AION Partners acts as Operating Partner on core-plus, value-add, and opportunistic real estate investments across the U.S. AION operates a $1.5 billion portfolio of office, retail, and multifamily assets located primarily in the New York – Washington D.C. corridor and across the Sunbelt. They target well-located office and retail properties in major gateway markets, and multifamily in the suburban infill locations surrounding them. AION has participated in institutional equity partnerships with Kushner Companies, NorthStar Realty Finance, Related, The Carlyle Group, Lehman Brothers, C-III Capital Partners, China Orient Asset Management, and Clarion Partners. The firm has operated continuously since 2001, investing actively during the downturn caused by the 2007-09 financial crisis.
AION’s multifamily investment arm focuses on workforce housing opportunities in close proximity to employment centers and demand drivers. They typically pursue investments in markets with high populations and job growth, often targeting assets that are non-institutionally managed or neglected by current management. AION currently owns 9,941 multifamily units with a total capitalization of more than $981MM.
AION operates an in-house construction management team that efficiently identifies, bids, and oversees robust capital improvement projects. In addition, they have a centralized accounting team that includes two CPAs with experience in fund management accounting, investor reporting, and audits.http://www.aionpartners.com/
Michael Betancourt is a founding partner and Managing Director of AION Partners. Michael heads the Investment Committee of AION and oversees underwriting of all new transactions. He also dedicates his time to AION’s institutional equity relationships and private investors. At AION, he has purchased over $1.5 billion in real estate across multifamily, office, retail, and development deals. Michael began his real estate career with DCD America in 2001. He has also held positions with Prudential Securities and Shearson Lehman Brothers. Mr. Betancourt is a graduate of Saint Joseph's University with a Bachelor of Science in Finance.
Siraj Dadabhoy has over 20 years of experience in finance and real estate investment. He focuses on AION’s overall investment strategy; new real estate opportunities, global marketing, and capital raising. He has a thorough knowledge of the entire investment lifecycle and maintains a high level of attention to detail throughout the process, from the initial structuring of the deal through the development of the investment thesis and design details. He is also the Chairman of AION Global; an owner, operator and developer of real estate in the U.K. Siraj is a 1988 graduate of Indiana University, with a Bachelor of Science in Accounting and Finance. He is also a qualified Certified Public Accountant.
Victor Cole is a Principal of AION Partners. Victor heads the Investment Team at AION, focusing on new acquisitions and asset management. He personally oversees several of AION’s large assets in the firm’s portfolio. At AION, Victor has purchased close to $1 billion of real estate in office and multifamily deals.
Prior to joining AION, Victor was a member of JPMorgan's Commercial Mortgage Backed Securities group. He previously worked for NorthMarq Capital where he was involved in debt and equity placement on behalf of real estate investor and developer clients. Victor received a Bachelor of Science in Business Administration from Bucknell University and a Graduate Certificate in Real Estate from New York University's Real Estate Institute.
Sean Belfi focuses on new acquisitions and asset management responsibilities across AION’s portfolio. He also structures and oversees equity and debt partnerships. Prior to joining AION, Sean was a Vice President at Citi Private Bank. At Citi, he worked with High Net Worth clients and Institutional clients investing in real estate development projects and real estate funds. Prior to Citi, Sean practiced law in New York. Sean received a Juris Doctor from Brooklyn Law School and a Bachelor of Arts from Georgetown University. He received a Professional Certificate in Real Estate Investment and Finance from New York University Schack Institute of Real Estate. He also holds a Chartered Financial Analyst designation.
|Investment Name||City||State||Units||Acquisition Date||Total Capitalization||NOI at Acquisition||T12 NOI||NOI Increase|
|Cityside at Huntington Metro||Alexandria||VA||569||5/20/2011||$93,000,000||$4,497,435||$5,775,328||28%|
|Adams Run/Park Waverly||Philadelphia||PA||498||7/1/2013||$45,770,324||$2,489,832||$3,083,801||24%|
|Carroll Park||Middle River||MD||157||7/28/2014||$9,860,935||$638,169||874,610||37%|
|Morningside Park||Middle River||MD||128||7/28/2014||$9,781,778||$644,867||$793,631||23%|
|Woodlane Crossing||Edgewater Park||NJ||276||12/10/2015||$20,303,791||$1,246,352||$1,409,389||13%|
|Chateau Ridge||Pine Hills||NJ||255||12/10/2015||$12,244,329||$750,144||$881,818||18%|
|Brook at Colonial Park||Harrisburg||PA||626||12/10/2015||$46,708,136||$2,619,249||$2,842,602||9%|
|The Harrison||New Brunswick||NJ||316||9/29/2016||$60,841,766||$2,893,218||$3,380,034||17%|
|Valley Park Apartments||Bethlehem||PA||276||11/30/2016||$32,973,480||$1,780,653||$1,817,388||2.1%|
|Mulberry Station Apartments||Harrisburg||PA||100||11/30/2016||$9,310,339||$477,170||$574,681||20.4%|
|Canterbury Court Apartments||Philadelphia||PA||173||11/30/2016||$19,245,367||$1,016,196||$1,110,490||9.3%|
|Holly Court Apartments||Pitman||NJ||188||11/30/2016||$20,449,396||$1,069,252||$1,110,837||3.9%|
|Residences of South Hills||Pittsburgh||PA||1,050||3/30/2017||$62,545,549||$3,928,728||-||-|
|Greens at Forest Park||Baltimore||MD||190||5/11/2017||$15,031,252||$841,942||-||-|
|Investment Name||City||State||Units||Acquisition Date||Total Capitalization||NOI at Acquisition||T12 NOI||NOI Increase||Date Sold|
|Serrano||West Palm Beach||FL||192||3/10/2015||$21,600,000||$1,208,528||$1,491,953||24%||6/1/2016|
The Real Estate Company's bio and track record were provided by the Real Estate Company and have not been verified by RealtyMogul or NCPS.
In this transaction, RealtyMogul.com investors are to invest in Realty Mogul 90, LLC, which is to subsequently invest in AP Burlington Court Venture, LLC, a limited liability company that will, through a 100% owned subsidiary, hold title to the Property. The Real Estate Company is purchasing the Property for $12,145,597 ($57,836/unit), and the total project cost is $15,480,248 ($73,199/unit).
Upon acquisition, the Real Estate Company plans to implement interior and exterior renovations to increase value. The Real Estate Company's capital improvement budget is approximately $2.72 million ($12,975/unit), which is to be allocated as follows: (1) $881,998 ($8,400/unit) for interior renovations on 50% of the units; (2) $893,625 ($4,255/unit) for deferred maintenance; (3) $583,500 ($2,779/unit) for general property enhancements; and (4) $365,664 ($1,741/unit) for soft costs, construction management, and a contingency. 75% of the interior renovations are capitalized to the transaction, while the remainder will come from operating cash flow. Unit interior upgrades will include new cabinets and countertops, plumbing and electrical fixtures, vinyl flooring and carpets (in select units), and new appliances (in select units). Exterior and amenity improvements will consist of painting, carpentry, landscaping, a dog park, playground, paving, roofing, and a new signage package. The Real Estate Company plans to renovate 105 units (50% of the Property) over 36 months (2.91 units / month), which they state is a comfortable pace given their track record and in-house construction team. An average rent premium of approximately $156/unit/month is being estimated for renovated units, which includes a premium for the renovated finishes as well as moving rents to market. Per the rent roll, current net effective rent at the Property is $830, while the stabilized unit mix is underwritten to average $987.
|Laundry Room Enhancment||$50,000||$238|
|Leasing Office Enhancements||$15,000||$71|
|Base Building Capital / Deferred Maintenance Items||Cost||Cost/Unit|
|Water Infiltration, Termites||$152,000||$724|
|Cabinets, counters, plumbing, electrical, flooring, carpet, appliances||$881,998||$4,200|
|Unit Type||# of Units||% of Total||Unit (SF)||Total SF||Rent/Unit||Rent/SF|
|1 Bed, 1 Bath||158||75%||600||94,800||$935||$1.56|
|2 Bed, 1 Bath||52||25%||825||42,900||$1,143||$1.39|
This will be RealyMogul.com's second investment with the Real Estate Company. The first investment was in Greens at Forest Park, a multifamily property in Baltimore, MD.
RealtyMogul.com, along with AION Partners (the "Real Estate Company"), is providing the opportunity to invest in the acquisition of 870 E Route 130 (the "Property"), a 210-unit multifamily asset located in a gentrifying neighborhood of Burlington, NJ.
The primary objective of this investment is to acquire the Property, perform modest interior and exterior renovations to capture rental increases, then sell the Property within approximately five (5) years. The Real Estate Company sees this investment as an opportunity to capitalize on a well-located asset, in a gentrifying region, that exhibits high occupancy and favorable fundamentals to support the targeted renovation plan.
|Unit Type||# of Units||% of Total||Unit (SF)||Total SF||Rent/Unit||Rent/SF|
|1 Bed, 1 Bath||158||75%||600||94,800||$785||$1.31|
|2 Bed, 1 Bath||52||25%||825||42,900||$968||$1.17|
|Rental Comparables||Chateau Apartments||Northgate Village||Orchard Park||Total/Averages||Subject (Post Renovation)|
|Average Rental Rate||$1,120||$1,013||$1,089||$1,074||$961|
|Distance from Subject||2.5 mi||1.5 mi||3.0 mi||2.3 mi|
|Sale Comparables||Woodlane Crossing||Northgate Village||Croydon Station||Creek Village||The Regency||Total/Averages||Subject|
|# of Units||276||307||93||180||253||222||210|
|Average SF (per unit)||775||813||435||736||760||704||656|
|Distance from Subject||3 mi||1.5 mi||3.6 mi||5.6 mi||5.9 mi||4 mi||-|
*Lease and Sale Comparable information provided by Axiometrics and Real Capital Analytics.
The Property is located within the Northeast corner of the historic city of Burlington, NJ near the border of Burlington Township. The heart of Burlington is a historic district centered around High Street. The city is serviced by two different light rail stations. As one of the few towns in the southern part of NJ with a walkable downtown and waterfront, Burlington is in the process of undergoing a resurgence with new restaurants and mixed-use development. The Property is approximately 0.3 miles away from Burlington Pike, 2.9 miles from interstate 295, and 15.9 miles south of Trenton, NJ located on Route 130.
Per CoStar, the education and medical industries remain the metro’s backbone, comprising more than one-fifth of the metro-wide workforce. The segment is even more concentrated within the city limits, representing 12 of Philadelphia’s top 15 employers, including the University of Pennsylvania, Drexel University, Children’s Hospital of Philadelphia, and Thomas Jefferson University Hospital. Vacancy reportedly increased by less than 100 basis points from 1Q16 and there was tightening as the end of 2Q17 neared, with tangibles (outsized employment growth) and intangibles (the city’s continued rebirth as a destination city for work and play) working in tandem to counter supply pressure. Fundamentals in Philadelphia’s urban-core submarkets, where the majority of construction has been occurring and continues to do so, are buoyed by a mixture of affluent eds-and-meds renters, a distinct downsizer cohort, and a growing tech sector.
|Distance from Property||1 Mile||3 Miles||5 Miles|
|Expected Growth (2017-2022)||-0.4%||-0.2%||-0.1%|
|Median Household Income (2017)||$51,314||$63,006||$63,043|
|Median Home Value (2017)||$184,017||$221,773||$203,214|
*Demographic information was obtained from CoStar.
|Sources of Funds||Cost|
|Total Sources of Funds||$15,480,248|
|Uses of Funds||Cost|
|Broker-Dealer Placement Fee||$40,000|
|Total Uses of Funds||$15,480,248|
The projected terms of the debt financing are as follows:
- Lender: Freddie Mac
- Loan Type: Permanent / Senior
- Recourse: Non-recourse (Standard Carveouts)
- Loan Amount: $10,000,000 ($47,619/unit)
- Lender Reserves: $2,380,433 ($11,335/unit)
- Interest Rate: 2.25% + 1-Month LIBOR
- Loan to Value: 82.3%
- Loan to Value (Net of Future Funding): 62.7%
- Loan To Cost: 64.6%
- Term: 120 Months
- Amortization: 30 Years
- Interest Only: 24 Months
- Prepayment: 12-month lockout, 1% thereafter
*There can be no assurance that a lender will provide debt on the rates and terms noted above, or at all. All rates and terms of the debt financing are subject to lender approval, including but not limited to possible increases in capital reserve requirements for funds to be held in a lender controlled capital reserve account.
AP Burlington Court Venture, LLC intends to make distributions of all available cash and capital proceeds to investors (Realty Mogul 90, LLC, Other LP Equity, and Real Estate Company, collectively, the "Members") as follows:
- First, to all Members with unreturned Capital Contributions pro rata (in proportion to their relative unreturned Capital Contributions), until such time as aggregate distributions provide Members a nine percent (9%) annual return, compounded monthly, on their unreturned Capital Contributions;
- second, to all Members with unreturned Capital Contributions pro rata (in proportion to their unreturned Capital Contributions) until the Members have received a return of the aggregate amount of their Capital Contributions; and
- third, (A) twenty-four and four-tenths percent (24.4%) to the Manager, (B) six tenths of one percent (0.6%) to RM Manager, and (C) seventy-five percent (75%) to all Members pro rata (in proportion to their relative Capital Percentage)
Note that these distributions will occur after the payment of the Company's liabilities (loan payments, operating expenses and other fees as set forth in the LLC agreement, in addition to any member loans or returns due on member loans).
Realty Mogul 90, LLC will distribute 100% of its share of excess cash flow (after expenses and fees) to the members of Realty Mogul 90, LLC (the RealtyMogul.com investors).
Distributions are expected to start in March 2018 and are expected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Real Estate Company, who may decide to delay distributions for any reason, including maintenance or capital reserves.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Effective Gross Revenue||$2,075,263||$2,330,176||$2,470,711||$2,595,213||$2,677,597|
|Total Operating Expenses||$1,321,822||$1,355,794||$1,386,914||$1,418,144||$1,448,716|
|Net Operating Income||$753,440||$974,382||$1,083,797||$1,177,068||$1,228,881|
|Distributions to Realty Mogul 90, LLC Investors||$66,677||$114,343||$64,993||$89,976||$2,187,279|
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Targeted Distributions to Investor||($50,000)||$2,545||$4,364||$2,481||$3,434||$83,484|
|Type of Fee||Amount of Fee||Received By||Paid From||Notes|
|Acquisition Fee||$121,456||Real Estate Company||Capitalized Equity Contribution||1.0% of Property purchase price|
|Broker-Dealer Fee||$40,000||North Capital 1||Capitalized Equity Contribution|
1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.
|Type of Fee||Amount of Fee||Received By||Paid From||Notes|
|Property Management Fee||3.0% of Effective Gross Income||AION Management||Distributable Cash||Real Estate Company Affiliate|
|Construction Management Fee||5.0% of Hard Costs||Real Estate Company||Capitalized CapEx Budget|
|Asset Management Fee||1.25% of Effective Gross Income||Real Estate Company||Distributable Cash|
|Management and Administrative Fee||1.0% of amount invested in Realty Mogul 90, LLC||RM Manager, LLC||Distributable Cash||RM Manager, LLC is the Manager of Realty Mogul 90, LLC and a wholly-owned subsidiary of Realty Mogul, Co.1|
1) Fees may be deferred to reduce impact to investor distributions.
The above presentation is based upon information supplied by the Real Estate Company or others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 90, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated”, “projected”, “forecasted”, “estimated”, “prospective”, “believes”, “expects”, “plans”, “future”, “intends”, “should”, “can”, “could”, “might”, “potential”, “continue”, “may”, “will” and similar expressions to identify these forward-looking statements.
Non-Transferability of Securities
The transferability of membership interests in Realty Mogul 90, LLC are restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Moreover, the estimated investment holding period described herein is only a projection, and there can be no assurance when or if an investment may be liquidated. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
Realty Mogul 90, LLC's investment in AP Burlington Court Venture, LLC will relate to a Property that will undergo some degree of renovation, a situation that does not always meet the financing criteria for conventional financing from institutional sources. Credit risk is inherent in the real estate financing industry, and there can be no assurance that the credit worthiness of the Real Estate Company will be sufficient to assure the full repayment of the Realty Mogul 90, LLC's common equity investment and thus Realty Mogul 90, LLC's ability to provide returns (or even repayment of principal) to investors.
The Real Estate Company has a signed term sheet with a lender to provide the debt financing for the acquisition of the Property, but there can be no assurance that the lender will complete financing on the rates and terms included in the underwriting being presented in the model for this investment opportunity. All rates and terms of the debt financing are subject to final lender committee approval, including but not limited to a modification in lender held capital reserve requirements that may result in a corresponding movement of certain funds currently projected as being held in a Real Estate Company controlled capital escrow account.
Interest-Only Loan Period
The loan being used to acquire the Property is expected to have an interest-only period during the first 24 months of the loan term, which means that there will be no reduction in the principal balance during that interest-only period.
Investors will be relying solely on the Real Estate Company for the execution of its business plan. The Real Estate Company may in turn rely on other key personnel with relevant experience and knowledge, including contractors and consultants. Members of AP Burlington Court Venture, LLC (including Realty Mogul 90, LLC) will agree to indemnify the manager in certain circumstances, which may result in a financial burden if any litigation results from the execution of the business plan. While the Real Estate Company has significant operating experience, AP Burlington Court Venture, LLC is a newly formed company and has no operating history or record of performance. Realty Mogul 90, LLC is pursuing a venture capital strategy through its investment in AP Burlington Court Venture, LLC, and the manager of Realty Mogul 90, LLC is expected to be treated as an investment adviser exempt from federal or state registration under this strategy.
Manager of Realty Mogul 90, LLC Will Participate in Real Estate Companys' Promote Interest
The manager of Realty Mogul 90, LLC will be entitled to a participation in the value of any excess distributable cash flow and any appreciation of the Property realized upon its sale. This could lead to a potential conflict of interest between the manager and Realty Mogul 90, LLC. Investors must recognize and agree to waive and bear the risk of this conflict of interest.
Capital Call Risk
The amount of capital that may be required by AP Burlington Court Venture, LLC from Realty Mogul 90, LLC is unknown, and although AP Burlington Court Venture, LLC does not require that its members contribute additional capital to it, it may from time to time request additional funds in the form of loans or additional capital. Realty Mogul 90, LLC does not intend to participate in a capital call if one is requested by AP Burlington Court Venture, LLC, and in such event the manager of AP Burlington Court Venture, LLC may accept additional contributions from other members of AP Burlington Court Venture, LLC. Amounts that the manager of AP Burlington Court Venture, LLC advances on behalf of Realty Mogul 90, LLC will be deemed to be a manager loan at an expected interest rate of 10%. Amounts that are contributed by existing or new members will be deemed to be additional capital contributions, in which case Realty Mogul 90, LLC's interest in AP Burlington Court Venture, LLC will suffer a proportionate amount of dilution.
Real Estate Market Risk
AP Burlington Court Venture, LLC's economic performance and value, and thus the value of investors’ investment in Realty Mogul 90, LLC, is subject to various risks associated with the Property. Real estate markets are affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors. Investments related to real estate are also subject to market valuation risks that may be caused by changing economic and local market conditions such as local real estate market conditions. The Property’s economic performance and value, and thus the value of investors’ investment in Realty Mogul 90, LLC, is subject to such risks, all of which are beyond the control of both Realty Mogul 90, LLC and AP Burlington Court Venture, LLC.
Apartment Complex - Competition
Competition in the Property’s local market area is significant and may affect the Property’s occupancy levels, rental rates and operating expenses. The Property will compete with other residential alternatives to attract tenants, including but not limited to other apartment units that are currently available for rent, new apartments that are built and condominiums/houses that are for rent or sale. If development of apartment complexes by other operators were to increase, due to increases in availability of funds for investment or other reasons, then competition with the Property could intensify. If the Property is not able to successfully compete with the competitive residential alternatives in the local or regional area this could adversely affect the ability of Real Estate Company Entity to sell the Property, rent its units as necessary to maintain occupancy, and/or to increase or maintain unit rental rates.
The Property is approximately 95% occupied, and the Real Estate Company intends to implement a capital improvement plan in its effort to maintain and/or increase that occupancy level. There can be no assurance that such renovations will be consummated on a timely basis, that such work will not materially adversely affect other aspects of the operation of the Property, or that the plan will result in the Property maintaining its occupancy level at rental rates in line with those projected. Any delays or adverse effects of such work could adversely affect the Property’s financial results or business operations and thus the value of the Company’s investment. Although the Real Estate Company believes that comparable properties are currently achieving rental rates that are in line with those expected from the Property, there can be no assurance that such rental rates will be achieved. Failure to realize such increased rental rates could adversely affect the Property’s financial results or business operations and thus the value of the Company’s investment.
The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Issuer Document Package for a discussion of additional risks.
The above presentation is based upon information supplied by the Real Estate Company and others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 90, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
(877) 781-7062Contact Investor Relations