RM Communities is a sister-company to RealtyMogul, one of the leading online platforms for real estate investing. RM Communities is an owner/operator of multifamily assets with a proprietary playbook to deliver strong risk-adjusted returns. RM Communities has grown its real estate portfolio to over 2,300 multifamily units and nearly $400 million(1) in real estate with a fully dedicated team of acquisitions, underwriting, and asset management professionals.
Kings Landing is a one-of-a-kind multifamily mixed-use asset located in Creve Coeur, an affluent suburb of St. Louis, MO. Creve Coeur has one of the highest median area incomes in the MSA at $96K.
The Property features unique one, two, and three-bedroom floor plans. Kings Landing has four stories and an adjacent parking structure with 275 spaces. The Property offers amenities such as a 24-hour fitness center, courtyard, and veranda with a grilling station, community clubhouse, business center, and off-leash dog park. The Property is currently 98% occupied.
Unit Mix:
| Units | Type | Unit SF | Total SF | In-Place Rent | Stabilized Rent | Rent /SF |
| 4 | 1 Bed / 1 Bath (Small) | 670 | 2,680 | $1,079 | $1,300 | $1.94 |
| 27 | 1 Bed / 1 Bath (Medium) | 814 | 21,978 | $1,224 | $1,450 | $1.78 |
| 8 | 1 Bed / 1 Bath (Large) | 965 | 7,720 | $1,233 | $1,550 | $1.61 |
| 16 | 1 Bed / 2 Bath Loft | 1,313 | 21,010 | $1,479 | $1,825 | $1.39 |
| 1 | 1 Bed / 2 Bath Loft (Large) | 1,490 | 1,490 | $1,671 | $2,000 | $1.34 |
| 55 | 2 Bed / 2 Bath (Small) | 1,113 | 61,215 | $1,413 | $1,860 | $1.66 |
| 31 | 2 Bed / 2 Bath (Medium) | 1,228 | 38,068 | $1,456 | $1,895 | $1.54 |
| 2 | 2 Bed / 2 Bath (Large) | 1,270 | 2,540 | $1,522 | $2,000 | $1.57 |
| 8 | 3 Bed / 2 Bath | 1,740 | 13,920 | $2,076 | $2,550 | $1.47 |
| 152 | 1,121 | 170,621 | $1,415 | $1,799 | $1.61 | |
| 2 | Additional Studios | 500 | 1,000 | $0 | $1,200 | $2.40 |
Retail Units and Rent Schedule:
| Unit | Tenant | Unit SF | Rent/SF NNN | Annual Rent | Lease Term / Expiration | Lease Type |
| 1 | Walgreens Community | 1,855 SF | 30.0 | $55,742 | 10.1 years – 4/30/2027 | NNN |
| 2 | Poke Munch Restaurant | 1,000 SF | 30.3 | $30,259 | 4.8 years – 10/31/2022 | NNN |
| 3 | Mulqueeny Eye Center | 3,098 SF | 36.3 | $112,406 | 10 Years – 7/31/2024 | NNN |
| 4 | Vacant/Proposed | 3,276 SF | 26.0 | $85,176 | 10 Years | NNN |
Lease Comparables
| Vanguard Heights | The Vue at Creve Coeur | The Alinea At Town | Comp Averages | Kings Landing (Subject) | |
| Year Built | 2016 | 2017 | 2016 | 2014 | 2005 |
| $ (1x1) M | $1,745 | $1,564 | $1,400 | $1,570 | $1,450 |
| SF (1x1) M | 805 | 843 | 754 | 801 | 814 |
| $/SF (1x1) M | $2.17 | $1.86 | $1.86 | $1.96 | $1.78 |
| $ (2x2) S | $2,391 | $2,125 | $2,355 | $2,290 | $1,860 |
| SF (2x2) S | 1,100 | 1,084 | 1,103 | 1,096 | 1,113 |
| $/SF (2x2) S | $2.17 | $1.96 | $2.14 | $2.09 | $1.67 |
| $ (2x2) M | $2,391 | $2,295 | $2,345 | $2,344 | $1,895 |
| SF (2x2) M | 1,100 | 1,257 | 1,103 | 1,153 | 1,228 |
| $/SF (2x2) M | $2.17 | $1.83 | $2.13 | $2.03 | $1.54 |
| $ (3x2) | $3,169 | $2,655 | $2,912 | $2,550 | |
| SF (3x2) | 1,509 | 1,365 | 1,437 | 1,740 | |
| $/SF (3x2) | $2.10 | $1.95 | $2.03 | $1.47 |
*Rents shown are post-renovation
Sales Comparables
| Property Name | Submarket | Property Address | City, State | Sale Date | Sale Price | # of Units | Building SQFT* | Price Per Unit | Price Per SQFT | Year Built | Building Class |
| Kings Landing (subject) | Creve Coeur | 618 N. New Ballas Rd | Creve Coeur, MO | 7/1/2021 | $40,100,000 | 154 | 217,688 | $263,816 | $184 | 2005 | A |
| Vanguard Heights | North Outlying Mid | 10362 Old Olive Street | Creve Coeur, MO | 4/4/2017 | $39,600,000 | 174 | 75,946 | $227,586 | $521 | 2016 | A |
| Cortona at Forest Park | Cheltenham | 5800 Highlands Plz | Saint Louis, MO | 1/27/2021 | $71,100,000 | 278 | 222,908 | $255,755 | $319 | 2014 | A |
| Clayton on the Park | Downtown Clayton | 8025 Bonhomme Ave | Clayton, MO | 4/11/2019 | $71,500,000 | 213 | 267,375 | $335,681 | $267 | 2000 | B |
| Lofts at the Highlands | Cheltenham | 1031 Highlands Plaza | Saint Louis, MO | 3/28/2018 | $44,400,000 | 200 | 343,656 | $222,000 | $129 | 2005 | A |
| Alinea Town and Country | North Outlying Mid | 1283 Daylight Dr | Des Peres, mo | 9/19/2017 | $58,400,000 | 254 | 310,000 | $229,921 | $188 | 2016 | A |
* Based on gross building area (GBA) per CoStar
Sale and lease comps were obtained from CoStar and Axiometrics.
Total Capitalization
| Sources of Funds | Amount | $/Unit |
| Senior Loan | $33,335,501 | $219,313 |
| Equity | $12,323,031 | $81,073 |
| Total Sources of Funds | $45,658,532 | $300,385 |
| Uses of Funds | Amount | $/Unit |
| Purchase Price | $40,100,000 | $263,816 |
| Loan Fee | $333,355 | $2,174 |
| Closing & Legal Costs | $305,000 | $2,007 |
| CapEx Budget | $3,708,980 | $21,844 |
| Acquisition Fee | $802,000 | $5,276 |
| Taxes & Insurance Escrow | $225,297 | $1,813 |
| Working Capital | $130,000 | $855 |
| Total Uses of Funds | $45,658,532 | $300,385 |
The numbers represented above can change prior to closing depending on final loan proceeds, property condition assessments, appraisals, final closing costs, and other lender-mandated expenses.
The expected terms of the debt financing are as follows:
- Loan Type: Bridge
- Total Loan Amount: $33,335,501
- Estimated Rate (Floating): LIBOR* + 3.15%
- Amortization: 30 years
- Term: 5 Years
- Interest Only: 3 years
- Initial Loan-to-Value: 73.9%
- Loan-to-Cost: 75.0%
- Extension Options: Two 12-Month Options
*LIBOR floor of 0.25% and rate cap of 2.00%
NOTE: RM Communities is expecting to refinance with long-term agency debt at the end of year 3. The refinance is assumed to be a 7-year term at 70% LTV, 4.00%, and with 3 years of interest only.
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.
A substantial portion of the total acquisition for the Property will be paid with borrowed funds. The use of borrowed money to acquire real estate is referred to as leveraging. Leveraging increases the funds available for investment or development purposes, on the one hand, but also increases the risk of loss on the other. If the Company were unable to pay the payments on the borrowed funds (called a "default"), thelender might foreclose, and the Company could lose its investment in its property.
RM Communities will make distributions from Kings Landing Investors, LLC to investors as follows:
Operating Cash Flow
- 8% Preferred Return
- 70%/30% (70% to Members/30% to RM Communities) to a 15% IRR
- 50%/50% (50% to Members/50% to RM Communities) thereafter
Capital Event
- 8% Preferred Return
- Return of Capital
- 70%/30% (70% to Members/30% to RM Communities) to a 15% IRR
- 50%/50% (50% to Members/50% to RM Communities) thereafter
Note: 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). Distributions are expected to start in February 2022 and are projected to continue on a quarterly basis thereafter. These distributions are at the discretion of RM Communities, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Cash Flow Summary
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Reversion | |
| Effective Gross Income (EGI) | $3,032,602 | $3,489,486 | $3,763,723 | $3,986,986 | $4,148,491 | $4,299,365 |
| Expenses | $1,240,686 | $1,281,655 | $1,310,595 | $1,386,491 | $1,421,230 | $1,456,013 |
| Net Operating Income (NOI) | $1,791,917 | $2,207,831 | $2,453,128 | $2,600,495 | $2,727,261 | $2,843,352 |
| Total Property Cash Flow | $699,046 | $1,015,894 | $3,128,795* | $1,107,967 | $19,779,473 |
*Proceeds include refinance in year 3
Projected Investor Cash Flows
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Earnings to Investor - Hypothetical $50,000 Investment |
($50,000) | $2,818 | $4,104 | $12,677 | $4,101 | $68,376 |
NO ASSURANCE OF RETURN: The Company's pro-forma projections are based on assumptions regarding future events, such as the timing and extent of the recovery of the residential market and the stabilization of the debt markets. While the Manager believes that these assumptions are reasonable and achievable, the likelihood of its occurrence is subject to many factors that are not within the control of the Company or its Manager and that could impair the ability of the Company to meet its projections.
Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid(1):
| One-Time Fees: | |||||
| Type of Fee | Amount of Fee | Received By | Paid From | ||
| Acquisition Fee | 2.0% of Purchase Price | RM Communities | Capitalized Equity Contribution | ||
| Construction Management Fee | 5.0% of Capital Improvement Budget | Village Green, Third Party Property Manager | Capitalized Equity Contribution | ||
| Recurring Fees: | |||||
| Type of Fee | Amount of Fee | Received By | Paid From | ||
| Asset Management Fee | 1.5% of Effective Gross Income | RM Communities | Distributable Cash | ||
| Property Management Fee | 3.0% of Effective Gross Income and Incentive Fee if NOI Exceeds Budget |
Village Green, Third Party Property Manager | Distributable Cash | ||
The above table is a summary and there may be additional fees and expenses associated with this offering. Please refer to the Private Placement Memorandum for further details.
(1) Fees may be deferred to reduce impact to investor distributions
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.
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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.