We run extensive background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to never allowing a sponsor with a criminal history / any securities related issue to use the platform, we may also turn down sponsors due to poor reference checks even if background and criminal checks come back clear.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent. When an investor makes an investment with unaffiliated sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
Our controls include visiting every property (or a subset of properties if it’s a fund) to confirm the real estate is what and where the real estate is supposed to be.
We have robust quality controls with detailed checklists and a review of third-party reports.
The Bronx Charter School for Children has been a staple of excellence in the Bronx community school system since being approved in 2003 and officially opening its doors in 2004. The school has consistently outperformed the district of location and state average in both ELA and Math for each subgroup. Students' scores prior to the pandemic demonstrated consistent growth, to ensure this trend post-pandemic, the school immediately began a strategic planning process to enhance the academic program which included increased staffing and instructional time in ELA and math, and improved curriculum alignment to current standards. To sustain this positive momentum, the school has put in place a rigorous recruitment plan that draws on the expertise of a dedicated team.
629 Courtlandt Avenue is located in the largely mixed-use community school district 7 in the heart of the Bronx with a population of around 1.4 million. The Bronx is an attractive area to invest in, the area is experiencing high population growth driven by affordable real estate which is attracting young families. The area has also benefitted from strong public and private commercial development and investment which has driven local employment growth, and robust public transportation infrastructure which attracts commuters. The Subject Site is also in close proximity to New York's most iconic attractions such as Yankee Stadium.
In addition to the Project located at 629 Courtlandt Ave, Barone Management is currently in active development of six other charter school projects. Additionally, including the original Jamaica schools, Barone has five active and operating schools. Based upon these twelve schools, at full enrollment, the Sponsor takes pride in helping provide quality education to over 5,700 economically and socially disadvantaged students.
Barone Management
Founded in 1999, Barone is a Real Estate Development & Construction Firm operating in the New York City Metro market. With separate but complimentary divisions dedicated to developing their own real estate holdings, they have found a unique niche in the highly competitive NYC marketplace, allowing for an impressive track record, with a prestigious list of partners and projects. A dedicated approach focused on acquiring premium real estate, coupled with a commitment to a value-add business plan rooted in the ability to construct their own projects, has yielded a solid portfolio of NYC assets in the hospitality, multifamily, office, and industrial sectors. As of mid-year 2022, they have over 2 million square feet of projects that are completed or under development.
As its primary objective, Barone seeks to achieve high-yield opportunistic rates of return for its principals and investors, as opposed to more risk-averse “core” investment opportunities. It endeavors to accomplish this by leveraging a six-stage approach to real estate development that has been curated throughout the company’s 20+ year operating history, characterized by sourcing deals, underwriting investment opportunities, pre-development activities, financing arrangements, construction oversight, and finally asset management. During each stage of the process, Barone implements a carefully refined strategy characterized by in-house expertise and a wide-ranging network of third-party relationships.
https://www.baronemanagement.com/-
Scott BaroneFounder and Principal -
John SilvianoPrincipal
Scott Barone is the Founder and Principal of Barone Management LLC. Founded in 1999, the Company was initially focused on property management and small to medium-sized fee-based construction management projects before expanding into development consulting as well. By 2005, Barone had approximately 400,000 square feet of property under its stewardship, a mix of property management and active construction. However, Mr. Barone’s earliest success arrived via a partnership with The McSam Hotel Group, in which Mr. Barone endeavored to develop a series of hotels in 2009, the first located in Manhattan’s Tribeca neighborhood at 231 Hudson Street, and the second located in downtown Brooklyn within immediate proximity to the Barclays Center at 40 Nevins Street. Both projects proved to be profitable, shifting the firm’s focus solely to developing properties for its own account with an emphasis on long-term ownership. Since that time, Mr. Barone has led the strategic vision of the Company while overseeing its expansion into various market sectors, including hospitality, commercial, industrial, and community facility from the approach of both ground-up development as well as acquisition and renovation. Most recently, in 2018, Mr. Barone recognized what he believed to be a substantial gap that existed within the educational facilities market and has led his eponymous firm’s foray into the niche charter school sector. Today Mr. Barone manages all aspects of the Company’s financial dealings and project design, with a specific focus on creative deal-structuring and management of vital relationships among industry leaders, investors, government officials, and financial institutions.
Mr. Silviano joined Barone in 2006. After establishing a reputation within the firm as an aggressive and savvy dealmaker, he was named a Principal in 2010 and helped guide the firm through a substantial growth period, characterized by higher value and more sophisticated transactions. Furthermore, the construction arm of the company began taking on larger projects than before with Mr. Silviano overseeing the development of commercial properties in Manhattan and Brooklyn, among others. In 2010, Mr. Silviano was intimately involved in all aspects of both the Hudson Square and Nevins Street hotel projects, from ongoing negotiations and transaction structuring to managing the finer points of the construction process. Since that time, he has assisted Mr. Barone in all aspects of the Company’s various development projects and helped to grow the firm to its current stature, with a focus on financial analysis, deal underwriting, and operational efficiency. In this capacity, Mr. Silviano is instrumental to the firm in managing lender relations and the monetization of the Company’s real estate holdings. Mr. Silviano also monitors the Company’s construction management division, including oversight of construction budgets, job scheduling, code compliance, and ultimate signoffs. Recently, Mr. Silviano was proudly named to the Top 40 Under 40 in Real Estate and Construction list by the City and State publication, as well as the Top 100 People in Real Estate by the Top 100 Magazine.
| Property Name | City, State | Asset Type | Role | Status | Acq Date | SF | Purchase Price | Sales Price or Estimated Value | Total Capitalization | IRR | EMx | Comment | |
| Marriot Fairfield Hotel: Central Park | Manhattan, NY | Hospitality | Co-GP | OWNED | 2013 | 82,000 | $17,500,000 | $90,800,000 | $70,000,000 | N/A | N/A | ||
| 456 Greenwich | Manhattan, NY | Hospitality | Co-GP | OWNED | 2013 | 85,000 | Ground Lease | N/A | $160,000,000 | N/A | N/A | ||
| Greenwich Street Commercial Condo | Manhattan, NY | Commercial | GP | OWNED | 2014 | 2,500 | $3,985,000 | $5,500,000 | $3,985,000 | N/A | N/A | ||
| Wyndham Hotel & Retail Complex | Queens, NY | Hospitality | GP | OWNED | 2014 | 64,556 | Ground Lease | N/A | $26,152,846 | N/A | N/A | ||
| The West | Brooklyn, NY | Hospitality | GP | OWNED | 2015 | 22,000 | Ground Lease | N/A | $17,325,000 | N/A | N/A | ||
| The Woodworks | Queens, NY | Commercial | GP | OWNED | 2015 | 86,000 | Ground Lease | N/A | $48,637,412 | N/A | N/A | ||
| Jamaica Educational Complex | Queens, NY | Community Facility | GP | OWNED | 2018 | 70,000 | $20,000,000 | N/A | $24,000,000 | N/A | N/A | ||
| OWN Charter School/ Retail Space | Queens, NY | Community Facility | GP | OWNED | 2021 | 40,000 | Ground Lease | N/A | $2,378,064 | N/A | N/A | ||
| The Donut Factory | Queens, NY | Community Facility | GP | OWNED | 2021 | 23,000 | Ground Lease | N/A | $11,800,000 | N/A | N/A | ||
| Syosset Self-Storage | Syosset, NY | Commercial | Co-GP | OWNED | 2022 | 133,000 | Ground Lease | N/A | $21,380,063 | N/A | N/A | ||
| The Renaissance Charter School | Queens, NY | Community Facility | GP | OWNED | 2022 | 67,000 | $14,300,000 | N/A | $45,532,500 | N/A | N/A | ||
| NCNW Child Development Center | Bronx, NY | Community Facility | Co-GP | OWNED | 2022 | 23,000 | Ground Lease | N/A | $785,928 | N/A | N/A | ||
| 1680 Southern Blvd. | Bronx, NY | Community Facility | Co-GP | OWNED | 2022 | 20,000 | Ground Lease | N/A | $577,030 | N/A | N/A | ||
| Bronx Charter School for Children | Bronx, NY | Community Facility | GP | OWNED | 2022 | 24,000 | Ground Lease | N/A | $9,666,514 | N/A | N/A | ||
| Elmhurst Residential Development | Bronx, NY | Multi-Family | GP | OWNED | 2022 | 140,000 | $7,700,000 | N/A | $24,517,500 | N/A | N/A | ||
| Equality Charter School | Bronx, NY | Community Facility | Co-GP | OWNED | 2022 | 63,000 | Ground Lease | N/A | $28,375,342 | N/A | N/A | ||
| Melrose Supportive Housing | Bronx, NY | Community Facility | GP | OWNED | 2022 | 85,000 | $6,250,000 | N/A | $67,000,000 | N/A | N/A | ||
| Bay Terrace Residential | Queens, NY | Mixed-Use | GP | OWNED | 2022 | 225,000 | $6,000,000 | N/A | $7,500,000 | N/A | N/A | ||
| Law and Social Justice Charter School | Bronx, NY | Community Facility | Co-GP | OWNED | 2022 | 50,000 | Ground Lease | N/A | $22,748,015 | N/A | N/A | ||
| LGA Parking | Queens, NY | Commercial | Co-GP | OWNED | 2023 | 45,000 | Ground Lease | N/A | $1,200,000 | N/A | N/A | ||
| Brooklyn Rise | Brooklyn, NY | Community Facility | Co-GP | OWNED | 2023 | 25,000 | Ground Lease | N/A | $4,000,000 | N/A | N/A | ||
| Arlo Hotel | Manhattan, NY | Hospitality | Co-GP | SOLD | 2011 | 86,000 | Ground Lease | $52,000,000 | $6,500,000 | 910.0% | 8.00x | Sponsor entered a ground lease and early on in construction they pre-sold the hotel. As such all of the equity and most of the profit was received prior to the completion of the development. | |
| Even Hotel: Downtown Brooklyn | Brooklyn, NY | Hospitality | Co-GP | SOLD | 2011 | 70,000 | $4,500,000 | $23,000,000 | $6,500,000 | 1,650.0% | 5.71x | Sponsor entered a ground lease and early on in construction they pre-sold the hotel. As such all of the equity and most of the profit was received prior to the completion of the development. | |
| Woodside Retail Complex | Queens, NY | Mixed-Use | Co-GP | SOLD | 2013 | 30,000 | $10,000,000 | $15,000,000 | $10,000,000 | 22.0% | 1.20x | ||
| Pestana Hotel: Time Square | Manhattan, NY | Hospitality | Co-GP | SOLD | 2015 | 85,000 | $22,500,000 | $31,500,000 | $22,500,000 | 24.0% | 4.23x | ||
| 111- East 24th Street | Manhattan, NY | Hospitality | Co-GP | SOLD | 2015 | 40,000 | Ground Lease | $600,000 | $4,166,667 | 20.0% | 1.20x | Co-GP Exited position early to other Co-GP. | |
| Marriot 324 W 44th Street | Manhattan, NY | Hospitality | Co-GP | SOLD | 2015 | 35,000 | Ground Lease | $600,000 | $4,166,667 | 20.0% | 1.20x | Co-GP Exited position early to other Co-GP. | |
| Long Island Self-Storage | East Meadow, NY | Commercial | GP | SOLD | 2016 | 100,000 | $2,700,000 | $6,400,000 | $3,200,000 | 540.0% | 3.80x | Sponsor acquired property, went through discretionary rezoning action to allow to built Self Storage Facility, and then sold. | |
| Angel Guardian Home | Brooklyn, NY | Community Facility | GP | SOLD | 2018 | 250,000 | $13,500,000 | $17,100,000 | $19,000,000 | -13.0% | 0.69x | Sponsor sold property at a loss after a failed rezoning action. | |
| Hebrew Language Academy | Brooklyn, NY | Community Facility | Co-GP | SOLD | 2020 | 35,000 | Ground Lease | $1,482,807 | $741,404 | 5.0% | 1.10x | Co-GP Exited position early to other Co-GP. | |
| Totals/Weighted Avg. | 2,106,056 | $128,935,000 | $243,982,807 | $674,335,952 | |||||||||
The above bios and track record were provided by Barone Management and have not been independently verified by RealtyMogul.
The ground lease and school lease were executed in August 2022. Pre-development activities and minor asbestos abatement have already commenced with expected completion by July 2023. The closure of the Construction loan is anticipated in June 2023. Building plans were officially approved in April 2023, paving the way for construction to commence on schedule. The construction process is projected to conclude in December 2024, following necessary signoffs and completion milestones. The school will assume possession of the Property in December 2024, and the exit strategy is planned for June 2027.
The construction responsibilities will be managed by a highly experienced in-house construction team with a specialized focus on charter schools, boasting over 24 years of expertise in the industry. Barone Management's portfolio includes successful projects in various asset classes, including hospitality, commercial, and multi-family.
The Project is projected to be sold at the end of year four for a 6.0% forward-looking cap rate. The exit value is estimated to be $16.66M or $585.33 PSF.
CapEx Breakdown
| Hard Costs | Total Amount | PSF | ||
| New Construction | $7,112,500 | $250 | ||
| Contingency | $711,250 | $25 | ||
| Insurance | $177,813 | $6 | ||
| CM Fee | $400,078 | $14 | ||
| Total Hard Costs | $8,401,641 | $295 | ||
| Soft Costs | Total Amount | PSF | ||
| Project Legal | $75,270 | $3 | ||
| Architect/Engineering | $266,200 | $9 | ||
| Environmental/Geotech | $5,000 | $0 | ||
| Insurance | $28,726 | $1 | ||
| Permits & Filing Fees | $20,000 | $1 | ||
| Surveys | $10,250 | $0 | ||
| Controlled Inspections | $40,000 | $1 | ||
| Expediting | $40,000 | $1 | ||
| Project Accounting/Reporting | $25,000 | $1 | ||
| Development Coordination | $25,000 | $1 | ||
| Land Lease Closing Costs | $18,366 | $1 | ||
| Misc. Expense | $25,000 | $1 | ||
| Security Deposit | $158,861 | $6 | ||
| Key Money | $350,000 | $12 | ||
| Lease Carry Costs | $241,461 | $8 | ||
| Real Estate Taxes | $270,348 | $9 | ||
| Contingency | $79,974 | $3 | ||
| Total Exterior Renovation Costs | $1,679,456 | $59 | ||
| Financing Costs and Fees | Total Amount | PSF | ||
| Origination Fee | $80,738 | $3 | ||
| Broker Fee | $40,369 | $1 | ||
| Closing Costs/Reports/Admin Costs(1) | $400,208 | $14 | ||
| Title | $25,000 | $1 | ||
| Lender Legal | $20,000 | $1 | ||
| Construction Loan Interest | $327,998 | $12 | ||
| Recourse Fee | $80,738 | $3 | ||
| Acquisition Fee | $66,127 | $2 | ||
| Development Fee | $456,541 | $16 | ||
| Total Other Costs | $1,332,431 | $53 | ||
| Grand Total | $11,413,528 | $407 |
(1) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
The redevelopment of 629 Courtlandt Avenue, a 24,300 SF, three-story vacant commercial building for The Bronx Charter School for Children (BCSFC). The Sponsor has executed a 99-year ground lease with the fee owner (Lancourt Associates, LLC) creating a long-term leasehold position in the Property. The existing structure will largely remain in place and an additional floor will be created to redevelop the building into a four-story 28,500 SF educational facility that has been pre-leased to a successful and long-established charter school. The tenant (BCSFC) was K-5 until 2019/20 but received an expansion to K-8. BCSFC is fully enrolled through 8th grade and is moving its middle school program to this site. Zoning for the Property is as of right with entitlements in hand. In addition to a considerable amount of administrative and support space, the school features 11 classrooms, 2 science specifics rooms, an art room, a 3,300 SF full gymnasium, a nearly 1,750 SF cafeteria, and an outdoor terrace located on the first floor. The new additions and gut renovation to this already existing building will bring new life to the community and create a wonderful home for children of The Bronx. The Project site is located between 151st Street and 152nd Street, in the heart of The Bronx, making it a prime location with close proximity to some of the borough's most notable landmarks such as Yankee Stadium, Lincoln Hospital, Bronx Terminal Market, New York Botanical Garden, and The Bronx Zoo just to name a few.
| Tenant | SF | Lease Start | Lease End |
Rent PSF (In-Place)(1) |
Lease Type |
| Bronx Charter School for Children | 28,469 | 8/1/2024 | 9/30/2056 | $37.20 | NNN |
(1) Per Tenant Lease Agreement, base rent is $35.08 PSF based on a minimum rent factor of $5,284.69 and a current student enrollment of 189 students. Rent factor and student enrollment are subject to minimum annual escalations which are included in the Investments' rent escalation assumptions.
Sales Comparables
| 45-20 83rd Street | 34-12 10th Street | 89-17/25 161st St Jamaica | Averages | Bronx Charter School for Children | |
| Sale Date | 06-21-2022 | 09-01-2023 | 07-01-2022 | 06-01-2027 | |
| Sales Price | $45,000,000 | $16,400,000 | $57,600,000 | $39,666,667 | $16,663,567 |
| Year Built | 2022 | 2023 | 2020 | 2022 | 2024 |
| Average Size | 67,568 SF | 23,820 SF | 63,976 SF | 51,788 SF | 24,469 SF |
| Sales Price / SF | $666 | $688 | $450 | $602 | $681 |
| Cap Rate | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% |
| Occupancy at Sale | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Distance from Subject Property | 8.0 mi | 6.5 mi | 15.0 mi | 9.8 mi | |
| Notes | Sponsor currently owns assets, value represents As-Is appraised value of June 21, 2022 | Sponsor currently owns assets, value represents As-Stabilized appraised value of 9/1/2023, appraisal completed 9/13/21 |
Market Overview
The Bronx is a borough of New York City, located in the northernmost part of the city. It is home to approximately 1.4 million people and is known for its diverse population, with Hispanic/Latino representing 56% of the population and Black/African American representing around 26% of the population. Interestingly enough, approximately 30% of the population is foreign-born. If the Bronx were its own stand-alone city, it would be the eighth-largest metropolis in the United States, ranking over urban areas such as San Diego, San Antonio, and Dallas. The commercial real estate market in the Bronx has also seen growth in recent years, particularly in the areas of retail and office space. Major developments, such as the recently opened Mall at Bay Plaza, have helped to drive the retail sector in the borough. The Bronx offers a good location for a school due to several factors; Growing Population: the growth over the years correlates to a demand for more educational facilities. Affordable Real Estate: the Bronx has a more affordable real estate market compared to other areas of New York City bringing in lots of young families. Diverse Population: The Bronx offers a diverse population, which allows the school to attract students from a wide range of backgrounds. Lastly, Accessible Transportation: The Bronx has several public transportation options including buses and subways allowing kids to get to and from school easily. The Property is located within just a 10-minute walk or 0.5-mile walk from Grand Concourse Station which includes stops for 2, 3, 4, and 5 Trains.
Submarket Overview
The South Bronx, in recent years, has undergone significant redevelopment with new construction projects and investment in infrastructure. The commercial real estate market in the South Bronx has also seen growth, with new office and retail spaces being developed. The Bronx Terminal Market, for example, is a large shopping center in the South Bronx that features national retailers such as Target, Home Depot, and Best Buy. Moreover, the South Bronx has become an attractive location for new businesses, particularly in the tech and creative industries, with co-working spaces such as Bronx Coworks providing office space and resources for entrepreneurs and small business owners. The overall economic outlook for the South Bronx is positive, with new businesses and development projects bringing jobs and life to the area, with the healthcare, educational, and hospitality sectors being among the largest employers. The South Bronx is the densest area of the borough, comprising over one-third of its total population and taking up less than 20% of its land area. After decades of decline, the last 20 years have seen a substantial shift in new development across all asset classes. Despite an increase in home and rental prices, affordable options are still available in the area, making it the perfect location for growing families.
Total Capitalization
| Sources of Funds | $ Amount | $/SF |
| Debt | $8,073,802 | $284 |
| GP Equity(1) | $339,726 | $12 |
| LP Equity | $3,000,000 | $105 |
| Total Sources of Funds | $11,413,528 | $401 |
| Uses of Funds | $ Amount | $/SF |
| Hard Costs | $8,401,641 | $295 |
| Soft Costs | $1,679,456 | $59 |
| Financing | $563,737 | $20 |
| RM Technologies Fee(2) | $165,288 | $6 |
| Recourse Fee | $80,738 | $3 |
| Acquisitions Fee | $66,127 | $2 |
| Development Fee | $456,541 | $16 |
| Total Uses of Funds | $11,413,528 | $401 |
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(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 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: LIIF
- Loan Type: Construction Interim Loan
- Term: 84 Months
- Loan-To-Value: 71.0%
- Loan-To-Cost: 70.7%
- Estimated Proceeds: $8,073,802
- Interest Type: Fixed
- Annual Interest Rate: 7Y Treasury + 288bps (6.50%)
- Interest-Only Period: During Construction Only. Post-Construction, monthly payments of principal and interest based on the 25-year amortization schedule.
- Amortization: 25 Years
- Prepayment Terms: Yield Maintenance Until Month 60
- Extension Requirements: None
- Recourse Description: Full Recourse
(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt.
Barone Management intends to make distributions from Courtlandt Fund LLC as follows:
- Pari passu to all cash flows available for distribution to the Equity Investors(1) until Equity Investors(1) receive a Preferred Return of 9.0% IRR;
- 65% / 35% (65% to Equity Investors(1) / 35% to Promote/Carried Interest) of all cash flow available for distribution thereafter.
Barone Management 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 June 2025 and are projected to continue on an Annual basis thereafter. Distributions are at the discretion of Barone Management, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Barone Management will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | ||
| Effective Gross Revenue | $0 | $529,479 | $1,148,606 | $1,253,847 | |
| Total Operating Expenses | $0 | $88,406 | $339,022 | $355,710 | |
| Net Operating Income | $0 | $441,073 | $809,585 | $898,138 | |
| Project-Level Cash Flows | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($3,339,726) | $0 | $111,246 | $149,930 | $8,579,925 |
| Investor-Level Cash Flows(2) | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($3,005,753) | $0 | $100,122 | $104,880 | $6,381,089 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(2) | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($50,000) | $0 | $1,665 | $1,745 | $106,148 |
(1) Equity Investors include all members part of the Limited Partnership and General Partnership, including Barone Management.
(2) RM Technologies, LLC and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.
Certain fees and compensation will be paid over the life of the transaction; please refer to Barone Management'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 | $66,126.56 (1.0% of all base rent payable under the Ground Lease, discounted at a 5% cap rate) | Sponsor | Capitalized Equity Contribution |
| Recourse Fee | 1.0% of Debt | Sponsor | Capitalized Equity Contribution |
| Development Fee | 4.0% of Total Costs | Sponsor | Capitalized Equity Contribution |
| Construction Management Fee | 5.0% of Hard Costs | Sponsor | Capitalized Equity Contribution |
| Technology Solution Licensing Fee(2) | Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution | RM Technologies, LLC |
Capitalization (at Sponsor’s discretion) |
| Recurring Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Property Management Fee | 2.0% of Net Rent | 3rd Party Property Manager | Cash Flow |
| Administration Solution Licensing Fee(2) | 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) Fees may be deferred to reduce impact to investor distributions.
(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
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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
None of RM Technologies nor any affiliate are registered as a broker, dealer, investment adviser, or funding portal (except with respect to RM Adviser, LLC, which has no involvement in the transactions to be consummated hereby or contemplated herein and solely for the purposes hereof, shall not be deemed an affiliate or RM Technologies). They do not provide investment advice or recommend the purchase of any securities that are the subject of this agreement or the Sponsor’s offering with respect to the Project. Project Sponsor’s use of the Platform, including Project Sponsor’s license to utilize the Platform and any related technology, software and supporting services, Project Sponsor’s posting of offering documents and all related information on the Platform does not constitute the approval of or endorsement by RM Technologies or any of its affiliates of Project Sponsor’s securities offering with respect to the Project or signify the suitability thereof in any manner.
For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.