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Confidentiality Agreement
To access the Sponsor’s private offering documents for this investment, you must first acknowledge and agree to the below.
By clicking the ‘I Agree’ button below:
Open for pledging
Target IRR  15.7%-17.7% *
16.7%
Target Avg. Cash on Cash* 8.8%
Target Equity Multiple* 1.91X
Estimated Hold Period* 5 Years
...
View our Risk and Quality Controls.
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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PROJECT WEBINAR
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At Colonie Center
Offered By
Heidenberg Properties Group
Investment Strategy Core Plus
Investment Type Equity
Estimated First Distribution 8/2024
Minimum Investment 35000
Overview
At Colonie Center (the "Property") is a 243,389 square foot retail center anchored by Whole Foods, Floor & Décor and TJX's Sierra Trading Post with triple net leases extending over ten years. These anchors, in addition to the Bank of America outlot (15-year lease), comprise 64% of the in-place Base Rent. This high visibility center occupies the most desirable retail location in New York's Capital Region. While in-place anchors provide for downside protection, significant leasing opportunities provide for upside potential. Experienced Sponsors will be co-investing approximately 29% of the total deal equity.
Tenancy

At Colonie Center is anchored by a 33,783 square foot Whole Foods (with an additional 9,343 square feet of loading/storage space), one of the industry's most sought-after grocery operators. This is the only location in the Albany MSA and ranks in the top 12% (54/443) of Whole Foods locations nationwide in terms of visitation. Along with Floor & Décor, TJX's Sierra Trading Post, and the Bank of America outlot, $1.6 million of the nearly $2.5 million (64%) in-place Base Rent is attributed to good quality credit tenants. These key tenants feature leases extending 10+ years, ensuring durable cash flows to investors. The long lease terms and stable cash flows provide significant downside protection.

Co-Invested

Heidenberg Properties has a strong commitment and conviction to At Colonie Center, which is evidenced by their 29% (approximately $3.4 million) equity co-investment. With approximately four decades of expertise as developers, owners, and operators of open-air shopping centers and retail properties, the Sponsor has demonstrated a proven track record. They have successfully re-tenanted four former Sears/Kmart anchored locations in Michigan, Pennsylvania (2), and New York.

Location

Just off the I-87 access ramps, the Center is located at the convergence of Albany's key retail corridors, Wolf Road and Central Avenue. With I-87's daily traffic count exceeding 118,000 vehicles and the intersection of Wolf Road and Central Avenue seeing over 63,000 vehicles daily, the Center is strategically positioned for high visibility and to attract premier tenants. The Center is a retail destination for the ~800,000 individuals within the 30-mile trade area and is visited by over 6 million shoppers per year. The area's affluence is underscored by an average household income surpassing $110,000 within a 3, 5, and 10-mile radius.

 

(Data Source: CoStar and Sites USA)

Property at a glance
Year Built / Renovated 1966 / 2015-2024
Net Rentable SF 243,389
Parking Spaces 1,542 (6.3 spaces / 1,000 SF)
Exit Cap Rate 7.45%
Anchor Tenant Whole Foods
Acquisition Price $28,000,000
Investment Highlights
Durable In-Place Income: Purchasing a dominant, grocery-anchored center (Whole Foods), with co-tenants Sierra Trading (a TJX division) and Floor & Decor all under long-term leases (through at least 2034) at a 7.45% cap rate (with Year 1 cash flows north of 7%) providing resilient "downside protection." All existing tenants have NNN leases in place.
Location, Location, Location: Attracting the in-place roster of tenants is a direct result of the Center's unrivaled location at the intersection of the trade area's two major retail corridors -- Wolf Road and Central Avenue just off Interstate 87 access ramps.
Upside Potential: In addition to the stable in-place cash flows, there is upside potential through the lease-up of 94,000 square feet of upper-floor space. The Sponsor is currently in discussions with multiple entertainment and experiential uses and is negotiating a Letter of Intent for over 50% of this space. The successful lease-up of the upper-floor space is included in the current projections. In addition, there are also other opportunities to add value, such as developing additional outlots and leasing 20,000 square feet of lower-level space. These opportunities are not included in the current projections.
Experienced Sponsor: With nearly 40 years of retail investment and development experience, the Sponsor brings a wealth of expertise to the table. They have successfully re-developed four former Sears/Kmart anchored centers in New York, Pennsylvania (2), and Michigan. Notably, the Sponsor has exited three of these projects, demonstrating a track record of strategic decision-making and operational proficiency.
Cap Rate Arbitrage: Sale of Bank of America outlot as a sought-after NNN single-tenant investment grade asset projected in year 2 at a 5.5% exit cap rate (vs. 7.45% going-in cap rate) generates additional proceeds to partially pay down debt, develop the upper level and/or return capital to investors. In the base case underwriting, these proceeds are used to partially pay down debt and return capital to investors.
Compelling Risk-Adjusted Return: Assuming a five-year exit and execution of the business plan, the Sponsor is projecting an IRR of 16.7% without any cap rate compression (still 7.45%) net to the LP investors. However, should the Sponsor not succeed in its value-add leasing initiatives on the Upper Level and instead lease the Upper Level for $0/SF net (only recovering expenses), investors can expect a project-level IRR of 12%.
Cost-Effective Debt Financing: The Sponsor is utilizing debt financing from a lender with whom it has done three prior loans, including a development project. The existing structure will provide 62.5% of the purchase price, two years of interest only as well as "good news" capital to develop any vacancies subject to satisfaction of certain lender requirements.
Management
Cumulative Distributions

Heidenberg Properties Group

Heidenberg Properties and its predecessor has been a developer, owner, and operator of open-air shopping centers and retail properties for approximately 40 years. The Sponsor's current portfolio consists of nearly 2.5 million square feet of retail in the NE and Mid-Atlantic, including New York, New Jersey, Pennsylvania, Vermont, Virginia, and West Virginia, historically focusing on grocery-anchored, value-added centers. Currently, the Sponsor's portfolio is in excess of 98% occupied and continues to see positive leasing velocity and incremental development opportunities. Whether Heidenberg Properties is faced with repositioning, leasing, financing, or development challenges, the Sponsor acts quickly and efficiently to produce successful solutions and compelling results.

https://www.heidenbergproperties.com/
  • Robert Heidenberg
    CEO
  • Jason Lazar
    COO
Robert Heidenberg
CEO

Mr. Heidenberg is the founder and Managing Partner of Heidenberg Properties Group, the owner, developer and manager of shopping centers and retail properties. He provides the strategic vision for the group’s development, redevelopment and acquisition initiatives. Mr. Heidenberg co-founded a predecessor company in 1985 and led the company in acquiring and developing more than 4,000,000 square feet of shopping centers throughout New York, New Jersey, Pennsylvania, Arizona, Vermont, and Michigan. In 2013, Mr. Heidenberg founded Heidenberg Properties Group. Since its formation, Heidenberg Properties has acquired additional shopping centers in New York, Pennsylvania, Virginia, and West Virginia. Mr. Heidenberg is a graduate of Benjamin N. Cardozo School of Law and University of Pennsylvania.

Jason Lazar
COO

Jason Lazar is the Chief Operating Officer of Heidenberg Properties, a full-service real estate development company focused on the acquisition and development of open-air shopping centers in the Eastern United States. Jason joined Heidenberg Properties Group in January 2012. During that time, Heidenberg Properties has nearly tripled the size of its portfolio to contain approximately three million square feet of properties and expanded its geographic footprint from Vermont to Virginia. In his capacity as COO, Jason ensures that the current portfolio achieves its financial, operational, and strategic initiatives. He is responsible for sourcing and performing due diligence for all acquisition opportunities as well as structuring and negotiating all transactions, including financings, acquisitions, and divestitures. From February 2022 to February 2023, Jason led the successful exits of approximately $110 million of retail properties. Mr. Lazar holds a JD from the Benjamin N. Cardozo School of Law and a Bachelor of Arts degree from Lehigh University. He currently serves on the International Council of Shopping Centers’ (ICSC) Government Relations committee.

Track Record

Property Name(4) City, State Asset Type Status Acq Date SF Purchase Price Sales Price or Estimated Value IRR EMx
3500 Aramingo Avenue  Philadelphia, PA Retail SOLD 02-10-2010 64,163 $6,200,000 $12,650,000 15.38% 3.09X
CSP Albany Albany, NY Retail SOLD 10-28-2011 N/A $1,247,000 $2,351,000 32.44% 1.69X
Tops Plaza(1) Greenville, NY Retail SOLD 10-2014 92,888 N/A $5,572,625 N/A N/A
Hauppauge Plaza(2) Hauppauge, NY Retail SOLD 06-01-2015 34,919 N/A $11,000,000 11.74% 2.21X
Hazlet Hazlet, NJ Retail SOLD 11-20-2013 14,400 $2,800,000 $4,482,000 23.75% 2.05X
Rite Aid Portfolio Philadelphia, PA and Scranton, PA Retail SOLD 01-24-2014 47,633 $10,575,000 $14,000,000 15.59% 2.02X
Shelby Town Center(3) Shelby Township, MI Retail SOLD 03-01-2000 160,255 $10,250,000 $15,750,000 19.98% 3.49X
Mt Pocono Plaza Mt. Pocono, PA Retail SOLD 02-01-2013 195,735 $11,000,000 $17,000,000 12.51% 2.37X
Hershey Square Shopping Center Hummelstown, PA Retail SOLD 10-01-2014 229,724 $28,000,000 $48,872,857 12.12% 2.22X
Central Vermont Marketplace Berlin, VT Retail OWNED 08-01-2010 250,097 $13,660,000 $16,121,394 N/A N/A
Kohl's at Colonie Colonie, NY Retail OWNED N/A 146,573 N/A $8,059,733 N/A N/A
Culpeper Colonnade Culpeper, VA Retail OWNED 01-18-2018 180,683 $32,650,000 $35,627,084 N/A N/A
Heidenberg Plaza Closter, NJ Retail OWNED 01-2015 32,963 N/A N/A N/A N/A
HP Auction N/A Retail OWNED N/A N/A N/A $12,790,400 N/A N/A
Kohl's Staten Island Staten Island, NY Retail OWNED N/A 246,863 N/A $6,502,304 N/A N/A
Lake Plaza Shopping Center Mahopac, NY Retail OWNED 06-01-2008 166,186 N/A $26,955,738 N/A N/A
Plaza 48 Long Island City, NY Retail OWNED N/A 129,349 N/A $80,343,317 N/A N/A
Rocky Point Brookhaven, NY Retail OWNED 08-2000 N/A N/A $4,000,000 N/A N/A
Southport Shopping Center Shirley, NY Retail OWNED 01-16-2014 303,360 $38,400,000 $81,973,867 N/A N/A
Ephrata Commons Ephrata, PA Retail OWNED 11-01-2016 54,810 $6,100,000 $5,962,907 N/A N/A
Thompson Square Shopping Center Monticello, NY Retail OWNED 02-01-2017 123,219 $19,100,000 $22,516,317 N/A N/A
Potomac Marketplace Ranson, WV Retail OWNED 06-17-2017 379,196 $35,900,000 $46,029,013 N/A N/A
Totals/Weighted Avg.         2,853,016 $157,622,000 $478,560,556    

(1) Sale of the property reflected the exit of a 24% interest purchased as part of a portfolio. The total acquisition investment approx $400,000 and only principal was returned on the eventual sale.

(2) Sale metrics reflect the acquisition and exit pertaining to a 52% of after-acquired interest with outside capital, not the original acquisition of the property which occurred in 1997.

(3) Sale metrics reflect the acquistion and exit pertaining to a 30% of after-acquired interest as part of a portfolio with outside capital, not the original acquisition of the property which occurred in 2000.

(4) Sponsor began accepting outside capital in 2010. All dispositions shown were consummated after that time period. Dispositions prior to 2010 included only GP capital and involved either the sale of the property or the sale of a partial interest. In the Sponsor’s entire history, there was one loan default/property surrendered which occurred in 1995. Owned properties include all properties currently owned, irrespective of whether outside capital is a part of the capital stack.

The above bios and track record were provided by Heidenberg Properties Group and have not been independently verified by RealtyMogul.

The Sponsor plans to close on At Colonie Center the first week of April and intends to implement the following business plan:

  • Manage cash flow from a strong roster of long-term tenants
  • Lease the vacant 94,000 SF of Upper Level space to several larger tenants
  • Lease the vacant 6,106 SF Lower Level vacancy and 2,113 SF Outlot vacancy with complimentary tenants
  • Sell the Bank of America Outlot ground lease at the end of Year 2

To finance the acquisition, the Sponsor has secured a term sheet from Provident Bank with whom they have closed three prior transactions. The Sponsor sourced acquisition financing of $17.5 million with a fixed interest rate of the 5-year treasury rate plus 215 basis points, with a minimum floor of 6.5%(1). The loan term is 5 years with a 2-year interest-only period, followed by a 25-year amortization schedule.

The Sponsor is targeting a sale of the BoA ground lease at the end of Year 2 at a 5.5% cap rate for $3.6 million. The remainder of the asset will be sold at the end of Year 5, at which point the Center is projected to be sold at a 7.45% cap rate for $44.4 million ($186 PSF).

Note, the Sponsor has already been in discussions with several experiential tenants such as fitness centers, trampoline parks, and children's entertainment centers for the Upper Level vacancy. The Sponsor estimates approximately $6.5M of additional leasing and development costs for the Upper Level, which is to be advanced as additional "good news" capital from their lender. 

The projected return profile is 16.7% IRR, 8.8% average CoC, and 1.91x EM over a 5-year hold.

 

(1) A fixed interest rate which shall be set three (3) days prior to closing equal to 215 basis points in excess of the weekly average yield on U.S. Treasury Securities adjusted to a constant maturity of five (5) years with an interest rate floor of 6.50%. All interest and fees shall be computed on the basis of a 360-day year, actual number of days elapsed.

Summary
Property Information

At Colonie Center (the "Property"), a 243,389 square foot retail center, is anchored by Whole Foods, Floor & Décor, and TJX's Sierra Trading Post, all with leases extending over ten years. The Property enjoys immediate access to I-87 and I-90 and is adjacent to the larger Colonie Center, a dominant 1.1 million square foot regional mall anchored by Macy’s, Boscov’s, H&M, Nordstrom Rack, Barnes & Noble, and Regal Cinemas. With over 80 stores and restaurants, including PF Chang’s and Cheesecake Factory, the mall provides additional amenities. The long-term leases and high-quality credit tenants contribute to a secure cash flow from NNN leases. The existing vacancy in the 94,058 Upper Level and multi-tenant outlot simultaneously presents an opportunity to create significant value through leasing and development.

Unit Mix

Tenant SF % of Property Lease Start Lease End Rent PSF Lease Type
FLOOR & DÉCOR 57,204 24.7% 10-2023 09-2038 $9.00 NNN
WHOLE FOODS 33,783 14.6% 06-2014 06-2034 $17.33 NNN
SIERRA TRADING 19,100 8.3% 06-2024 05-2034 $15.00 NNN
VACANT (1130 LOWER) 6,106 2.6% - - $0.00 Not Applicable
ETHAN ALLEN 8,000 3.5% 06-2019 06-2029 $33.60 NNN
BJ'S RESTAURANT 7,807 3.4% 06-2018 06-2028 $44.00 NNN
CYCLE GEAR 6,530 2.8% 11-2021 11-2031 $25.00 NNN
SLEEP NUMBER 3,475 1.5% 05-2022 05-2032 $38.00 NNN
VACANT (2130 OUTLOT) 2,113 0.9% - - $0.00 Not Applicable
BANK OF AMERICA 5,213 2.3% 02-2025 01-2040 $38.37 NNN
VACANT (UPPER LEVEL) 94,058 35.4% - - $0.00 Not Applicable
Totals / Averages 243,389 100%     $10.25  
Comparables

Sales Comparables

  69 & 79 Wolf Road The Source at White Plains Cortlandt Crossing New City Center The Shoppes at South Hills Averages At Colonie Center
Sale Date 02-28-2023 02-01-2023 02-01-2022 10-01-2022 08-02-2022 09-25-2022 04-03-2024
Sales Price $5,039,500 $112,000,000 $65,500,000 $30,000,000 $46,800,000 $51,867,900 $28,000,000
Year Built / Renovated 1975 / 2000 1995 / 2003 2019 1970 1979 1989 1966 / 2015-2024
Net Rentable SF 25,619 260,000 130,000 125,110 518,000 211,746 243,389
Sales Price / SF $197 $431 $504 $240 $90 $292 $115
Cap Rate 5.50% 7.30% 5.10% 6.40% 7.50% 6.36% 7.45%
Address 69 & 79 Wolf Rd, Albany, NY 12205 100 Bloomingdale Rd, White Plains, NY 10605 3144 E Main St, Mohegan Lake, NY 10547 2-88 N Main St, New City, NY 10956 1865 South Rd, Poughkeepsie, NY 12601   1425 Central Ave, Albany, NY 12205

 

Lease Comparables(1)

Inline Retail Locations Staples
(Northway Commons)
Eddie Bauer
(Northway Commons)
Dressbarn
(Northway Commons)
Regal Cinemas
(Clifton Park Mall)
Sky Zone
(Clifton Park Mall)
Five Below
(New Loudon Center)
Averages At Colonie Center
Distance from Subject Property 0.2 miles 0.4 miles 0.4 miles 10.5 miles 10.5 miles 4.5 miles 4.4 miles  
Year Built / Renovated 2005 1970 / 1994 1970 / 1994 1976 / 2006 1976 / 2006 1966 / 2003 2005 1966 / 2015-2024
Building NRSF 477,644 477,644 477,644 465,124 465,124 254,786 436,328 231,331
Rental Rate ( Per SF ) $16.50 $31.00 $23.50 $17.00 $14.00 $20.50 $20.42  
Tenant Lease Size ( SF ) 22,597 7,000 9,000 50,000 27,000 9,000 20,766  

 

Out-Parcel Retail Locations Mission BBQ
(Northway Commons)
Mattress Firm
(Northway Commons)
Club Pilates
(Residence 15 at Village Plaza)
Averages At Colonie Center
Distance from Subject Property 0.4 miles 0.2 miles 10.5 miles 3.7 miles  
Year Built / Renovated 1970 / 1994 1966 2018 1992 1966 / 2015-2024
Building NRSF 477,644 477,644 N/A 477,644 231,331
Rental Rate ( Per SF ) $40.00 $42.00 $46.00 $42.67  
Tenant Lease Size ( SF ) 4,142 12,000 N/A 8,071  

(1) For current leases at At Colonie Center, please reference Unit Mix.

Location Information

Market Overview

Attracting a roster of best-in-class tenants is the direct result of the Center's unrivaled location of the confluence of Colonie's two major retail corridors, Wolf Road and Central Avenue, just off the I-87 access ramps. I-87 has a daily traffic count of over 118,000 vehicles per day while over 63,000 vehicles per day pass through the intersection of Wolf Road and Central Avenue. Tenants congregating at this intersection include other prominent retailers such as Target, Lowe's, BJ's Marshalls, Trader Joe's, and Petco. Situated at the retail heart of the Albany-Troy-Schenectady MSA, with a population of nearly 1.1 million and boasting the state's most affluent area outside of New York City, the Center is visited by over 6 million shoppers annually while the Colonie Whole Foods ranks in the chains top 12% of stores (#54/443) in terms of visits according to Placer.ai.

Submarket Overview

The high ratio of household incomes to relatively low home values creates a customer base with substantial discretionary income—a crucial factor for successful retail sales. The average household income exceeds $110k in all 3, 5, and 10-mile radius. There are 24 hotels within a two-mile radius of Wolf Road, totaling 2,968 rooms, all approaching maximum occupancy rates every weekday. There is also a residential apartment building, The Towers of Colonie, within walking distance of Colonie Center. In addition, there are 22 colleges and Universities within 50 miles, with an economic impact of over $200 million. Notably, Albany's "Tech Valley" region encompasses 21,000 businesses, schools, and organizations that employ more than 531,000 workers. A total retail expenditure of $2.3 billion is observed within a 5-mile radius. Monthly, there are 512,459 shoppers, averaging over 128,000 shoppers per week. The trade population within a 30-mile radius amounts to 803,208 individuals.

Source: CoStar and Sites USA

Cap Stack
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $ / SF
Senior Loan $17,500,000 $76
GP Equity(1) $3,392,269 $15
LP Equity $8,406,928 $36
Total Sources of Funds $29,299,197 $127
     
Uses of Funds $ Amount $ / SF
Purchase Price $28,000,000 $121
Acquisition Fee $280,000 $1
Closing Costs $1,019,197 $4
Total Uses of Funds $29,299,197 $127

(1) The Sponsor contributes 25% or $2.95M to the total deal equity of $11.8M. Additionally, they contribute 5%, which equals $442k, of common equity in the issuing entity, RH at Colonie, LLC. In total, the Sponsor contributes 28.8% or $3.39M of the total deal equity, which equals $11.8M. 

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Provident Bank
  • Loan Type: Permanent Loan
  • Term: 60 Months
  • Loan-to-Value (LTV): 62.50%
  • Loan-to-Cost (LTC): 60.00%
  • Estimated Proceeds: $17,500,000
  • Interest Type: Fixed
  • Annual Interest Rate: Fixed Rate set three (3) days prior to closing equal to greater of 5-year Treasury Rate + 2.15% and 6.50%(2)
  • Interest-Only Period: 24 Months
  • Amortization: 25 Years
  • Prepayment Terms: The Lender shall be entitled to charge and collect a prepayment premium based on the amount prepaid as outlined: 4% in Year 1, 3% in Year 2, 2% in Year 3, and 1% in Years 4-5 with no penalty during the final six months of Year 5.
  • Extension Requirements: No extension

(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 Sponsor's use of debt. 

(2) The proforma assumes a fixed interest rate of 6.50%.

(3) As of 2/14/2024, the U.S. 5-Year Treasury rate is 4.243%.

Distributions

The total equity amount of At Colonie Center is $11.8 million, which can be split as follows:

  1. GP Entities (Principals and Partners of Heidenberg Properties): 25% of the total equity ($2.95M)(1)
  2. RH at Colonie, LLC (Issuing Entity): 75% of the total equity ($8.85M)

Capital Structure at the issuing entity, RH at Colonie, LLC

  1. Heidenberg Properties Group (GP), contributes 5% of total capital ($442k) as common equity(1)
  2. LP Investors contribute 5% of total capital ($442k) as common equity(2)
  3. LP Investors contribute the remaining 90% of total capital ($7.96M) as preferred equity(2)

The PropCo, At Colonie Center 2024, LLC, is distributing 75% of the cash flows to the Issuing Entity, RH at Colonie, LLC, and 25% of the cash flows to the GP entities (1425 Colonie, LLC and SREP Colonie, LLC), which is pari passu.

Heidenberg Properties Group intends to make distributions from RH at Colonie, LLC as follows:

Distributions of Available Net Operating Income:

  1. Pari passu all cash flow available for distribution to each Preferred Equity Investor until such Preferred Equity Investor receives a Preferred Return of 7.5% Per Annum;
  2. Pari passu all cash flow available for distribution to each Preferred Equity Investor, the aggregate amount necessary to pay all accrued and unpaid Shortfalls due and owing to such Preferred Equity Investor in respect of any prior periods;
  3. 50% / 50% (50% to LP Equity Investors / 50% to GP Equity Investors) of all cash flow available for distribution thereafter.(3)

Distributions of Available Net Capital Proceeds:

  1. Pari passu all cash flow available for distribution to each Preferred Equity Investor until such Preferred Equity Investor receives a Preferred Return of 7.5% Per Annum;
  2. Pari passu all cash flow available for distribution to each Preferred Equity Investor, the aggregate amount necessary to pay all accrued and unpaid Shortfalls due and owing to such Preferred Equity Investor in respect of any prior periods;
  3. Pari passu all cash flow available for distribution to each Preferred Equity Investor, the aggregate amount of all capital contributed by such Preferred Equity Investor in respect of its Preferred Interest;
  4. 50% / 50% (50% to LP Equity Investors / 50% to GP Equity Investors) of all cash flow available for distribution thereafter.(3)

Heidenberg Properties Group 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 Heidenberg Properties Group, 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 Year 6 Year 7 Year 8 Year 9 Year 10
Effective Gross Revenue   $3,005,610 $4,355,311 $4,220,695 $4,265,643 $4,326,529 $4,455,494 $4,628,141 $4,659,567 $4,714,326 $4,781,357
Total Operating Expenses   $920,224 $998,212 $1,058,548 $1,087,037 $1,116,965 $1,150,441 $1,186,513 $1,217,812 $1,250,945 $1,285,498
Net Operating Income   $2,085,386 $3,357,099 $3,162,147 $3,178,606 $3,209,564 $3,305,053 $3,441,628 $3,441,755 $3,463,381 $3,495,859
                       
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5          
Net Cash Flow ($11,799,197) $833,843 $3,528,561 $1,232,551 $1,245,380 $23,164,540          
                       
Investor-Level Cash Flows(4)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5          
Net Cash Flow ($4,060,000) $290,883 $1,081,579 $297,280 $299,569 $5,775,323          
                       
Investor-Level Cash Flows - Hypothetical $50,000 Investment(4)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5          
Net Cash Flow ($50,000) $3,582 $13,320 $3,661 $3,689 $71,125          

 

(1) The Sponsor contributes 25% or $2.95M to the total deal equity of $11.8M. Additionally, they contribute 5%, which equals $442k, of common equity in the issuing entity, RH at Colonie, LLC. In total, the Sponsor contributes 28.8% or $3.39M of the total deal equity, which equals $11.8M. 

(2) LP Investor Capital is allocated 94.737% for Preferred Equity and 5.263% for Common Equity in the issuing entity RH at Colonie, LLC.

(3) The 50/50 split distribution at the issuing entity is a simple split.

(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.

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to Heidenberg Properties Group'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 1.00% of Purchase Price Sponsor/Sponsor Affiliate Capitalized Equity Contribution
Disposition Fee(3) 0.50% of Sale Price Sponsor/Sponsor Affiliate Cash Flow
Financing Fee(4) 0.50% of the aggregate principal amount of any loan or refinancing related to the Shopping Center, excluding the acquisition loan Sponsor/Sponsor Affiliate Loan Proceeds
Technology Solution Licensing Fee(2) Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution RM Technologies, LLC

Capitalization (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Property Management Fee 4.00% of Effective Gross Income Sponsor/Sponsor Affiliate Cash Flow
Leasing Consulting Fee for New Leases(5) 3.0% of fixed base rent for leases under 20,000 square feet (with no outside broker) or 2.0% with an outside broker, and $2.00 per square foot for leases of 20,000 square feet or more. Sponsor/Sponsor Affiliate "Good News" Capital
Hourly Oversight Fee(5) $200.00 for construction oversight or tenant plan reviews at the Shopping Center Sponsor/Sponsor Affiliate "Good News" Capital
Development Fee(5) 5.0% based on the approved construction budget for any Shopping Center Development Project Sponsor/Sponsor Affiliate "Good News" Capital
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.

(3) The disposition fee is a one-time fee. However, if the BoA ground lease is sold separately from the rest of the asset as contemplated in the base case underwriting, a disposition fee is charged on the Sale Price of both assets once they are sold.

(4) Additional financing or a refinancing has not been contemplated in the base case underwriting.

(5) Fees are payable in connection with leasing and developing vacant space at the Shopping Center.

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.  A portion of the offering proceeds may be allocated as a reserve to ensure timely payment of the ongoing licensing fees for RM Technologies’ Administration Solution. For the avoidance of doubt, the Administration Solution Fee is not due with respect to any quarter until the Administration Solution has been provided by RM Technologies and without regard to any amounts on reserve for the payment of such fees. 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.

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