,000 $59 $0.05
Utility Deposits $75,000 $221 $0.20
Working Capital $100,000 $294 $0.26
Real Estate Tax Reserve $171,654 $505 $0.45
Prepaid Insurance $30,633 $90 $0.08
Total Soft Costs $602,287 $1,771 $1.59
       
Grand Total $113,296,414 $333,225 $298.71
Property
Property Details

The Royce at Trumbull is a garden-style, value add acquisition strategically located in the affluent town of Trumbull, CT, between the employment centers of New Haven and Stamford, CT. The Property is ideally located near top-rated retail, schooling, strong employment, recreation, and it is situated right next to Route 25, a major transportation corridor allowing easy access to Hartford, New Haven, Stamford, and New York City. The Royce is positioned to benefit in a major way from interior and exterior value-add investments. The previous owner had renovated 30 units and had made some minor updates to prior renovations. The Property requires some polishing to several of its amenities and renovation to 91% of the units in order to compete in the submarket. Per extensive analysis of the Property economics and the market competition, post-renovated rents are projected to increase by $400-$500 per unit on average per month.

Unit Mix

Partially Renovated (Current) # of Units Avg SF/Unit Avg Rent  Rent per SF
1x1 20 713 $1,654 $2.32
1x1 12 849 $1,758 $2.07
1x1 24 853 $1,733 $2.03
2x1 8 1,003 $1,831 $1.83
2x2 32 1,186 $2,095 $1.77
2x2 43 1,246 $2,256 $1.81
2x2 15 1,331 $2,302 $1.73
2x2 20 1,415 $2,323 $1.64
3x2 33 1,298 $2,370 $1.83
Classic (Current)        
1x1 20 713 $1,548 $2.17
1x1 4 849 $1,704 $2.01
1x1 22 853 $1,523 $1.79
2x1 12 1,003 $1,659 $1.65
2x2 20 1,186 $1,879 $1.58
2x2 21 1,246 $1,950 $1.57
2x2 9 1,331 $2,053 $1.54
2x2 8 1,415 $2,064 $1.46
3x2 17 1,298 $2,081 $1.60
Total/Averages 340 1,116 $1,982 $1.78
         
Proforma Rents  # of Units Avg SF/Unit Upgraded Rent  Rent per SF
1x1 40 713 $1,950 $2.73
1x1 16 849 $2,050 $2.41
1x1 46 853 $2,125 $2.49
2x1 20 1,003 $2,300 $2.29
2x2 52 1,186 $2,500 $2.11
2x2 64 1,246 $2,600 $2.09
2x2 24 1,331 $2,800 $2.10
2x2 28 1,415 $2,875 $2.03
3x2 50 1,298 $3,000 $2.31
Total/Averages 340 1,116 $2,496 $2.24
Comparables

Lease Comparables

  Woodside Trumbull Ten Trumbull Merion Stratford 1111 Stratford Empire 225 The Mark Apartments The Renaissance Comp Averages The Royce at Trumbull
Address 2300 Reservoir Ave 100 Oakview Dr 1000 Avalon Way 1111 Stratford Ave 225 Lordship Blvd 7 Acadia Ln 100 Parrott Dr   100 Avalon Gates
Year Built 2021 2020 2014 2014 2019 2016 2007 2016 1997
Units 199 202 130 128 69 228 126 155 340
Occupancy 90.9% Not Available 99.3% 97.7% Not Available 93.3% Not Available 95.3% 99.1%
Average Rental Rate $3,086 $2,792 $3,073 $2,195 $1,890 $3,069 $2,519 $2,778 $1,982
Average SF 1042 1,020 1,160 750 806 1,031 1,051 980 1,116
Average $/SF $2.96 $2.74 $2.65 $2.93 $2.34 $2.98 $2.40 $2.83 $1.78
Distance to Subject 0.5 miles 0.7 miles 3.3 miles 4.1 miles 4.2 miles 4.7 miles 4.7 miles 3.2 miles  
                   
# Units (1x1) 104 87 80 67 30 96 40 72 102
$ (1x1) $2,607 $2,525 $2,886 $2,042 $1,806 $2,425 $2,205 $2,448 $1,638
SF (1x1) 803 829 1,058 692 728 854 830 841 797
$/SF (1x1) $3.25 $3.05 $2.73 $2.95 $2.48 $2.84 $2.66 $2.91 $2.05
                   
# Units (2x1) - - - - 29 - 28 29 20
$ (2x1) - - - - $2,095 - $2,411 $2,250 $1,728
SF (2x1) - - - - 1,010 - 1,005 1,008 1,003
$/SF (2x1) - - - - $2.07 - $2.40 $2.23 $1.72
                   
# Units (2x2) 95 115 40 31 - 132 48 77 168
$ (2x2) $3,610 $2,994 $3,274 $2,915 - $3,538 $3,055 $3,302 $2,134
SF (2x2) 1,303 1,165 1,309 1,061 - 1,160 1,365 1,218 1,268
$/SF (2x2) $2.77 $2.57 $2.50 $2.75 - $3.05 $2.24 $2.71 $1.68
                   
# Units (3x2) - - 10 - - - - 10 50
$ (3x2) - - $3,760 - - - - $3,760 $2,272
SF (3x2) - - 1,384 - - - - 1,384 1,298
$/SF (3x2) - - $2.72 - - - - $2.72 $1.75

 

Sales Comparables

  Norwalk Collection Avalon East Norwalk Woodside Trumbull Comp Averages The Royce at Trumbull
Date Sold May-22 Mar-22 Dec-21   Aug-22
Year Built 2014-2016 2013 2021 2017 1997
# of Units 662 240 199 367 340
Average Unit Size N/A 916 SF 1,042 SF 979 SF 1116 SF
Sale Price $293,500,000 $90,000,000 $98,000,000 $160,500,000 $101,100,000
$/Unit $443,353 $375,000 $492,462 $436,939 $297,353
Cap Rate 4.68% 4.42% 4.75% 4.62% 4.12%
Distance from Subject 14.2 miles 14.5 miles 0.9 miles 14.2 miles  
Location

Market Overview

Due to the increasingly expensive rents in Manhattan, the mass migration from Manhattan to CT, NJ, MA, TX, and FL, and the work-from-home culture since the pandemic, rent growth has increased tremendously in Fairfield County. More businesses have also moved to the immediate area. According to the Bureau of Labor Statistics, job growth in Bridgeport-Stamford Norwalk, CT was 3.3% in November 2021, reflecting 12,400 jobs added during a 12-month period. 

Submarket Overview

Trumbull, Connecticut is a very affluent submarket with an average family income exceeding $140,000 within a one-mile radius, and with average home values over $1 million dollars. There was a moratorium on new development put in place in 2000 that was then lifted in 2019 but then put back in place during the pandemic until 2023. There have only been two new developments in Trumbull since 2000. There is a clear dearth of supply in the submarket. 

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Senior Debt $65,000,000 $191,176
Preferred Equity  $25,432,847 $74,802
GP Investor Equity(1) $17,863,567 $52,540
LP Investor Equity $5,000,000 $14,706
Total Sources of Funds $113,296,414 $333,225
     
Uses of Funds $ Amount $/Unit
Purchase Price $101,100,000 $297,353
Closing Costs $4,724,127 $13,894
Hard Costs $6,870,000 $20,206
Soft Costs $602,287 $1,771
Total Uses of Funds $113,296,414 $333,225

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

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Freddie Mac
  • Term: 10 years
  • LTV: 62.5%
  • Estimated Proceeds: $65,000,000
  • Interest Type: Fixed
  • Annual Interest Rate: 4.48%
  • Interest-Only Period: 60 months
  • Amortization: 35 years
  • Prepayment Terms: Yield Maintenance
  • Modeled Refinance: No

Preferred Equity Assumptions

  • Estimated Proceeds: $25,432,847
  • Total Interest Rate(1)13%
    • Current Interest Rate: 6.00%
    • Accrued Interest Rate: 7.00%

(1) 13% per annum compounded monthly using a 360-day year (the "Total Preferred Equity Interest Rate"). 6% current portion and 7% will be accrued. The current portion of the Total Preferred Equity Interest Rate will be due and paid monthly from operating cash flow, with any shortfalls accruing.

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. 

Distributions

Colony Hills Capital intends to make distributions as follows:

  1. To the Investors, pari passu, all operating cash flows to a 10.0% IRR;
  2. 85% / 15% (85% to Investors / 15% to Promote/Carried Interest) of excess cash flow thereafter.

Colony Hills Capital intends to make distributions to investors after the payment of the company's liabilities (loan payments, preferred equity interest, 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 August 2023 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Colony Hills Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Colony Hills Capital will receive a promoted/carried interest as indicated above.

Cash Flow Summary from Operations
    Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Income   $8,783,985 $10,069,402 $11,271,410 $12,284,574 $12,653,111
Total Operating Expenses   ($3,951,227) ($4,179,865) ($4,376,137) ($4,568,052) ($4,747,088)
Net Operating Income   $4,832,758 $5,889,536 $6,895,273 $7,716,523 $7,906,023
             
Debt Service to Lender   ($2,952,444) ($2,960,533) ($2,952,444) ($2,952,444) ($2,952,444)
Partnership Costs & Fees   ($127,840) ($140,694) ($152,714) ($162,846) ($166,531)
Current Pay Return to Preferred Partner (6%)(1)   ($1,476,076) ($1,551,404) ($1,547,165) ($1,547,165) ($1,547,165)
Net Cash Flow from Operations   $276,398 $1,236,905 $2,242,950  $3,054,068 $3,239,883
             
Cash Flow Summary from Property Sale
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Proceeds from Property Sale - - - - - $54,535,568
Net Cash Flow(2) ($22,863,567) $276,398 $1,236,905 $2,242,950 $3,054,068 $57,775,451
             
Investor-Level Cash Flows(3)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($5,220,000) $31,776 $220,497 $440,507 $617,890 $11,618,654
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(3)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($50,000) $304 $2,112 $4,219 $5,918 $111,290

(1) The Preferred Partner refers to the Preferred Equity and is not a part of the offering.

(2) Investors will not receive distributions until debt service and preferred equity current interest have been paid (including preferred equity accrued interest upon Property Sale). For example, year 1 distributions to LP Investor Equity are calculated based on the “Net Operating Income” of $4,832,758, reduced by the “Debt Service to Lender” of $2,952,444, “Partnership Costs & Fees” of $127,840, and “Current Pay Return to Preferred Partner (6%)” of $1,476,076.  The prior calculation totals $276,398 to be distributed to LP Investor Equity.

(3) 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 Colony Hills Capital's materials for details. The following fees and compensation will be paid(1)(2):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 1.0% of Purchase Price Colony Hills Capital, LLC Settlement Statement
Guarantor Fee 1.0% of Debt Colony Hills Capital, LLC Settlement Statement
Technology Solution Licensing Fee(1) 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 (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 1.0% of EGI Colony Hills Capital, LLC Cash Flow
Construction Management Fee 6% of Construction Budget Colony Hills Capital, LLC Cash Flow
Administration Solution Licensing Fee(1) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ Administration Solution RM Technologies, LLC Cash Flow

 

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

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

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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