Rising Interest Rate Protection and Attractive Basis, with Ability To Stabilize at a 9.6% Cap Rate: The Sponsor is acquiring the asset at a 6.5% cap rate. This is a ~50% discount to replacement cost and a ~30% discount to recent market comps. This cost basis is protected, as supply is constrained by high construction costs and limited availability of developable land. Additionally, the Sponsor has secured a low leverage, 57% LTV fixed rate interest-only bank loan. The underwritten loan rate of 6.00% offers investors going-in positive leverage and offers more than 300 bps of positive spread vs. the stabilized cap rate of 9.6%. The going-in basis, combined with the market-to-market business plan and low leverage offers investors a unique opportunity to earn an attractive yield on a real estate investment in a rising interest rate environment.
Skyway Industrial Park is located along the I-275 corridor which travels through the Tampa/St. Petersburg, FL MSA in Pinellas County. The I-275/I-4 corridor has seen significant population growth and increased industrial demand in the post-COVID era. Pinellas County is the densest county in the State of Florida and the proximate additional growth of surrounding counties is expected to spur further growth in an industrial market that is currently exhibiting a vacancy rate of 1.6%. The Property will also benefit from the recent Gateway Expressway project delivering in 2023 for a cost of roughly $600 million, and the I-275 Bridge project with a projected cost of $865 million to be completed in late 2025. Both of these infrastructure projects will enhance the Property's highway accessibility throughout Pinellas County by further improving drive time and therefore expanding tenant demand.
The Sponsor has developed a high-touch asset management approach that has been integrated into several multi-tenant industrial flex properties in Florida and many more in the Southeast. By fostering tenant relationships, addressing cosmetic improvements, and marking rents to market through detailed analysis, the Sponsor will increase revenues at the Property within the hold period. Given the Sponsor's previous experience with multi-tenant industrial assets and their relationship with leasing brokers, the Sponsor is confident in their ability to optimize performance at the Property and provide attractive returns to investors. This is evidenced by the executed LOI that the Sponsor has secured with a tenant for $14 PSF NNN on 2,594 SF of space that has been vacant for over five years.
The Wideman Company
The Wideman Company, the Project Sponsor, is an affiliate of Susquehanna Holdings Ltd. (legacy investment manager). The Wideman Company is a cash flow driven, high-touch real estate investment company that identifies opportunities through tenant relationship building, strategic market selection, and operational precision, to deliver exceptional returns for its investors. The Wideman Company is a 50-year-old, second-generation real estate group with a storied track record of maximizing financial freedom for investors. The Wideman Company has an extensive track record of pursuing stabilized industrial and office assets in fundamentally sound, burgeoning markets and has a portfolio spanning 4 MSF of interior space. Based in Orlando, Florida, The Wideman Company efficiently manages approximately $750 million of commercial real estate throughout the Southeast and Sunbelt states.
https://www.widemanllc.com/-
Matthew WidemanCEO -
Christopher WidemanCOO -
Edmund C. Wideman, IIIChairman and Founder
Matthew Wideman is CEO of The Wideman Company, an asset management and investment platform with more than four million square feet of real estate concentrated in the southeast US. Prior to The Wideman Company, Matthew founded SourceGeo, a satellite tasking company, which led to his role as Director of Business Development for Aeros Corporation. At Aeros, Matthew worked with US Generals, DARPA representatives, and NASA, developing relationships along the way. While at Areos, Matthew was responsible for over one billion dollars of forward purchase commitments for airships developed by Aeros. In 2013, Matthew transitioned to The Wideman Company where he was responsible for the addition of 3 MSF of commercial real estate to the portfolio. Now, he continues to strive for success in the business and hopes to take The Wideman Company to greater heights.
Beyond his commitment to The Wideman Company, Matthew serves the community through a non-profit he founded called Love & Life Foundation, a 501c3 dedicated to providing relief during natural and man-made disasters internationally and domestically. Matthew is also a board member of the Advent Health Foundation Finance Committee, Orlando Police Foundation, and Ophir Capital Management. He is an involved member of YPO and BENS, business and defense-related executive organizations. While his professional commitment is robust, Matt always makes time for family. Matt and his wife Paige enjoy traveling and outdoor activities with their four boys, Cooper, Barron, Asher, and Zion. Matt and Paige are also anxiously awaiting the arrival of their fifth child, a baby girl.
Christopher Wideman is the COO of The Wideman Company. Prior to The Wideman Company, Christopher was an industrial sales and leasing broker with CAPEX Real Estate in New York where he specialized in industrial retail developments in Brooklyn. In 2015, Christopher teamed up with his brother, Matthew Wideman, to conduct operations and asset management for The Wideman Company. Chris oversees the administrative, financial, and operational components of The Wideman Company portfolio. While with The Wideman Company, Christopher has coordinated due diligence for over 500M of acquisitions and has actively managed those assets with extreme diligence. A local Floridian, Chris received his MBA from Crummer School of Business and resides in Winter Park, FL with his wife, Trish, and 3 children, Noland, Jovie, and Arden. Chris is a coach for his son's youth football program, an active community member, and a committed family man.
Edmund C. Wideman, III’s career began before graduating in 1964 from the University of Pennsylvania’s Wharton School of Business. A true entrepreneur, his business acumen was honed in the sectors of real estate, insurance, mining, construction, development, and family entertainment. Born and raised in the coal region of Northeastern Pennsylvania, Ed began his development career in 1970 with 3 stand-alone USPS facilities, which he still owns to this day. His development experience expanded from there into assisted living facilities, retail, and SFR developments. After almost 50 years of experience developing, managing, and disposing of commercial real estate in Pennsylvania, Ed moved main operations to Orlando, Florida in 1991, where he assisted in the development of International Drive, a robust retail and hotel located in the heart of Orlando, FL. Today, Ed continues to oversee the management of commercial real estate investments throughout the United States and manages a franchise operation of Ripley’s Believe it or Not! Museums.
| Property Name | City, State | Asset Type | Status | Acq Date | SF | Purchase Price | Sales Price or Estimated Value | IRR(1) | EMx(2) |
| Truist Tower | Orlando, Florida | Office | OWNED | 12-07-2017 | 209,035 | $90,000,000 | $110,000,000 | 5.60% | 1.33X |
| Perimeter QOZB | Greenville, South Carolina | Industrial Flex | OWNED | 12-06-2019 | 125,000 | $12,300,000 | $13,710,000 | 10.95% | 1.39X |
| AMAZON SDF1 | Campbellsville, Kentucky | Industrial | OWNED | 03-09-2021 | 727,000 | $45,000,000 | $48,456,105 | 5.91% | 1.10X |
| Intellicenter | Lawrenceville, Georgia | Office | OWNED | 04-01-2015 | 150,011 | $32,500,000 | $44,700,000 | 24.86% | 1.53X |
| 200 South Orange | Orlando, Florida | Office | SOLD | 01-01-2014 | 130,000 | $18,800,000 | $28,900,000 | 13.52% | 2.17X |
| 201 Regency | Charlotte, North Carolina | Office | OWNED | 07-01-2015 | 32,956 | $7,025,000 | $10,874,380 | 16.33% | 2.90X |
| 250 Feaster | Greenville, South Carolina | Industrial Flex | OWNED | 07-01-2015 | 45,000 | $1,535,000 | $2,580,000 | 23.79% | 3.57X |
| 240 Feaster | Greenville, South Carolina | Industrial Flex | OWNED | 07-01-2014 | 20,000 | $1,562,000 | $1,500,000 | 7.47*% | 1.76X |
| Papago | Tempe, Arizona | Office | OWNED | 01-27-2020 | 213,026 | $90,000,000 | $119,500,000 | 21.50% | 1.79X |
| Portside | Charleston, South Carolina | Office | OWNED | 12-30-2020 | 114,093 | $48,386,782 | $57,800,000 | 17.50% | 1.42X |
| Keller Center | Maitland, Florida | Office | OWNED | 06-01-2018 | 164,880 | $27,950,000 | $36,695,060 | 19.24% | 2.18X |
| 1110 Hibiscus | Melbourne, Florida | Industrial | OWNED | 06-01-2017 | 112,489 | $15,250,000 | $21,689,111 | 17.60% | 2.42X |
| Cornwall | Sanford, Florida | Industrial | OWNED | 07-01-2015 | 95,300 | $4,841,000 | $10,000,000 | 17.60% | 3.04X |
| 1101 Knoxville | Knoxville, Tennessee | Office | OWNED | 08-17-2015 | 50,759 | $4,790,000 | $8,450,000 | 21.20% | 3.76X |
| Genpact | Jacksonville, Florida | Office | OWNED | 12-31-2010 | 335,491 | $24,800,000 | $55,608,451 | 26.95% | 7.69X |
| Windcross | Franklin, Tennessee | Office | OWNED | 06-30-2011 | 133,200 | $23,000,000 | $40,426,030 | 24.11% | 5.54X |
| 905 Airport | West Chester, Pennsylvania | Industrial | OWNED | 06-30-2010 | 128,600 | $11,750,000 | $14,618,823 | 18.90% | 3.13X |
| 3950 HG Realty | Duluth, Georgia | Office | OWNED | 12-31-2012 | 102,547 | $14,480,000 | $20,666,112 | 20.44% | 3.27X |
| Kingsport Fedex | Kingsport, Tennessee | Industrial | OWNED | 06-30-2010 | 147,626 | $9,225,000 | $15,100,355 | 34.18% | 12.76X |
| Auburn Hills Realty | Auburn Hills, Detroit | Industrial | OWNED | 12-31-2013 | 94,000 | $12,050,000 | $17,303,100 | 26.88% | 3.89X |
| 1630 Siemens | Irving, Texas | Office | OWNED | 06-30-2012 | 134,292 | $8,025,000 | $7,415,451 | 15.73% | 2.32X |
| 430 ESI | Norcross, Georgia | Office | OWNED | 09-30-2012 | 55,000 | $4,500,000 | $9,650,000 | 31.11% | 6.68X |
| Brookfield Realty | Greenville, South Carolina | Office | OWNED | 12-31-2011 | 193,265 | $25,600,000 | $43,998,319 | 25.42% | 5.58X |
| Metric | Winter Park, Florida | Industrial Flex | OWNED | 01-21-2022 | 36,000 | $4,710,000 | $5,353,378 | 14.00% | 1.14X |
| 217 Oak | Lake Jackson, Texas | Office | OWNED | 01-15-2012 | 3,000 | $900,000 | $1,400,000 | 10.10% | 1.56X |
| FedEx Ground | Midland, Georgia | Industrial | OWNED | 07-01-2022 | 71,999 | $6,795,000 | $7,250,000 | 1.00% | 1.07X |
| FedEx Ground | Kinston, North Carolina | Industrial | OWNED | 09-31-2022 | 77,160 | $5,500,000 | $6,000,000 | 3.24% | 1.09X |
| Longwood Trade Center | Longwood, Florida | Industrial | OWNED | 01-01-2002 | 30,100 | $1,275,000 | $4,000,000 | ||
| Totals/Weighted Avg. | 3,731,829 | $552,549,782 | $763,644,675 |
(1) Assets still owned IRRs reflect returns generated by project cash flows and have not been independently verified by RealtyMogul.
(2) The above returns represent estimated returns to date and returns following disposition.
(3) The Wideman Company, the Project Sponsor, is an affiliate of Susquehanna Holdings Ltd. (legacy investment manager). The above track record is representative of both The Wideman Company and Susquehanna Holdings investments.
(4) The bios and track record were provided by The Wideman Company and have not been independently verified by RealtyMogul.
Skyway Industrial Park is expected to close in May 2023. The asset, built in 1989, is a 232,206 SF Class B industrial facility in a Class A MSA. The proximity to the I-275 corridor allows for efficient access to neighboring markets and connects the Central Florida I-4 corridor to the Tampa/St. Petersburg, FL MSA. The Property is currently 97.6% occupied and will be 98.6% when the Sponsor closes on the Property due to an LOI in hand on 2,594 SF of space for $14.00 PSF NNN.
The Seller has not extracted value from asset management and has focused on capital appreciation purely on the tailwinds of the market. The Seller's focus was on increasing occupancy and the weighted average lease term with a minimal capital infusion which has resulted in a rent roll that has rents substantially below market. The Sponsor intends to prioritize the tenant-landlord relationship to optimize revenue and expenses. The Wideman Company’s expertise in high-touch asset management affords them the opportunity to add tangible value to the Property and the tenants through attention to minor deferred items and fulfilling basic tenant needs. The team at Wideman Company understands that there is tremendous value in communication with tenants when it comes to addressing their basic needs so that they’re more amenable to extending their leases at market rents.
Current vacancy for industrial products in Pinellas County is at approximately 1.6% and market data suggests that industrial asking rents in the submarket start at $8.00 PSF NNN with most comparable space signing leases at $9.00 - $11.00 PSF NNN. Skyway's weighted average rent is $5.11 PSF NNN across the 9 tenants. With significant upside on marking rents to market, locational and potential local development tailwinds, and overall economic tailwinds in Florida, there is a healthy upside to this asset. 50% of the rentable area is secured by leases that expire between 2023-2026 presenting an opportunity to mark-to-market those rents. Please see the lease comparables section of web content and the financial analysis for additional context.
The St. Petersburg non-profit is committing to a capital investment in cold storage to use this facility as its main distribution hub. They have accepted a lease at $6.50 PSF with no TI obligation on Landlord and the tenants plan to invest approximately $3,000,000 of their own capital into a cold storage build-out which will be integral to their ability to use that space, and the space will become mission critical to their overall business.
Roger's Garment Restoration's lease is currently well below market rents for full AC climate-controlled space. Long term, they are expanding their business quickly and are looking to expand into additional space when it becomes available. Epodex (LED January 2025) is a potential for that new space and once again, provides an opportunity to mark-to-market.
Oakhurst Sign accounts for 81,266 SF of space (or 35% of GLA) with a lease expiration date of March 2029. The lease was signed by the Seller with limited negotiation at $4.75 PSF NNN. Rents have materially increased since lease commencement as similar space is going for $9.00 PSF NNN. The Sponsor plans to approach the tenant for an early lease extension in exchange for tenant improvements and/or space expansion prior to selling the Property. This has not been underwritten in the base case proforma and represents a potential additional upside.
On the acquisition side, the Sponsor has secured a 5-year 57% LTV fixed rate interest-only loan with BankUnited. The rate is fixed at 2.20% above the 5-year treasury (with an indicative rate of 5.8% as of 4/18/23). The loan has step-down pre-payment penalties of 3% in year 1, 2% in year 2, 1% in year 3, and .5% in year 4. The Wideman Company has a long-standing relationship with BankUnited and has used them for financing several acquisitions in excess of $100M. The loan rate will be locked 3 days prior to the closing date for Skyway and the Sponsor has underwritten a 6.0% interest rate in case there is movement in the 5-year treasury before closing.
CapEx Breakdown
| Total Amount | PSF | |
| Irrigation and Landscaping | $35,000 | $0.15 |
| Parking Lot Repair | $22,000 | $0.09 |
| Gutter Repair | $18,000 | $0.08 |
| Gate Repair | $12,000 | $0.05 |
| Exterior Lighting Upgrades | $25,000 | $0.11 |
| Paint and Roll-up Door Repair | $15,000 | $0.06 |
| Total Capital Improvements | $127,000 | $0.55 |
Skyway Industrial Park Drone Video
Skyway Industrial Park is a Class B, concrete block and metal constructed building. The Park is made up of 4 parcels and has a total of approximately 16 dock high and 18 grade-level truck access points. The facilities feature heavy power, essential in light manufacturing operations. All facilities are 100% climate controlled and have an average warehouse clear height of 19'. Skyway has a robust parking ratio of 1.52 per 1,000 SF, is efficiently subdivided for maximum accessibility, and is positioned in an A location with easy ingress and egress.
Rent Roll
| Tenant | SF | % of Property | Lease Start | Lease End | Rent PSF | Lease Type |
| Oakhurst Signs | 12,151 | 5.2% | 11-2021 | 03-2029 | $4.75 | NNN |
| Universal Parts | 18,600 | 8.0% | 04-2020 | 03-2025 | $4.99 | NNN |
| St. Petersburg Free Clinic | 36,383 | 15.7% | 04-2022 | 05-2029 | $6.70 | NNN |
| Oakhurst Signs | 69,115 | 29.8% | 11-2021 | 03-2029 | $4.75 | NNN |
| Epodex | 11,461 | 4.9% | 01-2022 | 01-2025 | $5.75 | NNN |
| Rogers Garment Restoration | 11,568 | 5.0% | 08-2022 | 04-2026 | $5.75 | NNN |
| Rogers Garment Restoration | 18,342 | 7.9% | 06-2021 | 06-2026 | $3.32 | NNN |
| Universal Engineering Service | 5,940 | 2.6% | 01-2019 | 12-2023 | $4.77 | NNN |
| Celebrity Kids Club of Pinellas | 3,010 | 1.3% | 03-2012 | MTM | $8.29 | Modified Gross |
| Coast to Coast Event Rentals | 13,250 | 5.7% | 02-2021 | 01-2024 | $4.91 | NNN |
| Film Source International | 14,750 | 6.4% | 07-2020 | 12-2024 | $5.75 | NNN |
| Film Source International | 12,000 | 5.2% | 01-2023 | 12-2024 | $5.75 | NNN |
| VACANT(1) | 2,594 | 1.1% | 06-2023 | 07-2028 | $14.00 | NNN |
| VACANT | 3,042 | 1.3% | NNN | |||
| Totals / Averages | 232,206 | 100% | $5.33 |
(1) LOI for new tenant, at $14 PSF NNN, to be executed at closing, reflected in rent roll
Lease Comparables
| 2233 3rd Ave. S., St. Petersburg, FL | 10344 66th St. N., Pinellas Park, FL | 2401 N 72nd St., St. Petersburg, FL | 6850 Cross Bayou Dr., Seminole, FL | 3201 44th Ave N., St. Petersburg, FL | 3244 44th Ave N., St. Petersburg, FL | 2442 N 23rd St., St. Petersburg, FL | 9400 International Ct. N, St. Petersburg, FL | 4700 110th Ave N., Clearwater, FL | Averages | Skyway Industrial Park | |
| Distance from Subject Property | 2.4 miles | 13.2 miles | 6.8 miles | 13.3 miles | 2.5 miles | 2.5 miles | 4.5 miles | 9.6 miles | 12.7 miles | 7.5 miles | |
| Year Built | 1959 | 2020 | 1964 | 1963 | 1972 | 1963 | 1955 | 1976 | 1988 | 1973 | 1989 |
| Building NRSF | 27,758 SF | 20,000 SF | 42,000 SF | 25,987 SF | 9,540 SF | 30,856 SF | 31,000 SF | 53,600 SF | 24,626 SF | 29,485 SF | 232,206 SF |
| Date Signed | 06-01-2021 | 06-01-2022 | 12-01-2021 | 11-30-2021 | |||||||
| Rental Rate (Per SF) | $15.75 | $11.00 | $10.00 | $10.50 | $18.00 | $11.80 | $8.00 | $9.23 | $9.00 | $11.48 | $5.33 |
| Tenant Lease Size (SF) | 8,000-27,758 SF | 20,000 SF | 42,000 SF | 25,987 SF | 9,540 SF | 30,856 SF | 31,000 SF | 20,000 SF | 11,190 SF | 23,822 SF | |
| Lease Type | NNN | NNN | NNN | NNN | Modified Gross | NNN | NNN | NNN | NNN |
Sales Comparables
| 4601 N 34th St., St. Petersburg, FL | 3705 62nd Ave N., Pinellas Park, FL | 5210 Causeway Blvd., Tampa, FL | 8701 Florida Mining Blvd., Tampa, FL | 12501 Telecom Dr., Tampa, FL | 10350 Windhorst Rd., Tampa, FL | 5210 S 16th Ave., Tampa, FL | 2233 3rd. Ave. S., St. Petersburg, FL | Averages | Skyway Industrial Park | |
| Sale Date | 04-26-2022 | 12-22-2022 | 11-16-2022 | 10-03-2022 | 04-08-2022 | 10-03-2022 | 02-16-2022 | 01-15-2022 | 07-31-2022 | 05-30-2023 |
| Sales Price | $13,000,000 | $12,475,000 | $12,933,000 | $12,525,109 | $20,500,000 | $9,720,588 | $36,069,952 | $4,050,000 | $16,746,236 | $18,500,000 |
| Year Built | 1975 | 2007 | 1973 | 2006 | 1987 | 2020 | 1989 | 1959 | 1994 | 1989 |
| Net Rentable SF | 110,833 SF | 100,100 SF | 146,975 SF | 110,000 SF | 150,500 SF | 107,200 SF | 360,000 SF | 27,768 SF | 155,087 SF | 232,206 SF |
| Average Unit Size | 110,833 SF | 100,100 SF | 146,975 SF | 27,500 SF | 150,500 SF | 53,600 SF | 360,000 SF | 27,758 SF | 135,644 SF | 232,206 |
| Sales Price / Unit | $117 | $125 | $88 | $114 | $136 | $91 | $100 | $146 | $110 | $80 |
| Sales Price / SF | $117 | $125 | $88 | $114 | $136 | $91 | $100 | $146 | $110 | $80 |
| Occupancy at Sale | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 97.6% |
| Distance from Subject Property | 6.4 miles | 8.0 miles | 29.0 miles | 30.0 miles | 37.0 miles | 34.0 miles | 29.0 miles | 2.4 miles | 24.8 miles |
Market Overview
Tampa and St. Petersburg have emerged as key industrial markets as population growth along the I-4 corridor has sharply increased. Rapid growth in demand has left the Tampa/St. Petersburg market struggling to find quality industrial space despite record-setting new deliveries. In the industrial asset class, net absorption has outpaced new deliveries every quarter of 2022 which has driven rents across the Tampa/St. Petersburg market to $9.00 PSF NNN. Developers are attempting to satisfy demand, but the market does not have sufficient centrally located land to construct new deliveries that are attractive to industrial users. Additionally, local zoning committees are hesitant to issue new zoning for industrial projects, further constraining supply.
The bulk of industrial assets is concentrated around the I-275 highway with a large pocket north of Skyway in the Gateway submarket and big box new deliveries in Sarasota, south of Skyway. Considering the demand in the industrial space, companies are forced to lease space either south or north of the more central markets of Tampa and Clearwater.
As absorption and deliveries have smashed record highs, vacancy rates continue to trend down toward historic lows. The data points to the conclusion that tenant demand is outpacing the development pipeline by a significant margin. According to JLL's Q4 2022 industrial market report, estimated tenant requirements in 2023 are in excess of 30 MSF and only 3.1 MSF are set to be delivered in that time. The rift between demand and new supply is going to further drive asking rates and sentiment for existing assets in the market.
Submarket Overview
Historically, Pinellas County was a manufacturing hub and continues to provide a significant manufacturing labor force for surrounding companies. Pinellas is the most densely populated county in Florida and is suffering from tight supply in the industrial space. It is our view that the surrounding labor force in Pinellas is not replaceable if tenants were to move out of the county into new developments in either Ocala to the North or Sarasota to the South.
A recent redevelopment was announced for Tropicana Field in St. Petersburg just North of Skyway. The plan, set forth by the Tampa Bay Rays and real estate developer Hines, calls for a 7-million-square-foot redevelopment and a mixed-use district, including more than 5,700 multi-family housing units, 1.4 million square feet of office space, 300,000 square feet of retail space, 700 hotel rooms, 600 senior living residences, a 2,500-person entertainment venue, and various civic uses.
According to a Hines/Rays press release, “the site would include over 20 new urban blocks and provide public benefit on over half of the land area, in addition to nine sustainability strategies that will advance the city’s priorities and position St. Petersburg as a leading city for large-scale resilience. The new development will cost around $4 billion, a significant capital influx for the region and a tailwind for landlords in the immediate area.
Total Capitalization
| Sources of Funds | $ Amount | $/SF |
| Loan | $10,500,000 | $45 |
| LP Equity | $8,550,000 | $37 |
| GP Equity(1) | $950,000 | $4 |
| Total Sources of Funds | $20,000,000 | $86 |
| Uses of Funds | $ Amount | $/SF |
| Purchase Price | $18,500,000 | $80 |
| Acquisition Fee | $370,000 | $2 |
| Legal/3rd parties | $230,000 | $1 |
| Immediate Repairs(2) | $127,000 | $1 |
| Working Capital/Leasing Costs(2) | $488,000 | $2 |
| Guaranty Fee | $157,500 | $1 |
| Financing/Closing Costs(3) | $127,500 | $1 |
| Total Uses of Funds | $20,000,000 | $86 |
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(2) Sources and Uses are net of $275k seller credit for additional CapEx items.
(3) 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: Bank United
- Term: 60 Months
- Loan-to-Value (LTV): 56.8%
- Loan-to-Cost (LTC): 52.5%
- Estimated Proceeds: $10,500,000 (2)
- Interest Type: Fixed
- Annual Interest Rate: 2.2% + 5yr T (indicative rate of 5.8% as of April 13. Underwritten using 6.0% to account for potential rate increases before May Closing. Rate is locked 3 days prior to closing)
- Interest-Only Period: 60 Months
- Prepayment Terms: Prepayment Fee
- Year 1: 3%
- Year 2: 2%
- Year 3: 1%
- Year 4: 0.5%
- Extension Requirements: None
- Recourse Description: Non-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.
(2) Bank United's term sheet shows $10.6M but Sponsor will only close on $10.5M. Figures above reflect lower loan proceeds.
The Wideman Company intends to make distributions from Skyway Realty RM, LLC as follows:
- 100% to the Equity Investors until the Equity Investors receive all accrued but unpaid Preferred Return of 7.0% IRR;
- 70% / 30% (70% to Equity Investors / 30% to Promoted/Carried Interest) of excess cash flow to a 14.0% IRR;
- 50% / 50% (50% to Equity Investors / 50% to Promote/Carried Interest) of excess cash flow thereafter.
The Wideman Company intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).
Distributions are expected to start in September 2023 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of The Wideman Company, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Equity Investors include all members part of the Limited Partnership and General Partnership, including The Wideman Company.
The Wideman Company will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | ||
| Effective Gross Revenue | $2,013,159 | $2,076,874 | $2,318,894 | $2,436,717 | |
| Total Operating Expenses | $812,721 | $837,103 | $862,216 | $888,082 | |
| Net Operating Income | $1,200,438 | $1,239,771 | $1,456,678 | $1,548,635 | |
| Project-Level Cash Flows | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($9,500,000) | $527,650 | $552,565 | $775,143 | $8,387,016 |
| Investor-Level Cash Flows(1) | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($5,000,000) | $227,710 | $240,824 | $357,970 | $8,387,016 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(1) | |||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Net Cash Flow | ($50,000) | $2,277 | $2,408 | $3,580 | $83,870 |
(1) 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 The Wideman Company'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 | 2.00% of Purchase Price | Sponsor | Capitalized Equity Contribution |
| Guaranty Fee | 1.50% of Loan Proceeds | 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 |
| Asset Management Fee | 2.00% of Aggregate Annual Effective Rents | Sponsor | Cash Flow |
| Property Management Fee | 3.00% to 5.00% of the Effective Gross Rents generated from the Project (but not to exceed the amount reimbursable under tenant leases at the Project) - payable on a monthly basis | Third-Party | 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.