Lucky Property Management Group ("Lucky") is a privately held real estate investment company that was established in 1981. The firm is focused on acquiring, owning and operating industrial real estate across South Florida. Lucky’s portfolio includes over 1.3 million square feet of industrial class B and C product in South Florida with over 300 tenants under management. Additionally, the Lucky owns and manages real estate in Tennessee and South Carolina totaling over 1.1 million additional square feet of similar product. The principals, Brian Holland and Wayne Chaplin, have been in the real estate industry for over 30 years.
Lucky has been able to acquire undervalued industrial real estate and add value by identifying and correcting existing problems and adding capital improvements. Lucky acquires properties, and provides all of the adjunct services, skills and systems necessary to maintain each property to high standards of quality. The goal is to achieve the greatest operating efficiencies and realize the highest potential profit performance. Their in house management team allows them to keep expenses down while providing excellent value to all of their tenants. In addition to the partners, Lucky employs third party consultants and four back-office employees.
Other Members in the Sponsor Entity
In addition to Lucky there are two other partners in the Sponsor entity, both of whom are expected to have voting rights therein. All the partners of this project provide significant capital contributions.
One partner is Daniel Stuzin of SF Partners. Daniel is a founder and managing principal of SF Partners and is responsible for setting the investment strategy of that firm.
The other active partner is Michael Kramer of the Kramer family office Kramerica Equity, LLC.
Built from 2003-2006, the Portfolio is currently 81% leased. Construction style of the Portfolio is consistent throughout, with each building having a six-foot concrete base with metal walls and a metal roof throughout. The office/retail space generally has 16 foot clear heights and industrial space has 20 foot clear heights. The buildings have slide-up metal doors throughout the Portfolio which extend down to the ground. The Portfolio has 1.8 parking spaces per 1,000 rentable square feet, which is considerably above the 1.0 space per 1,000 square feet guidelines per CBRE's property condition assessment reports for the Portfolio. Several of the industrial use buildings include free gated storage areas for tenants to use. Private use of the outdoor spaces is provided to tenants in their leases.
| Hanging Moss | Goldenrod | 100 Technology Parkway | 6438 University Blvd | 7101 Presidents Plaza | Averages | |
|---|---|---|---|---|---|---|
| Date | Oct-16 | Oct-16 | June-16 | Jan-15 | Aug-16 | Jan-15 |
| Square Feet | 94,200 | 78,646 | 297,582 | 84,251 | 108,432 | 163,423 |
| Year Built | 2004-2005 | 2006 | 1985 | 1990 | 1980 | 1985 |
| Purchase Price | $4,441,558 | $4,441,558 | $21,300,000 | $5,021,700 | $9,950,000 | $12,090,567 |
| $/SF | $38 | $38 | $72 | $60 | $92 | $74 |
| Distance from Hanging Moss | N/A | 1.6 miles | 12.9 miles | 2.5 miles | 14.5 miles | 10.0 miles |
| Distance from Goldenrod | 1.6 miles | N/A | 10.1 miles | 2.9 miles | 14.7 miles | 9.2 miles |
Note: Sales comparable information for the Hanging Moss and Goldenrod properties is from the DRAFT CBRE appraisals for those properties attached hereto.
| Hanging Moss | Goldenrod | 351 Central Park Drive | 2800 W Airport Drive | 4510 Orange Blvd. | Averages | |
|---|---|---|---|---|---|---|
| Space Type | Flex Retail | Flex Retail | Industrial Class B | Flex Class C | Flex Class C | N/A |
| Lease/Available SF | 2,000 | 6,536 | 4,500 | 2,000 | 2,480 | 2,993 |
| Year Built | 2004-2005 | 2006 | 2000 | 1985 | 1986 | 1990 |
| Building SF | 94,200 | 78,646 | 40,000 | 33,236 | 25,841 | 33,026 |
| $ / SF / Year | $8.10 NNN | $7.43 NNN | $6.50 NNN | $11.00 NNN | $6.32 NNN | $7.94 NNN |
| Distance from Hanging Moss | N/A | 1.6 miles | 1.8 miles | 4.4 miles | 1.0 mile | 2.4 miles |
| Distance from Goldenrod | 1.6 miles | N/A | 3.0 miles | 3.8 miles | 2.4 miles | 3.1 miles |
Note: Lease comparable information for the Hanging Moss and Goldenrod propeties is from CoStar.
| Subject | 110 Tech Drive | 120 Maritime Drive | 4625 Church Street | Averages | |
|---|---|---|---|---|---|
| Date | Oct-2016 | May-15 | April-14 | June-16 | May-15 |
| Square Feet | 116,500 | 40,000 | 19,980 | 17,120 | 25,700 |
| Year Built | 2003 | 1995 | 1998 | 2005 | 1999 |
| Purchase Price | $4,441,558 | $2,000,000 | $1,100,000 | $1,198,000 | $1,700,200 |
| $/SF | $38 | $50 | $55 | $70 | $58 |
| Distance from Subject | N/A | 1.6 miles | 2.2 miles | 0.2 miles | 1.3 miles |
Note: Sales comparable information for the Monroe property is from CoStar.
| Subject | 351 Central Park Drive | 2800 W Airport Drive | 4510 Orange Blvd. | Averages | |
|---|---|---|---|---|---|
| Space Type | Flex Retail | Flex Class B | Industrial Class C | Industrial Class C | N/A |
| Lease/Available SF | 51,890 | 12,000 | 9,500 | 3,150 | 8,217 |
| Year Built | 2003 | 1994 | 1982 | 1954 | 1977 |
| Building SF | 116,500 | 12,000 | 27,935 | 3,150 | 14,362 |
| $ / SF / Year | $5.40 NNN | $6.50 NNN | $6.06 NNN | $5.62 NNN | $6.06 NNN |
| Distance from Subject | N/A | 1.3 miles | 2.6 miles | 1.0 mile | 1.6 miles |
Note: Lease comparable information for the Monroe property is from CoStar.
| Sources of Funds | Cost |
|---|---|
| Debt | $14,650,000 |
| Equity | $3,800,000 |
| Total Sources of Funds | $18,450,000 |
| Uses of Funds | Cost |
| Purchase Price | $17,500,000 |
| Leasing Cost Reserves | $375,000 |
| Loan Fee (1.0%) | $146,500 |
| Doc Stamps | $81,950 |
| Interest Rate Cap Reserve | $80,000 |
| Buyer's Broker Fee | $70,000 |
| Broker Dealer Fee (4.0%) | $56,000 |
| Legal* | $50,000 |
| Working Capital | $45,550 |
| Sponsor Acquisition Fee | $25,000 |
| Third Parties and Lender Costs | $20,000 |
| Total Uses of Funds | $18,450,000 |
*Note: A portion of the legal fees will be paid to a third party attorney as reimbursement for legal pursuit costs.
The projected terms of the debt financing are as follows:
- Lender: PRIME Finance
- Proceeds: $14,650,000
- Term: Two (2) years
- Extension Options: Three (3) one year options
- Extension Costs: 0.00%, 0.25% and 0.50% for extensions one, two and three, respectively
- Prepayment: Yield maintenance through Month 24, then none
- Property Release: Yield maintenance through Month 18, then none
- Loan Paydown Upon Property Release: 125% of allocated loan value
- Rate: 30-Day LIBOR + 5.25% (5.77% as of 9/12/16)
- Rate Cap: Two (2) year cap = 1.00% + 30-Day LIBOR at closing date
- Amortization: $18,000 per month beginning in the second extension period (Month 37)
- Interest Only: Initial term and first extension period (36 months)
- Loan to Cost: 79.3%
- Exit Fee: 1.0%
- Recourse: Environmental and Bad-Boys only
- Lender Reserves:
- CapEx and Spec Space Reserve: $175,000
- Leasing Reserve for Rollover: $75,000 initially, and $4,000 monthly in swept cash
- Leasing Reserve for Currently Vacant Space: $125,000
- Ongoing Capital Expense Reserve: $0.10 per square foot / year
There can be no assurance that a lender will provide debt on the rates and terms noted above, or at all. All 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.
Orlando Industrial 3 RE, LLC intends to make distributions of operating cash flows to Realty Mogul 71, LLC as follows:
- To the Members, pari passu, all excess operating cash flows to a 10.0% Preferred Return to the Members,
- 60.0% / 40.0% (60.0% to Members / 40.0% to the Sponsor) of excess operating cash flows thereafter.
Orlando Industrial 3 RE, LLC intends to make distributions of cash flows due to the sale or refinance of any or all properties in the Portfolio to Realty Mogul 71, LLC as follows:
- To the Members, pari passu, all excess cash flows and appreciation to a 10.0% Preferred Return to the Members,
- To the Members, pari passu, all excess cash flows and appreciation until all Members have received a full return of capital,
- 60.0% / 40.0% (60.0% to Members / 40.0% to the Sponsor) of excess cash flows and appreciation thereafter.
Note that these distributions will occur after the payment of the Company's liabilities (loan payments, operating expenses and other fees as set forth in the LLC agreement, in addition to any member loans or returns due on member loans).
Realty Mogul 71, LLC is to distribute 100% of its share of excess cash flow (after expenses) to the members of Realty Mogul 71, LLC (the RealtyMogul.com investors). The manager of Realty Mogul 71, LLC is to receive a portion (up to 10%) of the Sponsor's promote interest.
Distributions are expected to start in March 2017 and are projected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves.
| Year 1 | Year 2* | Year 3 | Year 4** | Year 5 | |
|---|---|---|---|---|---|
| Effective Gross Revenue | $1,984,552 | $2,113,135 | $1,559,236 | $1,602,784 | $1,667,022 |
| Total Operating Expenses | $594,299 | $618,125 | $443,370 | $456,542 | $470,884 |
| Net Operating Income | $1,390,253 | $1,494,983 | $1,115,866 | $1,146,242 | $1,196,138 |
| Distributions to Realty Mogul 71, LLC Investors | $132,850 | $450,743 | $115,648 | $72,872 | $2,00,468 |
*Note: The Monroe property is projected to be sold at the end of Year 2.
**Note: The amortization of the existing loan commences in Year 4, which lowers projected net cash flow to investors.
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 |
| One-Time Fees: | ||||
|---|---|---|---|---|
| Acquisition Fee | $25,000 | Sponsor | Capitalized Equity Contribution | 0.1% of the Portfolio purchase price. |
| Broker-Dealer Fee | $56,000 |
North Capital (1) | Sponsor's Acquisition Fee | 4.0% of equity invested by Realty Mogul 71, LLC |
| Recurring Fees: | ||||
| Property Management Fee | 4.0% of effective gross revenues | Third Party & Sponsor | Operating Cash Flow | 3.0% due to third party and 1.0% due to Sponsor |
| Management and Administrative Fee | 1.0% of equity invested in Realty Mogul 71, LLC | RM Manager, LLC | Distributable Cash | RM Manager, LLC is the Manager of Realty Mogul 71, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2) |
Notes:
(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.
(2) Fees may be deferred to reduce impact to investor distributions
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 71, LLC, along with their 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.
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.