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Funded
Multifamily
Bluerock Glenwood, DST
Atlanta, GA
INVESTMENT STRATEGY
INVESTMENT TYPE
Equity
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100% funded
Offered By Bluerock Exchange LLC
%* TARGET IRR %-%
5.14%* TARGET AVG CASH ON CASH
* TARGET EQUITY MULTIPLE
Estimated Hold Period 7-10 years
Estimated First Distribution 1/2018
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Explore this project
Overview
1031 eligible DST offering featuring a 91% leased Class A multifamily property that was built in 2016. Strong institutional Sponsor with significant multifamily experience.
Property at a glance
Year Built 2017
Number of Units 216
Current Occupancy 91%
Leverage 58.7% Loan-to-Cost / 65.0% Loan-to-Value
Parking Ratio 1.48/Unit
Acquisition Price

$50,250,000

Investment Highlights
Newly Constructed Class A Multifamily
Property acquired for $1,000,000 below appraised value
Experienced Sponsor with over $4 Billion in reported Assets Under Management
Low Leveraged Property (58.7% LTC) with 1.94x Debt Service Coverage Ratio based on the Year 1 Proforma
Management
Cumulative Distributions

Bluerock Exchange LLC

Bluerock Exchange, LLC, a Delaware limited liability company, is an affiliate of Bluerock Real Estate, LLC (“Bluerock”), a private equity real estate investment firm having sponsored a portfolio currently exceeding 16 million square feet of primarily apartment and office real estate. Bluerock's senior management team has an average of over 25 years investing experience, has been involved with acquiring over 35 million square feet of real estate worth approximately $10 billion, and has helped launch leading real estate private and public company platforms. The Trust is to be managed by BR Glenwood DST Manager, LLC, a Delaware limited liability company (the “Manager”), an affiliate of Bluerock.

Bluerock Property Management, LLC (the "Property Manager") has subcontracted all day-to-day, on-site management, leasing and related functions for the Property to Greystar Real Estate Partners (the "Property Sub-Manager" or "Greystar").  Greystar has approximately 415,634 units under management and was ranked as the #1 property manager on the National Multifamily Housing Council (NHMC)'s list of top 50 mangers in the nation.*

*Per the Sponsor 

www.bluerockre.com
  • R. Ramin Kamfar
    Founder and Chief Executive Officer
  • James G. Babb III
    Managing Director and Chief Investment Officer
  • Jordan B. Ruddy
    President and Chief Operating Officer
  • Simon Brower
    Managing Director
R. Ramin Kamfar
Founder and Chief Executive Officer

Mr. Kamfar has served as the Chairman and Chief Executive Officer of Bluerock since its inception in October 2002. Mr. Kamfar has approximately 20 years of experience in building operating companies, and in various aspects of real estate, mergers and acquisitions, private equity investing, investment banking, public and private financings, and retail operations. From 1988 to 1993, Mr. Kamfar worked as an investment banker at Lehman Brothers Inc., New York, New York, where he specialized in mergers and acquisitions, corporate finance and private placements. From 1993 to 2002, Mr. Kamfar was the CEO and Chairman of New World Restaurant Group, Inc. (now known as Einstein Noah Restaurant Group, Inc (NASDAQ: BAGL)), a company he founded and grew through a consolidation and turnaround of several companies to approximately 800 locations and $400 million in gross revenues and a portfolio of brands which included Einstein Bros.® and Noah’s NY Bagels®. From 1999 to 2002, Mr. Kamfar served as an active investor, advisor and member of the Board of Directors of Vsource, Inc., a technology company subsequently sold to Symphony House (KL: SYMPHNY), a leading business process outsourcing company focused on the Fortune 500 and Global 500. Mr. Kamfar received an M.B.A. degree with distinction in Finance in 1988 from The Wharton School of the University of Pennsylvania, located in Philadelphia, Pennsylvania, and a B.S. degree with distinction in Finance in 1985 from the University of Maryland located in College Park, Maryland.

James G. Babb III
Managing Director and Chief Investment Officer

Mr. Babb serves as Managing Director and Chief Investment Officer of Bluerock, which he joined in July 2007. He oversees all real estate sourcing, diligence, structuring and acquisitions for Bluerock. He has been involved exclusively in real estate acquisition, management, financing and disposition for more than 20 years, primarily on behalf of investment funds since 1992. From 1992 to August 2003, Mr. Babb helped lead the residential and office acquisitions initiatives for Starwood Capital Group, or Starwood Capital, most recently as a Senior Vice President. Starwood Capital was formed in 1992 and during his tenure raised and invested funds on behalf of institutional investors through seven private real state funds, each of which had investment objectives similar to ours (but not limited to multifamily investments), and which in the aggregate ultimately invested approximately $8 billion in approximately 250 separate transactions. During such period, Mr. Babb led or shared investment responsibility for over 75 investment transactions totaling approximately $2.5 billion of asset value in more than 20 million square feet of residential, office and industrial properties located in 25 states and seven foreign countries, including a significant number of transactions that were contributed to the initial public offering of Equity Residential Properties Trust (NYSE: EQR), and to create iStar Financial
Inc. (NYSE: SFI). Mr. Babb was also active in Starwood Capital’s efforts to expand its platform to invest in Europe. From August 2003 to July 2007, Mr. Babb founded his own principal investment company, Bluepoint Capital, LLC. Bluepoint was a private real estate investment company focused on the acquisition, development and/or redevelopment of residential and commercial properties in the Northeast United States and Western Europe. Mr. Babb received a B.A. degree in Economics in 1987 from the University of North Carolina at Chapel Hill.

Jordan B. Ruddy
President and Chief Operating Officer

Jordan Ruddy serves as President and Chief Operating Officer for Bluerock, which he joined in 2002. Mr. Ruddy has 20 years of experience in real estate acquisitions, financings, management and dispositions. From 2000 to 2001, Mr. Ruddy served as an investment banker at Banc of America Securities LLC, where he was responsible for various types of real estate investment banking transactions including equity offerings, debt placements and asset sales. From 1997 to 2000, Mr. Ruddy served as Vice President of Amerimar Enterprises, a real estate company specializing in value-added investments nationwide, where he managed acquisitions, financings, leasing, asset management and dispositions involving over 1,500,000 square feet of commercial and multifamily real estate. From 1995 to 1997, Mr. Ruddy served as an investment banker at Smith Barney Inc., where he was responsible for various types of real estate investment banking transactions including equity offerings, debt placements and asset sales. From 1988 to 1993, Mr. Ruddy served in the real estate department of The Chase Manhattan Bank, most recently as a Second Vice President. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate in 1995 from The Wharton School of the University of Pennsylvania, located in Philadelphia, Pennsylvania, and a B.S. degree with high honors in Economics in 1986 from the London School of Economics, located in London, England.

Simon Brower
Managing Director

Simon has been the Managing Director of Bluerock Exchange since June of 2016, and in his role, manages the marketing and distribution of Bluerock's 1031/DST products.

His experience in the securitized 1031 exchange business began in 2004, when he worked for TripleNet Properties, which later merged with Grubb & Ellis. Over a 6 year period, he held both sales and management positions and helped investors complete over $300,000,000 in 1031 exchanges. 

Immediately prior to joining Bluerock, Simon worked for KBS Capital Markets Group in Newport Beach, California. There, he served as Regional Vice President and was responsible for raising investor capital from financial advisors throughout Southern California.

Simon graduated from University of California, Irvine with a bachelor's degree in Economics. He lives in San Clemente with his wife and two daughters.

Track Record

Currently Owned Portfolio
Property Name Location Property Type Acquisition Date # Units  Approximate Acquisition Price
Alamance Reserve Burlington, NC Apartments 4.2014 240  $         23,790,000
Ansley Village Macon, GA Apartments 6.2014 294  $         31,760,000
Alexan City Centre Houston, TX Apartments 7.2014 340  $         83,000,000
Alexan Southside Houston, TX Apartments 1.2015 270  $         49,000,000
APOK Townhomes Boca Raton, FL Apartments 11.2016 90  $         28,900,000
Arium Grandewood Orlando, FL Apartments 11.2014 306  $         44,400,000
Arium Palmer-Ranch Sarasota, FL Apartments 1.2016 320  $         40,300,000
Arium Palms Gateway Orlando, FL Apartments 8.2015 252  $         37,000,000
Arium Gulfshore Naples, FL Apartments 1.2016 368  $         46,000,000
Arium Pine Lakes Port St. Lucie, FL Apartments 12.2016 320  $         38,300,000
Arium Westside Atlanta, GA Apartments 7.2016 336  $         75,500,000
Ashton Reserve Charlotte, NC Apartments 1.2016 473  $         66,550,000
Beach House Jacksonville Beach, FL Apartments 4.2016 228  $         51,570,000
Big Creek Alpharetta,GA Apartments 12.2016 372  $         84,460,000
Brooklyn Riverside Jacksonville, FL Apartments 6.2016 310  $         64,130,000
Chace Lake Birmingham, AL Apartments 9.2012 264  $         25,640,000
Clearwater Apartments Clearwater, FL Apartments 9.2015 240  $         46,250,000
City Walk Apartments Roswell, GA Apartments 12.2016 320  $         76,000,000
CoHo House Atlanta, GA Apartments 6.2014 128  $         20,760,000
Crescent Perimeter Atlanta, GA Apartments 12.2016 320  $         70,000,000
Domain Phase I Garland, TX Apartments 12.2015 301  $         52,590,000
Enders Place Orlando, FL Apartments 10.2012 198  $         25,100,000
Flager Village Fort Lauderdale, FL Apartments 12.2015 384  $       131,790,000
Grand at the Dominion San Antonio, TX Apartments 9.2017 320 $          51,725,000
Helios Atlanta, GA Apartments 6.2015 285  $         50,900,000
James on South First Austin, TX Apartments 11.2016 250 $         36,750,000​
Land Four Corners Davenport, FL Apartments 2.2016 270  $         38,850,000
Marquis at the Cascades I Tyler, TX Apartments 6.2017 328  $         44,650,000
Marquis at the Cascades II Tyler, TX Apartments 6.2017 254  $         28,500,000
Marquis at Crown Ridge San Antonio, TX Apartments 6.2017 352  $         39,500,000
Marquis at Stone Oak San Antonio, TX Apartments 6.2017 335  $         55,350,000
Marquis at TPC San Antonio, TX Apartments 6.2017 139  $         20,850,000
Park at Chapel Hill Chapel Hill, NC Apartments 2.2011 198  $           8,400,000
Park & Kingston Charlotte, NC Apartments 3.2015 168  $         31,250,000
Plaza Gardens Overland Park, KS Apartments 8.2008 200  $         25,500,000
Pres. Henderson Beach Destin, FL Apartments 3.2016 340  $         53,700,000
Preston View Morrisville, NC Apartments 2.2017 382  $         59,500,000
Sonoma Pointe Kissimmee, FL Apartments 8.2017 216  $         44,530,000
Sorrel Phillips Creek Frisco, TX Apartments 11.2015 252  $         52,050,000
Sovereign Apartments Fort Worth, TX Apartments 11.2015 322  $         47,650,000
Stonebrook Nashville, TN Apartments 12.2011 320  $         18,250,000
The Brodie Austin, TX Apartments 12.2016 324  $         48,900,000
The Nevadan Atlanta, GA Apartments 10.2016 480  $         68,250,000
Valley Townhomes Puyallup, WA Apartments 7.2008 220  $         42,570,000
Vickers Roswell, GA Apartments 12.2016 79  $         30,880,000
Villages of Cypress Creek Houston, TX Apartments 9.2017 384  $         40,700,000
Villages at Lake Boone Raleigh, NC Apartments 1.2016 240  $         40,000,000
Wesley Village Charlotte, NC Apartments 3.2017 301  $         58,000,000
West Morehead Charlotte, NC Apartments 1.2016 287  $         60,000,000
Whetstone Durham, NC Apartments 5.2015 204  $         35,600,000
Cummings Research Park I Huntsville, AL Office 11.2007 -  $         58,460,000
Cummings Research Park II Huntsville, AL Office 11.2007 -  $         63,990,000
Cummings Research Park III Huntsville, AL Office 11.2007 -  $         57,210,000
Summit at Southpoint Jacksonville, FL Office 12.2006 -  $         37,400,000
Town & Country St. Louis, MO Office 6.2008 -  $         51,790,000
Applebee's Jonesboro, GA Retail 4.2013 -  $           2,850,000
Dollar General Hartford, CT Retail 4.2013 -  $           1,800,000
Dollar General Jacksonville, FL Retail 4.2013 -  $           1,550,000
TCF Bank Chicago, IL Retail 4.2013 -  $           3,060,000
Walgreens Haltom City, TX Retail 4.2013 -  $           4,390,000
Walgreens Abilene, TX Retail 4.2013 -  $           5,040,000
TOTAL       14,460 $2,633,135,000
Sold Properties
Property Name Location Property Type Acquisition /Sale Date  Approximate Purchase Cost   Approximate Equity Invested   Total Gross Return  Gross IRR
Woodlands Hauppauge, NY Office 04/2013 - 05/2006 16,900,000 5,000,000 6,480,000 9.9%
The Ashford Atlanta, GA Apartments 11/2009 - 09/2011 19,750,000 2,040,000 4,190,000 47.9%
Lynd Portfolio Subtotal   Apartments   21,900,000 6,340,000 12,090,000 17.5%
   -  Mesa Ridge San Antonio, TX Apartments 12/2008 - 03/2011 6,550,000 2,010,000 4,810,000  
   -  Meadows Austin, TX Apartments 02/2008 - 10/2011 3,450,000 1,040,000 2,470,000  
   -  Stratford San Antonio, TX Apartments 12/2008 - 10/2012 11,190,000 3,290,000 4,810,000  
Tech Ridge Austin, TX Apartments 02/2010 - 08/2012 17,190,000 6,030,000 13,170,000 42.5%
Note 16 Nashville, TN Apartments 03/2012 - 06/2013 11,300,000 1,420,000 2,510,000 53.1%
Hillsboro Nashville, TN Apartments 09/2010 - 09/2013 31,600,000 3,900,000 8,560,000 33.1%
Meadowmont Chapel Hill, NC Apartments 04/2010 - 09/2013 37,000,000 4,700,000 11,330,000 32.0%
The Stratford Cary, NC Apartments 06/2012 - 12/2013 20,300,000 5,290,000 7,980,000 38.8%
Arbor Terrace Marietta, GA Apartments 05/2011 - 03/2014 15,500,000 7,890,000 10,010,000 10.2%
Creekside Village Chattanooga, TN Apartments 03/2010 - 03/2014 14,250,000 1,820,000 4,130,000 26.4%
Landmark St. Louis, MO Office 03/2007 - 07/2014 26,030,000 7,500,000   -24.5%
Estates at Perimeter Augusta, GA Apartments 09/2010 - 11/2014 24,950,000 1,930,000 2,410,000 6.5%
Grove at Waterford Hendersonville, TN Apartments 04/2012 - 11/2014 27,880,000 4,670,000 6,250,000 17.3%
23Hundred Berry Hill Nashville, TN Apartments 10/2012 - 01/2015 33,670,000 4,440,000 8,350,000 59.4%
Villas at Oak Crest Chattanooga, TN Apartments 04/2012 - 09/2015 15,520,000 2,900,000 3,730,000 15.5%
North Park Towers Southfield, MI Apartments 12/2005 - 10/2015 36,900,000 11,430,000 2,830,000 -12.2%
Artisan on 18th Nashville, TN Apartments 06/2013 - 10/2015 22,300,000 1,000,000 2,120,000 35.2%
Indian Springs El Paso, TX Apartments 09/2011 - 10/2015 12,350,000 2,740,000 2,690,000 -0.5%
Springhouse Newport News, VA Apartments 12/2009 - 08/2016 29,500,000 6,890,000 16,560,000 17.4%
Mesa Ridge San Antonio, TX Apartments 03/2011 - 11/2016 10,940,000 5,160,000 8,070,000 9.8%
EOS Orlando, FL Apartments 07/2014 - 12/2016 36,960,000 11,090,000 19,630,000 41.2%
Village Green Ann Arbor, MI Apartments 09/2012 - 02/2017 58,000,000 8,190,000 18,430,000 24.2%
Lansbrook Palm Harbor, FL Apartments 03/2014 - 04/2017 58,500,000 16,510,000 30,530,000 27.2%
Fox Hill Austin, TX Apartments 04/2015 - 04/2017 38,150,000 11,920,000 19,310,000 25.8%
MDA City Chicago, IL Apartments 12/2012 - 06/2017 54,870,000 9,760,000 22,680,000 24.3%
Total       693,180,000 150,510,000 $243,840,000  

*Figures do not reflect any fees that may have been associated with the transaction.

**These returns were provided by and calculated by the Sponsor

 
Business Plan

On December 13, 2017 the Sponsor acquired the Property from a third-party seller. Concurrently with the acquisition of the Property, the Trust obtained a loan from KeyBank under the Fannie Mae DUS program. The Property is master leased by the Trust to BR Glenwood Leaseco, LLC ("Master Lessee" or "Master Tenant") an affiliate of the Sponsor. The Master Tenant sub-leases the apartment units to the end-user tenants pursuant to residential leases. The Trust is a passive owner of the Property and will not be involved in any manner in the active management of the Property. BR Glenwood DST Manager, LLC (the "Manager") has been appointed to manage the Trust pursuant to the Trust Agreement.

The Trust expects to provide the Beneficial Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Beneficial Owners; and (ii) upon any disposition of the Property. The Trust intends to dispose of all of the assets in the Trust in a single sale of the Property. This strategy is anticipated to provide investors with the opportunity to perform a 1031 exchange following the disposition.

Property
Property Details

The Property is a 216-unit Class A Multifamily apartment community located in one of Atlanta's desirable neighborhoods with an average household income of $89,953 (per the CBRE appraisal). The Property was delivered in April 2017 and is still in the initial lease-up phase. Occupancy was 91% as of November 2017. The unit mix consists of 30 studios, 121 one-bedroom units, and 65 two-bedroom units. Average in-place monthly rents are $1,613 per unit ranging from $1,423 to $2,417. 

The Property currently offers numerous amenities including a saltwater swimming pool, fitness center, business center, bicycle repair/storage room, dog spa, bocce court, game room, and charging stations. In addition, the Property has controlled automobile and pedestrian access. 

Unit amenities include wood cabinets with quartz countertops, plank flooring in the kitchen area, nine-foot ceiling, in-unit washer and dryer, LED lighting, and private patios/balconies. 

Unit Mix
Unit Type # of Units Avg SF/Unit Avg Rent/Unit Avg Rent/SF
Studio 30 630 $1,287 $2.04
1 BR / 1 BA 121 732 $1,410 $1.92
2 BR / 2 BA 65 1,087 $1,927 $1.77
Total 216 825 $1,608 $1.94
Comparables

Rental Comparables
  Enso Station R Alexan EAV Alexan on Krog Inman Quarter 675 Highland Total / Averages Subject
# of Units 333 285 120 222 172 125 226 216
Year Built 2011 2017 2016 2015 2015 2016 2015 2017
Average SF (Per Unit) 993 917 901 936 849 997 919 825
Average Rental Rate (Per Unit) $1,462 $1,781 $1,468 $2,093 $1,913 $2,241 $1,743 $1,608
Average Rent PSF $1.47 $1.94 $1.63 $2.24 $2.24 $2.25 $1.90 $1.94

Source: Newmark Knight Frank Appraisal dated August 18, 2017​

Sales Comparables
  The Peninsula Buckhead Broadstone Court Heights at West Midtown Alexander on Ponce 935M Total / Averages Subject
Date Jul-17 Jun-17 May-17 Jan-17 Dec-16 - Dec-17
# of Units 311 250 244 330 282 283 216
Year Built 2008 2015 2016 2002 2010 2010 2017
Occupancy 95% 95% 90% 95% 96% 94.2% 91%
Purchase Price $63,500,000 $58,200,000 $57,500,000 $64,400,000 $58,450,000 $60,410,000 $50,250,000
$/Unit $204,180 $232,800 $235,656 $195,152 $207,270 $215,012 $232,639
Cap Rate 5.21% 4.70% 3.78% 5.00% 4.95% 4.73% 5.4%
Class A A A A A - A

Source: CBRE Appraisal dated November 13, 2017​

Property Appraisal available upon request. Please email investor-help@realtymogul.com.

Location

The Property is located along Glenwood Avenue in East Atlanta, a rapidly transforming area of the city approximately 2 miles east of downtown within the Glenwood Park neighborhood, a $150 million, award winning development, featuring a mix of well-designed homes and commercial spaces. East Atlanta has already become a highly desirable urban infill part of the city and the Property boasts a premier location near the intersection of Glenwood Avenue and the East Side Trail connection, part of the Atlanta BeltLine extension enhancing access and walkability to the entire Atlanta Metro area. Anchored by the BeltLine’s Eastside Trail, the area is home to several transformative, mixed-use developments such as Ponce City Market, Inman Park Village and Krog Street Market. The future wave of surrounding economic development includes Summerhill, Atlanta Dairies, The Beacon Atlanta, Atlanta Stockade, and Larkin on Memorial. Additionally, East Atlanta is the most prominent retail district in the city and offers tremendous access to a wide variety of award winning restaurants and trendy nightlife.

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Market Overview

The Property is located in Atlanta, Georgia in the Atlanta Metropolitan Statistical Area (“Atlanta Metro”) in the northern part of Georgia, along Glenwood Avenue, approximately 2 miles east of downtown Atlanta. The Atlanta Metro is comprised of approximately 4.4 million residents. From April 1, 2016 to April 1, 2017, the region added 78,300 new residents. The Atlanta region has grown by over 400,000 residents since 2010. The region is projected to add 2.5 million people by 2040, the equivalent of Metro Charlotte, bringing the Atlanta Metro region total to more than 8 million people. The Atlanta Metro is home to 26 Fortune 1000 Companies, 15 Fortune 500 Company Headquarters, and 220 companies in the Inc. 5000. 

According to the Bureau of Labor Statistics, job growth in Atlanta-Sandy Springs-Roswell, GA Metro Area was 2.4% in October 2017, reflecting 65,800 jobs added during a 12-month period. The metro job growth figure was above the national number of 1.4%. Axiometrics forecasts Atlanta-Sandy Springs-Roswell, GA Metro Area's job growth to be 2.6% in 2018. As of December 17, 2017, Axiometrics has identified 12,177 apartment units scheduled for delivery in 2017, of which, 8,919 have been delivered. As a comparison, there were 8,915 apartment units delivered in 2016. 

The Property is a part of the Atlanta-Sandy Springs-Roswell, GA apartment market. Effective rent increased 1.5% from $1,136 in 2Q17 to $1,153 in 3Q17, which resulted in an annual growth rate of 3.1%. Annual effective rent growth is forecast to be 3.0% in 2018, and average 2.5% from 2019 to 2021. The market's annual rent growth rate was above the national average of 2.2%. Out of the 120 markets ranked by Axiometrics nationally, Atlanta-Sandy Springs-Roswell, GA Metro Area was 26th for quarterly effective rent growth, and 42nd for annual effective rent growth for 3Q17. The market's occupancy rate increased from 94.3% in 2Q17 to 94.6% in 3Q17, but was down from 95.0% a year ago. For the forecast period, the market's occupancy rate is expected to be 94.2% in 2018, and average 94.2% from 2019 to 2021.

Submarket Overview

Per Axiometrics, the Property is located in the South Fulton submarket of the Atlanta-Sandy Springs-Roswell, GA Metro Area. Effective Rent Growth was 3.5% in 3Q17, which ranks 12th of 20 submarkets. Axiometrics forecasts rent growth to average 2.8% from 2018-2021. Occupancy was 94.0% in 3Q17 which ranks 16th of 20 submarkets. Axiometrics forecasts occupancy to be an average of 93.6% from 2018-2021. The submarket has average rents of $955, which are below the market average of $1,153. 

Market and Submarket Overview information above was obtained from Axiometrics and the PPM.

Demographic Information

Demographics
Distance from Property 1 Mile 3 Miles 5 Miles
Population 14,972 142,934 325,487
Population Projection (2022) 15,650 149,709 341,159
Average Age 35,8 35.2 35.5
Median Household Income $74,164 $52,105 $51,486
Average Household Size 2.0 2.0 2.1
Median Home Value $265,561 $242,497 $240,419
Owner Occupied Households 4,471 27,631 61,916
Renter Occupied Households 2,679 36,455 74,266
Population Growth 2017 -2022 4.53% 4.74% 4.81%

Demographic information above was obtained from CoStar.

This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. RealtyMogul.com and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.

Photos
Financials
Sources & Uses

Total Capitalization
Sources of Funds Cost
Debt $32,662,000
Equity $22,741,834
Total Sources of Funds $55,403,834
Uses of Funds Cost
Purchase Price $50,250,000
Acquisition Fee $1,005,000
Financing and Other Closing Costs $1,285,992
Selling Commissions $1,364,510
Dealer Fee $284,273
Placement Agent Fee $318,386
Organizational & Offering Expenses $136,451
Lender Controlled Reserves $108,000
Trust Controlled Reserves $400,000
Acquisition Closing Costs $251,222
Total Uses of Funds $55,403,834
Debt Assumptions

The Property has existing debt: 

  • Loan Origination Date: 12/13/2017
  • Lender: KeyBank Fannie Mae DUS
  • Loan Proceeds: $32,662,000
  • Loan to Cost: 59.0%
  • Interest Rate: 4.21% Fixed
  • Amortization: 30-year amortization
  • Interest Only: 5-year interest-only
  • Recourse: Non-recourse to the Trust, but recourse to the Trust and principals of the Sponsor for certain (i) "bad acts", and (ii) environmental indemnification
  • Term: 10 years
  • Yield Maintenance: 84 months with a minimum 1% of outstanding loan floor  
  • Prepayment Penalty: 1% if loan repaid after the expiration of yield maintenance period but before the last calendar day of the fourth month prior to the month in which the loan matures
Distributions

The Sponsor is to make distributions directly to investors who own a beneficial interest in the DST on a pro-rata basis.

Distributions are expected to start for each investor within 45 days of the completion of that investors purchase of beneficial interest in the DST. Distributions are targeted to continue on a monthly basis thereafter. These distributions are at the discretion of the Sponsor and made directly by the Sponsor, neither Realty Mogul Co. nor any of its affiliates have any control or discretion on the timing or amount of distributions.

Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From Notes
Acquisition Fee $1,005,000 Sponsor Capitalized Equity Contribution 2.0% of Purchase Price.
Selling Commission 6.00% of offering proceeds Broker Dealers Capitalized Equity Contribution Paid to North Capital(1) or other licensed broker-dealers that are Selling Group Members based on the amount of equity capital raised. Surplus fees retained by Sponsor.
Dealer Fee 1.25% of offering proceeds Broker Dealers Capitalized Equity Contribution 1.25% based on the amount of equity invested by investors through RealtyMogul.com, third-party Broker Dealers (including North Capital(1)) are entitled to additional fees based on equity they originate. Surplus fees retained by Sponsor.
Placement Agreement Fee 1.40% of offering proceeds Broker Dealers Capitalized Equity Contribution Managing Broker-Dealer will receive a fee up to 1.4% of the Total Sales, which it may at its sole discretion partially re-allow to Selling Group Members for non-accountable marketing expenses in addition to any other allowances.
Organization and Offering Expenses 0.60% of offering proceeds Sponsor Capitalized Equity Contribution The Sponsor and its affiliates will be entitled to reimbursement for Organization and Offering Expenses, on an accountable basis, estimated at $136,451 or 0.60% of the Offering Amount.
Disposition Fee 3.50% Sponsor Sale Proceeds 3.5% of Sales Price 
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From Notes
Asset Management Fee 0.20% of Purchase Price Manager Operating Cash Flow  
Property Management Fee 2.5% of Effective Gross Income Property Manager Operating Cash Flow GREP Southeast, LLC ("GREP"), an unaffiliated party, will perform the property management on the Property. GREP is an affiliate of Greystar Real Estate Partners
Master Lease Operating Profit N/A Master Lessee Operating Cash Flow The Master Lessee will retain net operating revenues from the Property that exceed the total rent payable to the Trust under the Master Lease.

Notes:

(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.

The above presentation is based upon information supplied by the Sponsor or others.  Realty Mogul, Co. along with its 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.

This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. RealtyMogul.com and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.

Disclaimers
Disclaimers

Review of PPM

Before making any investment decision, potential investors should carefully review the Private Placement Memorandum prepared by Sponsor (the "PPM"), including but not limited to, the Risk Factor section of the PPM and all exhibits of the PPM. The PPM contains additional risk factors and information regarding the DST that are not contained herein.  


Real Estate Investment Risk

Any investment in real estate carries certain inherent risks, and there is no guaranty as to the future occupancy of the Property or operating results.  Factors which might influence outcome include:

  • Changes in national or local economic conditions
  • Changes in the local market, including the entry of new competitors
  • Changes in the financial condition of the major tenant or tenants
  • The occurrence of casualties or natural disasters
  • The enactment of unfavorable laws

1031 Risk

Although it is intended that interests will be acquired on a tax-deferred basis under Code Section 1031, each investor must satisfy a number of technical requirements to qualify for tax deferral under Section 1031. Also, no assurance can be given that investors will be able to complete a qualifying Section 1031 exchange in the future when the Property is sold.


DST Risk

IRS established seven prohibitions over the powers of the DST Trustee, which include the following:

  • Once the offering is closed, there can be no future equity contribution to the DST by either current or new co-investors or beneficiaries
  • The DST Trustee cannot renegotiate the terms of the existing loans, nor can it borrow any new funds from any other lender or party
  • The DST Trustee cannot reinvest the proceeds from the sale of its investment real estate
  • The DST Trustee is limited to making capital expenditures with respect to the property to those for a) normal repair and maintenance, (b) minor non-structural capital improvements, and (c) those required by law
  • Any liquid cash held in the DST between distribution dates can only be invested in short-term debt obligations
  • All cash, other than necessary reserves, must be distributed to the co-investors or beneficiaries on a current basis, and
  • The Trustee cannot enter into new leases or renegotiate the current leases

Risks of Investing in Multifamily Rental Properties; Competition

The rental of multifamily residential space is a highly competitive business. Ownership of the Property could be adversely affected by competitive properties in the real estate market, which could affect the operations of the Property and the ultimate value of the Property. Success in owning the Property, therefore, will depend in part upon the ability of the Master Tenant, the Property Manager and the Property Sub-Manager (i) to retain current tenants at favorable rental rates; (ii) to attract other quality tenants upon the termination of existing leases if the existing tenants fail to renew or as otherwise needed; and (iii) to provide an attractive and convenient living environment for the tenants.


Competition from Apartment Communities in the Surrounding Geographic Area

A number of apartment communities of similar size and amenities are located in the Property’s immediate apartment sub-market. See “Market and Location Overview – Competitive Properties” in the PPM. There are a number of Class A apartment communities in the surrounding region that may be more attractive to renters. Competing apartment communities may reduce demand for the Property, increase vacancy rates, decrease rental rates and impact the value of the Property itself. There may also be additional real property available in the general vicinity of the Property that could support additional multifamily properties. An analysis of Axiometrics data as of Q2 2017 on all existing, planned, and under construction apartment communities in the Property’s submarket vicinity reveals that there are a total of seven Class A apartment communities comprising approximately 2,384 units currently in lease up and an additional three communities comprising approximately 1,000 units under construction. Further, there is one additional project comprising 401 units in the planning stages. If newer housing is built, it may siphon demand away from the Property, as newer housing tends to be more attractive to prospective tenants. It is possible that tenants from the Property will move to existing or new apartment communities in the surrounding area, which could adversely affect the financial performance of the Property. Competition from nearby apartment communities could make it more difficult to attract new tenants and ultimately sell the Property on a profitable basis. The Property could also experience competition for real property investments from individuals, corporations and other entities engaged in real estate investment activities. Other properties and real estate investments may be more attractive than the Property. There is no assurance that the Property Manager or the Property Sub-Manager will be able to attract residents to the Property given these facts.


The Property is Subject to Risks Relating to its Local Real Estate Market

Weakness or declines in the local economy and real estate market could cause vacancy rates at the Property to increase and could adversely affect the Trust’s ability to sell the Property under favorable terms. The factors which could affect economic conditions in the market generally include business layoffs, industry slowdowns, relocations of businesses, changing demographics, infrastructure quality and any oversupply of or reduced demand for real estate. Declines in the condition of the market could diminish your investment in and value of the Property.


Interest-Only Loan Period

The loan used to acquire the Property is expected to have an interest-only period for the first 60 months of the loan term, which means there will be no reduction in the principal balance during that interest-only period.


Performance of the Master Tenant Under the Master Lease

The ability of the Trust to meet its obligations is dependent upon the performance of the Master Tenant and its payment of Rent and other payments required under the Master Lease. ​


The Master Tenant Has a Limited Right to Defer Rental Payments Under the Master Lease

Under the Master Lease, if the Property’s operating cash flow is insufficient to pay all of the associated expenses of the Property (not including the Asset Management Fee), the full Base Rent, then in such event, the Master Tenant has a limited right to defer and accrue a portion of the Additional Rent and Supplemental Rent payments due under the Master Lease (but not any portion of the Base Rent required to make debt service payments due under the Loan Documents). Because the Master Tenant may accrue a portion of the Additional Rent and Supplemental Rent, it will not be required to call the demand note from Bluerock in order to make up such a shortfall. In such an instance, Purchasers may receive less or more varied distributions than they would have if the Master Tenant were required to call the demand note to fund any such Rent shortfall. Furthermore, if future cash flow from the Property or disposition proceeds are insufficient to pay the accrued Rent and Bluerock is unable to fund the demand note when called, then the Trust may never receive the full amount of any such accrued Rent, which could materially and adversely affect the returns to the Purchasers. Additionally, in the event that the Master Tenant elects to defer payment of a portion of the Rent, although the issue is not completely settled under existing law, under Section 467 of the Code, Beneficial Owners may be required to report and pay tax on rent in accordance with the rent schedule attached to the Master Lease, even though the Master Tenant may have elected to defer the payment of a portion of such rent. As a result, Beneficial Owners may be required to recognize rental income even though rent is not being fully paid, and therefore Beneficial Owners may have to use funds from other sources to pay tax on such income. See “Summary of the Master Lease.”


Conflict of Interest Risk

There are various potential conflicts of interest among the Sponsor, the Trust, the Managers, the Master Tenant, the Property Managers, and others engaged in the management and operation of the Property, one or more of whom may be affiliated with the others. 


Forward-Looking Statements

The PPM has based these forward-looking statements on its current expectations and predictions about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Property, including, among other things, factors discussed below:

  • General economic performance of the local and national economy;
  • Required capital expenditures at the Property
  • Competition from properties similar to and near the Property
  • Adverse changes in local population trends, market conditions, neighborhood values, and local economic and social conditions
  • Supply and demand for property such as the Property
  • Interest rates and real estate tax rates
  • Governmental rules, regulations and fiscal policies
  • The enactment of unfavorable real estate, rent control, environmental, zoning or hazardous material laws
  • Uninsured losses
  • Anticipated market capitalization rates at the time of sale

Limited Transferability of Securities

Each Beneficial Owner will be required to represent that he is acquiring the Interests for investment and not with a view to distribution or resale, that such Beneficial Owner understands the Interests are not freely transferable and, in any event, that such Beneficial Owner must bear the economic risk of investment in the Interests for an indefinite period of time because: (i) the Interests have not been registered under the Act or applicable state “Blue Sky” or securities laws; and (ii) the Interests cannot be sold unless they are subsequently registered or an exemption from such registration is available. There will be no market for the Interests and the Beneficial Owner cannot expect to be able to liquidate their investment in case of an emergency. See “Restrictions on Transferability” in the PPM. Finally, the sale of the Interests may have adverse federal income tax consequences. See “Federal Income Tax Consequences” in the PPM.


Sale of the Property

The proceeds realized from the sale of the Property will be distributed among the Beneficial Owners, but only after satisfaction of the claims of other third-party creditors and Affiliates of the Sponsor. The ability of a Beneficial Owner to recover all or any portion of its investment, accordingly, will depend on the amount of net proceeds realized from such sale and the amount of claims to be satisfied therefrom. There can be no assurance that the Beneficial Owners will realize gains on sale of the Property.


No Representation of Beneficial Owners

Each Beneficial Owner acknowledges and agrees in the Purchase Agreement and Escrow Instructions that legal counsel representing the Trust, the Sponsor, the Manager, the Master Tenant, the Depositor and their Affiliates do not represent, and shall not be deemed under the applicable codes of professional responsibility to have represented or to be representing, any or all of the Beneficial Owners.​


Environmental Risk

Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at or affecting the Property. The Property has been evaluated for environmental hazards on behalf of the Lender pursuant to a noninvasive Phase I Environmental Site Assessment Report, dated November 2, 2017 prepared by Blackstone Consulting, based on a site visit conducted on October 17, 2017. The Phase I Report revealed no evidence of recognized environmental conditions (“RECs”) in connection with the site and no further investigation was recommended.


Performance of the Master Tenant Under the Master Lease

The ability of the Trust to meet its obligations is dependent upon the performance of the Master Tenant and its payment of Rent and other payments required under the Master Lease. ​


Trustee and the Manager Have Limited Duties to Beneficial Owners

The Trustee of the Trust and the Manager will not owe any duties to the Beneficial Owners other than those duties set forth in the Trust Agreement. In performing its duties under the Trust Agreement, the Trustee will only be liable to the Beneficial Owners for its own willful misconduct, bad faith, fraud or gross negligence. Similarly, the Manager will only be liable to the Beneficial Owners for its own fraud or gross negligence.


Investor Equity Diluted 1%

The equity that will be utilized for purposes of calculating distributions is stated as $22,741,834, which is $227,418 more than the total equity contribution described in Sources & Uses. 100% of the equity required to close the transaction will be funded by investors, which will be diluted by 1% so that the Sponsor will have a 1% ownership stake for which they will make no cash contribution but will receive cash distributions. ​


No RealtyMogul Site Visit

The Property has not been physically inspected by a representative of RealtyMogul or any of its affiliates.

Tax Abatement

The Property currently benefits from a significant long-term real estate tax abatement through participation in the Development Authority Program. Atlanta developers have been capitalizing on this tax abatement program for more than 10 years and it is believed that he tax abatement will continue to be utilized throughout the target hold period. If the use of the Tax Abatement benefits by the Trust is in some manner impaired during the target hold period the Trust may be subject to paying significantly greater taxes which could have a significant negative impact on the performance of the Trust.

The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Private Placement Memorandum for a discussion of additional risks.

The above presentation is based upon information supplied by the Sponsor and others. Realty Mogul, Co., along with its 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.

This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. RealtyMogul.com and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.

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