Sentinel Peak Capital Partners LLC (“Sentinel”, “Sentinel Peak” or “SPCP”) is a private, vertically integrated, commercial real estate investment firm primarily focused on the acquisition and repositioning of multifamily properties located in major metropolitan markets throughout Texas. Based in Dallas, Texas, Sentinel seeks to enhance the value of each asset it acquires across all phases of the business cycle by (i) acquiring properties below historical replacement cost, (ii) providing active oversight of the construction and renovation process, and (iii) making targeted capital investments to address physical and operational deficiencies with the goal of driving increased rent growth and reduced maintenance expenses.
Established in 2015, Sentinel was co-founded and is managed by Richard Chesney and Ryan Beaupré (the “Principals”). Sentinel targets multifamily properties built between 1980 and 2008 that the Principals believe can be repositioned to achieve superior returns for its limited partners. In order to reposition each asset, Sentinel deploys investment capital to address capital structure or physical and operating deficiencies that have caused the asset to under-perform relative to its competitive set. Once these deficiencies have been addressed, depending on market conditions, Sentinel seeks to either refinance the asset to recapture investor capital and hold long term, or sell the asset immediately following its repositioning.
The Project is located in Fort Worth, Texas, directly south of Interstate 30. Following the acquisition of the Project, the Partnership will undertake an approximately $1,200,000 capital improvement plan to address certain operational and physical deficiencies at the Project that the Sponsor believes will allow the Project to compete with recently renovated properties in the immediate area. The Project is currently named Rocco Apartment Homes (“Rocco”), but the Manager may choose to change the name of the project during the due diligence phase.
Constructed in 1984, the Property is improved with fifteen (15) two-story buildings containing three hundred and twelve (312) units, one (1) pool, and one (1) leasing office building. The residential buildings are made up of brick and wood siding atop a concrete slab on grade foundation. The exterior veneers are a combination of Hardie plank, cedar plank, and brick with pitched composition roofs. The Property's site encompasses 11.75 acres (37.7 units per acre), 505 total parking spaces consisting of 449 regular parking spaces, 36 covered parking spaces, and 20 handicap spaces. The Project contains 312 units with a mix of 209 one-bedroom units (67%) and 103 two-bedroom units (33%). Per the June 7, 2023 rent roll, the Project is 70.5% physically occupied with 88 vacant units. The Property's units consist of two-hundred and twelve (212) soft-surface countertops, while the remaining one hundred (100) units are renovated with hard-surface quartz countertops. The Project has been owned by its current ownership since 2021 and has received a light renovation from the current owner. Property amenities include one (1) swimming pool, one (1) leasing center, and one (1) playground.
The Property currently has three levels of finish out (“classic”, “summit,” and “quartz”), and SPCP does not plan to change this mix as we believe it is appropriately suited for this submarket and will allow SPCP to position the Property to capture the entire spectrum renters within the submarket. Being able to market the Property to the entire leasing spectrum will allow SPCP to achieve its occupancy and stabilization goal as quickly as possible. Aside from turning the current vacant unit stock into a leasable condition, the Sponsor plans to inject capital into the asset to address some deferred maintenance items on the exterior of the Property, which will aid in accomplishing their leasing goals.
Unit Mix
| Unit Type | # of Units | Avg SF/Unit | Avg Rent (Proforma) |
Rent PSF (Proforma) |
Avg Rent (In-Place) |
Rent PSF (In-Place) |
| A1 - 1x1 | 64 | 552 | $965 | $1.75 | $966 | $1.75 |
| A2 - 1x1 | 74 | 683 | $1,074 | $1.57 | $1,057 | $1.55 |
| A3 - 1x1 | 71 | 789 | $1,145 | $1.45 | $1,147 | $1.45 |
| B1 - 2x2 | 55 | 917 | $1,331 | $1.45 | $1,241 | $1.35 |
| B2 - 2x2 | 48 | 1,020 | $1,454 | $1.43 | $1,451 | $1.42 |
| Totals / Averages | 312 | 773 | $1,172 | $1.51 | $1,152 | $1.49 |
Lease Comparables
| Campbell | Maxwell | Tides at Eastchase | Tides on Randol East | Tides on Randol West | Averages | Rocco Apartments (Post Reno) | |
| Distance from Subject Property | 2.6 Miles | 1.1 Miles | 0.3 Miles | 0.15 Miles | 0.3 Miles | 0.9 Miles | NA |
| Year Built | 1984 | 1984 | 1984 | 1984 | 1984 | 1984 | 1984 |
| Number of Units | 263 | 292 | 340 | 356 | 208 | 292 | 312 |
| 1 Bedroom | |||||||
| $ / Unit | $1,181 | $1,167 | $1,181 | $1,188 | $1,098 | $1,163 | $1,115 |
| Square Feet | 674 | 716 | 704 | 774 | 695 | 713 | 679 |
| $ / SF | $1.75 | $1.63 | $1.68 | $1.53 | $1.58 | $1.64 | $1.64 |
| 2 Bedrooms | |||||||
| $ / Unit | $1,515 | $1,534 | $1,407 | $1,514 | $1,461 | $1,486 | $1,474 |
| Square Feet | 987 | 1,019 | 965 | 1,126 | 1,044 | 1,028 | 965 |
| $ / SF | $1.53 | $1.50 | $1.46 | $1.34 | $1.40 | $1.45 | $1.53 |
Sales Comparables
| The Aria | Jaxon Apartments | The Madrid | The Preslee | 6 Eleven Lamar | Oakley | Blakely | Crossroads at Arlington | Cantebria Crossing | The Hub | Averages | Rocco Apartments | |||
| Sale Date | Dec-22 | Aug-22 | Jul-22 | May-22 | Mar-22 | Oct-21 | Nov-22 | Jul-21 | May-23 | Nov-22 | Sept-23 | |||
| Sales Price | $28,500,000 | $41,000,000 | $33,500,000 | $46,300,000 | $31,000,000 | $32,340,000 | $28,416,000 | $30,750,000 | $24,992,000 | $23,500,000 | $32,029,800 | $35,000,000 | ||
| Year Built | 1980 | 1985 | 1984 | 1981 | 1979 | 1980 | 1981 | 1986 | 1983 | 1980 | 1982 | 1984 | ||
| # of Units | 184 | 240 | 201 | 290 | 200 | 196 | 192 | 216 | 176 | 168 | 206 | 312 | ||
| Average Unit Size | 861 SF | 843 SF | 779 SF | 714 SF | 717 SF | 918 SF | 743 SF | 828 SF | 745 SF | 861 SF | 801 SF | 773 | ||
| Sales Price / Unit | $154,891 | $170,833 | $166,667 | $159,655 | $155,000 | $165,000 | $148,000 | $142,361 | $142,000 | $139,881 | $154,429 | $112,179 | ||
| Sales Price / SF | $180 | $203 | $214 | $224 | $216 | $180 | $199 | $172 | $190 | $162 | $194 | $145 | ||
| Occupancy at Sale | 92.90% | 87.50% | 95.00% | 94.40% | 95.00% | 90.00% | 94.70% | 97.20% | 97.10% | 91.70% | 93.55% | 70.00% | ||
| Distance from Subject Property | 3.7 Miles | 5.4 Miles | 3.8 Miles | 5.4 Miles | 2.9 Miles | 3.0 Miles | 3.8 Miles | 2.0 Miles | 5.3 Miles | 3.7 Miles | 3.9 mi | NA | ||
| Notes | Renovated | Renovated | Renovated | Renovated | Renovated | Renovated | Non/Partial Reno | Non/Partial Reno | Non/Partial Reno | Non/Partial Reno | ||||
Total Capitalization
| Sources of Funds | $ Amount | $ / Unit |
| Benefit Street - Senior Mortgage | $28,225,000 | $90,465 |
| Equity Contributed by Sponsor Principals/Officers/Immediate Family | $1,950,000 | $6,250 |
| LP Equity | $11,325,000 | $9,615 |
| Total Sources of Funds | $41,500,000 | $133,013 |
| Uses of Funds | $ Amount | $/Unit |
| Purchase Price | $35,000,000 | $112,179 |
| Capital Budget | $1,200,000 | $3,846 |
| Closing Costs | $1,010,925 | $3,240 |
| Interest Reserve | $500,000 | $1,603 |
| Working Capital | $791,000 | $2,535 |
| Debt Fees and Closing Costs | $998,075 | $3,199 |
| Rate Cap Premium | $2,000,000 | $6,410 |
| Total Uses of Funds | $41,500,000 | $133,013 |
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
The expected terms of the debt financing are as follows:
- Lender: Benefit Street Partners
- Loan Type: Bridge Loan
- Term: 36 Months & Two 1-year extension options
- Interest Rate Cap Detail: 2.00% cap for 3 year term; $2,000,000 premium paid at closing
- Loan-to-Value (LTV): 77.2%
- Loan-to-Cost (LTC): 68.0%
- Estimated Proceeds (Initial and Future Funding): $28,225,000 ($27,025,000 upfront and $1,200,000 future funding)
- Interest Type: Floating
- Spread about SOFR: 4.25%
- Interest-Only Period: 36 Months
- Amortization: 30 Years
- Prepayment Terms: Open to prepayment at anytime. 15 months minimus interest
- Extension Requirements: A minimum 8.0% debt yield for the first extension;
A minimum 8.5% debt yield for the second extension;
A maximum LTV of 70.0% based on a current Property appraisal;
0.25% extension fee paid for each extension;
No continuing Event of Default;
Borrower’s purchase of interest rate protection acceptable to and assigned to Lender at the time of the Loan extension - Recourse Description: Completion guarantee
(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.
Sentinel Peak Capital Partners intends to make distributions from SPCP31 RM Reese LP as follows:
- Pari passu all cash flow available for distribution to the Equity Investors(1) until a 10% Preferred Return, compounded monthly;
- Pari passu all cash flow available for distribution to the Equity Investors until the return of Equity Investors' capital contributions;
- 70% / 30% Equity Investors/Carried Interest split until 14% IRR;
- 60% / 40% Equity Investors/Carried Interest split thereafter.
(1) Equity Investors to mean all Limited Partners including principals/officers of the Sponsor and its affiliates
Sentinel Peak Capital Partners 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 August 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Sentinel Peak Capital Partners, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Sentinel Peak Capital Partners will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Effective Gross Revenue | $3,958,114 | $4,813,241 | $2,550,266 | |
| Total Operating Expenses | $2,335,595 | $2,435,622 | $1,252,824 | |
| Net Operating Income | $1,622,518 | $2,435,622 | $1,297,442 | |
| Project-Level Cash Flows | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($13,275,000) | $380,000 | $560,000 | $24,433,529 |
| Investor-Level Cash Flows(1) | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($3,045,000) | $85,876 | $111,554 | $4,788,309 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(1) | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($50,000) | $1,410 | $1,832 | $78,626 |
(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 Sentinel Peak Capital Partners' 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 | 2.0% of Purchase Price | Sentinel Peak Capital Partners | Capitalization |
| 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 | Greater of 1.0% of EGI or $1,000 Monthly | Sentinel Peak Capital Partners | Cash Flow |
| Property Management Fee | 2.5% of Effective Gross Income | SPCP/Summit Property Management | Cash Flow |
| Construction Management Fee | 6.0% of Hard Costs | SPCP/Summit Property Management | Construction Expenditure Budget |
| 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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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.