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The purchase price value for South Hill of $11,700,000 represents a going-in 7.00% capitalization (“cap”) rate. Further, the going-in price/pound valuation is approximately $67,000/door and $92/SF for South Hill. Cooper Street Capital ("CSC") believes this valuation is in line with the valuations for this vintage asset class that the firm first saw when they began investing in the San Antonio market in 2019. Recent nearby sales have also traded for notably higher values, including The RiverBend Apartments, which although of a newer 1980s vintage, traded for $90k/door in April 2023.
The Brooks City Base area, where South Hill Apartments sits, is a unique, "up-and-coming", and fast-developing mixed-use pocket of south San Antonio that used to be a US Air Force Base until 2001. This southern pocket is now anchored by two large and long-term economic drivers, including the Mission Trails Baptist Hospital, with 110 beds, and the University of the Incarnate Word School of Osteopathic Medicine (UIWSOM). With these anchors, and its close proximity to downtown, the neighborhood has been the beneficiary of rapid development and revival in the last 15 years. Major national brands have opened new locations in Brooks City, including move-ins from Chick-fil-A, Krispy Kreme, Cheddar's Scratch Kitchen, Embassy Suites, Walmart Supercenter, Lowe's, and HEB (all within a mile of South Hill). Clustering nearby are also several large newly built apartment communities, including Landings at Brooks City-Base, The Kennedy Apartments, and the Anderson at Brooks.
Because of the favorable going-in basis and capitalization rate, the success of the South Hill acquisition will not depend on the implementation of a costly, systematic, and drawn-out value-add upgrade program, and CSC will finance the Project with a 7-year fixed rate note. As of September 2023, the asset is also currently occupied at 93%. Taken together, CSC expects South Hill to provide partners with cash flow not long after acquisition. To drive additional value, CSC will replace the asset’s roof and convert the master metered electric utility structure to sub-metering in order to pass the utility costs onto residents.
Cooper Street Capital
Cooper Street Capital (“CSC”) provides investment access to the commercial real estate space for retail, family office, and institutional investors. As a private equity real estate firm, CSC applies targeted acquisition strategies and active asset management to provide consistent risk-adjusted returns for investors in value-add and core-plus multifamily real estate opportunities. CSC aims to capture upside potential for its partners through both physical renovations and/or major operational improvements.
Since the firm's founding in 2011, CSC’s team has stayed committed to sourcing commercial real estate investment opportunities from across the United States that have demonstrated strong financial performance in the past or that exhibit the potential for gains in the future. In either case, potential acquisitions must be supported by strong market fundamentals.
CSC aims to minimize downside risk for its partners through “deal-by-deal” and targeted acquisitions. The firm seeks out existing multifamily real estate assets that can provide for continued cash flow and where value can be built upon through the process of driving up an asset’s yearly Net Operating Income (NOI). The firm is headquartered in Aspen, Colorado.
https://www.cooperstreetcapital.com/-
Brandon CooperManaging Partner -
Matt CooperDirector of Acquisitions -
Robert FayDirector of Investor Relations
Brandon has spearheaded the acquisition of over $1.5 billion worth of real estate assets in the last twelve years. Prior to founding Cooper Street Capital, Brandon was the co-founder of two other real estate investment firms, including Maroon Peak Partners and I-95 Ventures. Before breaking into the real estate sector, Brandon worked as a financial advisor at Merrill Lynch and previous to that as a policy analyst at The Center for Middle East Peace in Washington, D.C. He graduated Magna Cum Laude from Bates College where he led the Bobcat’s Division I cross country ski team.
Prior to joining Cooper Street Capital, Matt spent several years with the US Delegation to the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD) researching topics of international trade and the economics of corporate governance frameworks. Since joining, he has leveraged his analytical background to help CSC acquire over $1 billion of commercial real estate. He also holds a Bachelor of Arts in Political Science and French Language from the University of Virginia and a Masters of Science in International Political Economy from the London School of Economics.
Over the past seven years, Robert has capitalized, acquired, and repositioned over $1.25 billion worth of multifamily real estate raising and managing over $450 million in equity from family offices and high-net-worth individuals. Prior to Robert’s real estate ventures, he worked in equity research assisting in the valuation of publicly traded stocks with market caps between $30-$200 billion and for Bank of America Merrill Lynch. At Cooper Street Capital, Robert is in charge of all things Investor Relations where he works closely with the CEO and Director of Acquisition on capital events for the company and its investing partners. He graduated from the University of Colorado at Boulder with a dual degree in Economics and Psychology.
| Property Name | City, State | Asset Type | Status | Acq Date | Units | Purchase Price | Sales Price or Estimated Value | IRR | EMx |
| Highland Park | Albuquerque, NM | Multifamily | SOLD | 2/1/2013 | 80 | $5,125,000 | $6,400,000 | 18.40% | N/A |
| Maroon Peak Netherwood | Albuquerque, NM | Multifamily | SOLD | 8/1/2013 | 220 | $13,975,000 | $18,500,000 | 12.90% | N/A |
| Citadel Apartments | Albuquerque, NM | Multifamily | SOLD | 3/1/2014 | 233 | $9,719,000 | $14,792,000 | 33.40% | N/A |
| I-95 Portfolio | Portland, ME | Multifamily | SOLD | 7/1/2014 | 54 | $6,550,000 | $9,500,000 | 18.00% | N/A |
| Bowdoin Realty Portfolio | Portland, ME | Multifamily | SOLD | 12/1/2014 | 41 | $5,630,000 | $9,900,000 | 22.30% | N/A |
| 94-96 Winter | Portland, ME | Multifamily | SOLD | 2/1/2015 | 10 | $900,000 | $1,400,000 | 54.50% | N/A |
| Bricklight Capital Portfolio | Portland, ME | Multifamily | SOLD | 7/1/2015 | 45 | $4,900,000 | $7,100,000 | 20.50% | N/A |
| East End Apartments | Portland, ME | Multifamily | SOLD | 9/1/2015 | 37 | $4,300,000 | $5,800,000 | 24.10% | N/A |
| Bricklight II | Portland, ME | Multifamily | SOLD | 9/1/2015 | 24 | $2,730,000 | $3,250,000 | 25.20% | N/A |
| 773 Congress | Portland, ME | Multifamily | SOLD | 9/1/2015 | 5 | $390,000 | $420,000 | 29.60% | N/A |
| 59 Bramhall | Portland, ME | Multifamily | SOLD | 10/1/2015 | 9 | $625,000 | $750,000 | 48.00% | N/A |
| Bear Creek Apartments | Albuquerque, NM | Multifamily | SOLD | 6/1/2016 | 84 | $2,820,000 | $3,400,000 | 30.50% | N/A |
| Cedar 31 Apartments | Austin, TX | Multifamily | OWNED | 4/9/2017 | 14 | $2,310,000 | $3,100,000 | N/A | N/A |
| Bannister Apartments | Austin, TX | Multifamily | SOLD | 5/1/2017 | 34 | $2,485,000 | $3,300,000 | 18.30% | N/A |
| 1515 Clermont | Denver, CO | Multifamily | SOLD | 7/1/2017 | 36 | $5,500,000 | $7,150,000 | 14.00% | N/A |
| The Goose Nest Apartments | Portland, OR | Multifamily | SOLD | 8/1/2017 | 22 | $3,075,000 | $4,260,000 | 20.10% | N/A |
| Villas de la Luz | Austin, TX | Multifamily | SOLD | 1/1/2018 | 240 | $20,500,000 | $25,225,000 | 22.80% | N/A |
| Courtyard and Arbors Apartments | Albuquerque, NM | Multifamily | SOLD | 2/1/2018 | 529 | $31,100,000 | $38,000,000 | 18.30% | N/A |
| English Aire and Lafayette Landing | Austin, TX | Multifamily | SOLD | 8/1/2018 | 397 | $38,750,000 | $45,000,000 | 50.70% | N/A |
| Sage Canyon | Albuquerque, NM | Multifamily | SOLD | 8/24/2018 | 105 | $8,790,000 | $10,260,000 | 38.15% | 1.54x |
| CSC North Austin Portfolio | Austin, TX | Multifamily | SOLD | 1/1/2019 | 523 | $56,000,000 | $62,350,000 | 50.70% | N/A |
| Gallery Park and Westfal | Portland, OR | Multifamily | OWNED | 1/18/2019 | 93 | $18,200,000 | $2,600,000 | N/A | N/A |
| Mueller Rose | Austin, TX | Multifamily | SOLD | 3/15/2019 | 181 | $18,825,000 | $30,000,000 | 25.10% | 1.93x |
| CSC Spanish Trails | Austin, TX | Multifamily | SOLD | 3/1/2019 | 40 | $6,238,000 | $7,600,000 | 19.30% | N/A |
| 1919 Portsmouth, 1903 Portsmouth, 420 W. Alabama | Houston, TX | Multifamily | OWNED | 4/26/2019 | 75 | $13,000,000 | $14,000,000 | N/A | N/A |
| Rock Creek | Albuquerque, NM | Multifamily | SOLD | 6/28/2019 | 121 | $6,875,000 | $8,000,000 | 39.10% | 1.48x |
| Pyramid Portfolio | Albuquerque, NM | Multifamily | SOLD | 6/28/2019 | 34 | $1,905,000 | $2,300,000 | 25.20% | 1.25x |
| Bannister Place | Austin, TX | Multifamily | SOLD | 7/11/2019 | 20 | $3,300,000 | $4,000,000 | 13.21% | 1.40x |
| The French Quarter | Albuquerque, NM | Multifamily | SOLD | 7/2/2019 | 84 | $3,400,000 | $4,480,000 | 16.45% | 1.33x |
| Lexington Realty Capital | Albuquerque, NM | Multifamily | SOLD | 8/9/2019 | 156 | $7,400,000 | $11,750,000 | 142.16% | 2.43x |
| The Zeno Apartments | Portland, OR | Multifamily | OWNED | 8/27/2019 | 22 | $4,250,000 | $5,000,000 | N/A | N/A |
| Cascade Apartments | Austin, TX | Multifamily | SOLD | 9/19/2019 | 198 | $31,500,000 | $38,000,000 | 13.90% | 1.41x |
| Villas Esperanza | Albuquerque, NM | Multifamily | SOLD | 9/20/2019 | 188 | $12,250,000 | $19,000,000 | 35.60% | 2.28x |
| Miller Square | Austin, TX | Multifamily | SOLD | 9/1/2019 | 51 | $8,640,000 | $10,800,000 | 13.23% | 1.42x |
| Chestnut Park | San Antonio, TX | Multifamily | SOLD | 12/3/2019 | 145 | $12,000,000 | $18,500,000 | 30.20% | 1.89x |
| Arbors and Courtyards | Albuquerque, NM | Multifamily | SOLD | 12/23/2019 | 529 | $38,000,000 | $66,500,000 | 61.80% | 3.04x |
| Barberry Village | Portland, OR | Multifamily | SOLD | 1/10/2020 | 180 | $21,500,000 | $34,000,000 | 36.59% | 2.05x |
| Arcadian | Austin, TX | Multifamily | SOLD | 2/14/2020 | 83 | $11,350,000 | $13,400,000 | 29.27% | 1.80x |
| Amber Hill | San Antonio, TX | Multifamily | SOLD | 3/18/2020 | 244 | $16,750,000 | $20,700,000 | 52.90% | 1.57x |
| Blue Vine Apartments | San Antonio, TX | Multifamily | SOLD | 4/27/2020 | 111 | $10,050,000 | $14,500,000 | 17.54% | 1.39x |
| The Lexington Place | Albuquerque, NM | Multifamily | SOLD | 8/13/2020 | 156 | $11,750,000 | $15,752,000 | 35.57% | 1.68x |
| River Park Apartments | New Braunfels, TX | Multifamily | SOLD | 9/2/2020 | 100 | $7,800,000 | $11,195,000 | 64.80% | 1.67x |
| Luna Verde | El Paso, TX | Multifamily | OWNED | 9/9/2020 | 297 | $13,500,000 | $23,000,000 | N/A | N/A |
| Paso Oeste | El Paso, TX | Multifamily | SOLD | 9/9/2020 | 244 | $15,500,000 | $21,025,000 | 29.40% | N/A |
| Vista Grande | Albuquerque, NM | Multifamily | SOLD | 10/19/2020 | 168 | $11,000,000 | $19,200,000 | 130.08% | 3.80x |
| Mountaindale | El Paso, TX | Multifamily | SOLD | 10/1/2020 | 88 | $5,100,000 | $7,550,000 | 23.83% | 1.34x |
| Creeks Edge Apartments | Austin, TX | Multifamily | SOLD | 1/4/2021 | 200 | $23,000,000 | $33,250,000 | 21.97% | 1.32x |
| Netherwood Village | Albuquerque, NM | Multifamily | SOLD | 1/29/2021 | 220 | $18,500,000 | $31,500,000 | 366.94% | 4.59x |
| Amber Hill - 2 | San Antonio, TX | Multifamily | SOLD | 5/25/2021 | 244 | $27,000,000 | $27,000,000 | 69.30% | 1.73x |
| Raintree Village | El Paso, TX | Multifamily | SOLD | 4/15/2021 | 275 | $15,750,000 | $20,265,000 | 22.43% | 1.44x |
| Evergreen Apartments | Santa Fe, NM | Multifamily | OWNED | 5/3/2021 | 70 | $6,300,000 | $8,500,000 | N/A | N/A |
| Alexis Apartments | Las Cruces, NM | Multifamily | SOLD | 6/2/2021 | 170 | $13,235,000 | $25,000,000 | 299.90% | 4.25x |
| The Oasis, Speedway 38, Barton Ridge | Austin, TX | Multifamily | OWNED | 7/21/2021 | 121 | $21,650,000 | $21,650,000 | N/A | N/A |
| Velo Apartments | Spokane, WA | Multifamily | SOLD | 6/16/2021 | 58 | $7,900,000 | $8,400,000 | 30.16% | 1.44x |
| Orlo | Portland, OR | Multifamily | OWNED | 8/6/2021 | 38 | $5,000,000 | $5,000,000 | N/A | N/A |
| Regal Ridge | Spokane, WA | Multifamily | SOLD | 8/31/2021 | 97 | $18,250,000 | $21,500,000 | 8.30% | 1.16x |
| 1865 Union Street | San Francisco, CA | Multifamily | OWNED | 9/30/2021 | 5 | $4,100,000 | $4,100,000 | N/A | N/A |
| The Rosewood | Spokane, WA | Multifamily | OWNED | 12/15/2021 | 77 | $10,500,000 | $13,230,000 | N/A | N/A |
| Paso Norte, Santa Rosa, Rosetta | El Paso, TX | Multifamily | OWNED | 12/3/2021 | 288 | $19,475,000 | $24,000,000 | N/A | N/A |
| The Alexandra | Lexington, KY | Multifamily | OWNED | 2/15/2022 | 204 | $14,000,000 | $14,000,000 | N/A | N/A |
| The Lennox | Spokane, WA | Multifamily | OWNED | 3/7/2022 | 51 | $6,600,000 | $6,600,000 | N/A | N/A |
| Trinity Place/Casa Barranca | El Paso, TX | Multifamily | OWNED | 6/1/2022 | 429 | $32,400,000 | $32,400,000 | N/A | N/A |
| The Caterina/Paso Este | El Paso, TX | Multifamily | OWNED | 6/1/2022 | 131 | $8,825,000 | $8,825,000 | N/A | N/A |
| Arabella | San Antonio, TX | Multifamily | OWNED | 7/12/2022 | 144 | $12,700,000 | $12,700,000 | N/A | N/A |
| Crescent Ridge | Cincinnati, OH | Multifamily | OWNED | 8/1/2022 | 154 | $17,300,000 | $17,300,000 | N/A | N/A |
| White Willow | Portland, OR | Multifamily | OWNED | 9/21/2022 | 90 | $11,700,000 | $11,700,000 | N/A | N/A |
| Jackson / Morrison | Spokane, WA | Multifamily | OWNED | 10/14/2022 | 111 | $16,550,000 | $16,550,000 | N/A | N/A |
| Elm Creek | San Antonio, TX | Multifamily | OWNED | 12/13/2022 | 81 | $9,350,000 | $9,350,000 | N/A | N/A |
| Casa Loma | Santa Fe, NM | Multifamily | OWNED | 1/13/2023 | 132 | $26,500,000 | $26,500,000 | N/A | N/A |
| Dawn Run | Lexington, KY | Multifamily | OWNED | 4/27/2023 | 218 | $9,100,000 | $9,100,000 | N/A | N/A |
| The Izzy | Oklahoma City, OK | Multifamily | OWNED | 3/21/2023 | 328 | $32,250,000 | $32,250,000 | N/A | N/A |
| Villas on 50th | Oklahoma City, OK | Multifamily | OWNED | 5/8/2023 | 114 | $7,300,000 | $7,300,000 | N/A | N/A |
| South Hill Apartments | San Antonio, TX | Multifamily | OWNED | 10/12/2023 | 174 | $11,700,000 | $11,700,000 | N/A | N/A |
| Totals/Weighted Average | 10,574 | $943,192,000 | $1,162,379,000 |
The above bios and track record were provided by Cooper Street Capital and have not been independently verified by RealtyMogul.
Over a 2-3 year stretch, starting not long after the COVID-19 pandemic, the multifamily market saw valuations spike because of record low interest rates. Capital flows into the sector broke records, competition was fierce, and sellers could basically name their price. According to Real Capital Analytics, multifamily sales volume totaled $331 billion in 2021, an increase of more than $140 billion over the previous calendar year record established in 2019. Because the Federal Reserve (“The Fed”) has raised interest rates ten times since March 2022 to fight inflation, however, market dynamics have rapidly shifted. A sizable portion of investment equity has moved to the sidelines, anticipating an economic slowdown and real estate transactions have come nearly to a halt. According to Northmarq, sales velocity in the first quarter of 2023 in San Antonio, for example, was down roughly 30% from levels recorded at the end of last year. In addition, the median sales price through the first quarter this year was $97,700/unit — down 12% from the 2022 figure. Many would-be sellers have not adjusted asset prices in accordance with the new and higher cost of capital. Investors have rightly demanded that asset values reflect the higher borrowing costs and that equity invested in real estate provides adequate risk-adjusted returns compared to more liquid investments like bonds and other credit instruments. Cooper Street Capital ("CSC") believes the trajectory of South Hill’s sales process is a direct reflection of this changing environment and just how challenging it will be for asset values to re-adjust. Only after the asset went in and out of contract twice was the seller able to eventually find where the market actually was. Now CSC has the asset under contract for $11,700,000, or a 7.00% going-in cap rate, and the approximate $67k/door basis is in line with 2018/2019 values.
With the uncertainty in the market, and the strong going in metrics, CSC has decided against a more traditional value-add strategy to overhaul the asset’s exterior presentation and interior living quality to aggressively drive up the net operating income (“NOI”) with a large capital expenditure (“CapEx”) injection, as the firm most often does. Instead, the firm will focus a more targeted $1,347,000 CapEx budget on more large-scale projects that will ensure the asset’s long-term use. In addition, CSC will focus on driving up the asset's net operating income ("NOI") by shifting the asset from an all bills paid structure to one where residents are billed back for utility usage. To complete the transaction, CSC will utilize a Fannie Mae 7-year note with a fixed rate at 153 bps over the 7-year Treasury and 7 years of interest-only payments. By not focusing on a large-scale value-add project, CSC can use fixed-rate financing and remove interest rate risk over the course of the hold period.
CapEx Budget
| Exterior Renovations | Total Amount | Per Unit |
| Concrete / Asphalt | $38,500 | $221 |
| Amenities | $50,000 | $287 |
| Plumbing | $25,000 | $144 |
| Signage Package | $20,000 | $115 |
| Office | $20,000 | $115 |
| Mold Remediation | $36,000 | $207 |
| Green Initiatives | $162,000 | $931 |
| Sub-Meter | $150,000 | $862 |
| Roofs | $650,000 | $3,736 |
| Total Exterior Renovation Costs | $1,151,500 | $6,618 |
| Other Costs | Total Amount | Per Unit |
| Marketing | $15,000 | $86 |
| Construction Management (5%) | $60,000 | $345 |
| Reserve (10.4%) | $120,000 | $690 |
| Total Other Costs | $195,000 | $1,121 |
| Grand Total | $1,347,000 | $7,739 |
The South Hill Apartments is a 174-unit garden-style multifamily apartment community located in San Antonio's southern Brooks City Base neighborhood. The Sponsor believes that the Property boasts a desirable unit mix with an average unit size of 727 SF in addition to a noteworthy collection of amenities, including three pools, a tennis court, and ample covered parking. The Property is also strategically located just off of SE Military Drive, providing close-in access to the area's many retail and commercial destinations, while it sits within a short distance to US Highway 281, thereby providing excellent connectivity to the city's major employers.
Unit Mix
| Unit Type | Avg SF/Unit | Avg Rent | Rent PSF | Avg Rent (In-Place) | Rent PSF (In-Place) | Lease Type |
| Studio | 485 | $745 | $1.54 | $741 | $1.53 | NMI |
| 1 BD / 1 BA (Small) | 520 | $835 | $1.61 | $820 | $1.58 | NMI |
| 1 BD / 1 BA (Large) | 720 | $930 | $1.29 | $896 | $1.24 | NMI |
| 2 BD / 2 BA (Small) | 800 | $1,050 | $1.31 | $945 | $1.18 | NMI |
| 2 BD / 2 BA (Large) | 920 | $1,050 | $1.14 | $1,038 | $1.13 | NMI |
| 2 BD / 2 BA (XL) | 940 | $1,050 | $1.12 | $1,078 | $1.15 | NMI |
| 2 BD / 2.5 BA | 1,040 | $1,080 | $1.04 | $1,067 | $1.03 | NMI |
| 3 BD / 1.5 BA | 1,100 | $1,300 | $1.18 | $1,161 | $1.06 | NMI |
| Totals / Averages | 727 | $939 | $1.29 | $919 | $1.26 |
Sales Comparables
| Ivy Plains | Seven Pines | Amber Hill | The Establishment | Villa de Oro | Arcos | RiverBend | Willow Run | Averages | South Hill Apartments (Going-in) | |
| Sale Date | 05-15-2022 | 06-15-2022 | 06-15-2022 | 08-15-2022 | 09-15-2022 | 02-15-2022 | 04-15-2023 | 09-01-2022 | ||
| Sale Price | $15,500,000 | $9,500,000 | $27,100,000 | $13,642,000 | $17,000,000 | $13,400,000 | $18,000,000 | $12,700,000 | $15,855,250 | $11,700,000 |
| Year Built | 1974 | 1969 | 1969 | 1969 | 1987 | 1970 | 1984 | 1960 | 1972 | 1965 |
| # of Units | 135 | 87 | 244 | 144 | 150 | 117 | 200 | 154 | 154 | 174 |
| Average Unit Size | 735 SF | 695 SF | 788 SF | 744 SF | 603 SF | 771 SF | 730 SF | 867 SF | 742 SF | 727 SF |
| Sales Price / Unit | $114,815 | $109,195 | $111,066 | $94,736 | $113,333 | $114,530 | $90,000 | $82,468 | $103,768 | $67,241 |
| Sales Price / SF | $156 | $157 | $141 | $127 | $188 | $149 | $123 | $95 | $142 | $93 |
| Distance from Subject Property | 1.4 mi | 6.1 mi | 17.5 mi | 10.0 mi | 6.9 mi | 16.8 mi | 3.5 mi | 12.9 mi | 9.4 mi |
Lease Comparables
| Highland Hills | Brooksfield Apartments | Ivy Plains at Brooks | Salem Creek | RiverBend | The Aliso | Ridge at Southcross | Averages | South Hill Apartments | |
| Distance from Subject Property | 2.0 mi | 1.1 mi | 1.4 mi | 3.2 mi | 3.5 mi | 3.3 mi | 2.3 mi | 2.4 mi | |
| Year Built | 1956 | 1987 | 1978 | 1985 | 1984 | 1965 | 1974 | 1975 | 1965 |
| Number of Units | 176 | 156 | 135 | 75 | 200 | 176 | 210 | 161 | 174 |
| 1 Bedrooms | Averages | Market Rent (Target Rent) | |||||||
| $ / Unit | $820 | $999 | $1,149 | $1,041 | $811 | $999 | $795 | $945 | $835 |
| Square Feet | 529 SF | 500 SF | 667 SF | 560 SF | 516 SF | 640 SF | 618 SF | 576 SF | 520 SF |
| $ / SF | $1.55/SF | $2.00/SF | $1.72/SF | $1.86/SF | $1.57/SF | $1.56/SF | $1.29/SF | $1.65/SF | $1.61/SF |
| 1 Bedrooms | |||||||||
| $ / Unit | $840 | $1,098 | N/A | $1,066 | $765 | $945 | N/A | $943 | $930 |
| Square Feet | 546 SF | 675 SF | N/A | 678 SF | 678 SF | 740 SF | N/A | 663 SF | 720 SF |
| $ / SF | $1.54/SF | $1.63/SF | N/A | $1.57/SF | $1.13/SF | $1.28/SF | N/A | $1.43/SF | $1.29/SF |
| 2 Bedrooms | |||||||||
| $ / Unit | $965 | $1,170 | $1,371 | $1,354 | $869 | $1,213 | $965 | $1,130 | $1,050 |
| Square Feet | 682 SF | 790 SF | 971 SF | 844 SF | 837 SF | 840 SF | 861 SF | 832 SF | 920 SF |
| $ / SF | $1.41/SF | $1.48/SF | $1.41/SF | $1.60/SF | $1.04/SF | $1.44/SF | $1.12/SF | $1.36/SF | $1.14/SF |
| 2 Bedrooms | |||||||||
| $ / Unit | $913 | N/A | N/A | $1,386 | $924 | N/A | $1,292 | $1,129 | $1,080 |
| Square Feet | 694 SF | N/A | N/A | 901 SF | 910 SF | N/A | 1,132 SF | 909 SF | 1,040 SF |
| $ / SF | $1.32/SF | N/A | N/A | $1.54/SF | $1.02/SF | N/A | $1.14/SF | $1.25/SF | $1.04/SF |
Market Overview
CSC believes in the importance of stable and long-term economic drivers and engines when evaluating the merits of urban markets and multifamily projects, particularly in the face of potential economic headwinds in the year to come. For CSC, the big three long-term economic drivers of any US metro include “eds” (education institutions/universities), “feds” (federal spending), and “meds” (healthcare/medical institutions). San Antonio has it all, and these segments have been growing in the last few years. The largest and most well-known university in San Antonio is the University of Texas at San Antonio with 34,000 undergraduates, but the city also boasts campuses for Trinity College and San Antonio College. According to YardiMatrix, the education and health services sectors led job gains in 2022 in the city with 15,200 new jobs. The University of Texas at San Antonio recently opened its $92 mil new data science building, in the first phase of the school’s 10-year plan to revitalize its downtown campus. Not for nothing, San Antonio is also called "Military City" with four military bases, including Fort Sam Houston, Camp Bullis, Randolph Air Force Base, and Lackland Air Force Base, comprised of 70,000 members. The City of San Antonio also estimates that the United Services Automobile Association (USAA), the insurance and banking provider for military families, employs just over 19,000 employees. According to Fannie Mae, San Antonio has averaged more than 28,000 new residents per year for the last four years. Driven in part by the growth in those long-term driver market segments, the population is forecasted to grow this year at twice the speed of the national average, with the 20-to-34-year-old segment growing even faster.
Submarket Overview
The Brooks City neighborhood, previously known as the Brooks City Air Force Base, is rapidly becoming a cluster of new retail, restaurants, manufacturing, and new housing. This pocket of south San Antonio, where the South Hill sits, is a 1,308-acre mixed-use community approximately 7 miles south of the city's downtown. According to the Brooks Development Authority, since 2001, when the Air Force base was finally closed by the US Government, more than $1.2 billion has been invested into the area, which is rapidly changing the area landscape. As of 2022, according to Northmarq, the population at Brooks had increased by 14.4% to 43,236 since 2012 and 13,250 regional jobs had been created at the surrounding businesses. Several significant and recent corporate announcements are helping to expand the area beyond its historically renter-by-necessity demographic. OKIN BPS, a Prague-based business processes supplier, for example, set plans in 2018 to invest nearly $23 million in Brooks to build its headquarters. Cuisine Solutions at Brooks, in another example, cut the ribbon on a very large and new $200 million facility in 2021 with a goal of bringing 300 new employees to Brooks. As more companies continue to open up operations at Brooks, and the word gets out about some of the new restaurants and retail options, the submarket is expected to see an influx of renters coming from more traditional suburban locations like Northwest and Far West San Antonio. As a result, CSC believes South Hill is well situated for steady demand in the medium term.
Total Capitalization
| Sources of Funds | $ Amount | $/Unit |
| GP Equity(1) | $500,000 | $2,874 |
| LP Equity | $4,324,000 | $24,851 |
| Senior Loan | $8,925,000 | $51,293 |
| Total Sources of Funds | $13,749,000 | $79,017 |
| Uses of Funds | $ Amount | $/Unit |
| Purchase Price | $11,700,000 | $67,241 |
| Acquisition Fee (1%) | $117,000 | $672 |
| CapEx | $1,347,000 | $7,741 |
| Closing Costs(2) | $585,000 | $3,362 |
| Total Uses of Funds | $13,749,000 | $79,017 |
(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: Fannie Mae
- Loan Type: Permanent Loan
- Term: 84 Months
- Loan-to-Value (LTV): 76.3%
- Loan-to-Cost (LTC): 64.9%
- Estimated Proceeds: $8,925,000
- Interest Type: Fixed
- Annual Interest Rate: 153 bps over 7-year Treasury (Indicative Rate, Fixed Rate to be set prior to Closing)
- Interest-Only Period: 84 Months
- Prepayment Terms: Yield Maintenance
- Extension Requirements: N/A
- 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.
Cooper Street Capital intends to make distributions from CSC South Hill Realty Capital, LLC as follows:
- Pari passu all cash flow available for distribution to the Equity Investors(1) until the Equity Investors receive a Preferred Return of 10.0% IRR;
- 70% / 30% (70% to LP Equity Investors(2) / 30% to GP Equity Investors(3)) of all cash flow available for distribution thereafter.
Cooper Street Capital 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 July 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Cooper Street Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Cooper Street Capital will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | ||||
| Year 1 | Year 2 | Year 3 | ||
| Effective Gross Revenue | $2,032,400 | $2,186,644 | $2,252,810 | |
| Total Operating Expenses | ($1,219,875) | ($1,282,768) | ($1,296,896) | |
| Net Operating Income | $812,525 | $903,876 | $955,914 | |
| Project-Level Cash Flows | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($4,824,000) | $306,796 | $398,148 | $7,662,748 |
| Investor-Level Cash Flows(4) | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($2,000,000) | $127,196 | $155,070 | $2,896,169 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(4) | ||||
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Net Cash Flow | ($50,000) | $3,180 | $3,877 | $72,404 |
(1) Equity Investors include all members part of the Limited Partnership and General Partnership, including Cooper Street Capital.
(2) LP Equity Investors include members part of the Limited Partnership.
(3) GP Equity Investors include members part of the General Partnership, including Cooper Street Capital.
(4) 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 Cooper Street Capital'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 | 1.0% of Purchase Price | Sponsor Affiliate | Capitalized Equity Contribution |
| Mortgage Brokerage Fee | 1.0% of Loan Proceeds | Sponsor Affiliate | Capitalized Equity Contribution |
| Financing Fee | 1.0% of Loan Fees | Sponsor/Sponsor Affiliate | Capitalized Equity Contribution |
| Technology Solution Licensing Fee(xx) | 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 | 2.5% of Gross Rental Income | Sponsor/Sponsor Affiliate | Cash Flow |
| Asset Management Fee | 0.5% of Gross Rental Income | Sponsor/Sponsor Affiliate | Cash Flow |
| Construction Management Fee | 5.0% of Total Costs Before Contingency | CSC Management, LLC | Construction Expenditure Budget |
| Administration Solution Licensing Fee | 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.
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLCSponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment DocumentsThe information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of InvestmentThis investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor AssumptionsSponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past PerformanceAny description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of DebtA substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not RegisteredSponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment AdviceNothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
1031 Exchange RiskInternal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.