Capstone -5-03-2016-final v2_compressed
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Transcript of Capstone -5-03-2016-final v2_compressed
EXECUTIVE SUMMARY
LeverageIRR18%
AveragecashoncashYield12.7%
Equitymultiple3.8X
Industrial-styleenvironmentallyresponsibledesignwithprogramtocatertotheexpectationsofthemillennials.
Designinaccordancewiththeneighborhood,andadaptedtotheneedsforliveworkandplay
• Pedestrian-friendlyandinvitingtothecommunity• Utilizingrooftopsforopenspace• Stormwatermanagementandreuseofstormwater• Reuseofexistingon-sitematerials
GIVING BACK
SUPPLY AND DEMANDThesupplyhasovercomethedemandinthelastsixyears—however,thedemandhasseenasteadygrowthyearbyyear.Theprojectedchangeinoccupancyforthenextthreeyearsvariesbetween-2%and2%,andtheaveragedailyroomisprojectedtoremainstable.InDowntown andMidtownAtlanta,theaverageoccupancyratein2015was70%withaveragerateof$140andRevPar of$98.60,accordingtotheHorwath HTLreport.
HOTEL
MARKET AccordingtoFranklinStreetrealestateadvisers,mixed-useprojectsfeaturingapartmentunitsremainattractiveinAtlanta,particularlywhenagrocerystoreanchorisinvolved.Currently,thegrocerystoresnearTheFelixsitearenotmixed-usesites. Theoptions foralocalgroceryare1.5milestoreachKroger,1.7milestoreachWal-MartSupercenter,andasfaras2milestoreachPublixfromthesite.TheRelatedGroupannouncedplansfora38-storyapartment-retailtoweron22Fourteenth Streettoincludea70,000squarefeet,multi-levelWholeFoodsMarketwhich isapproximately2milesawayfromtheFelix.
Retail LedbythemassiveAtlanticStationand12th&Midtownmixed-useredevelopmentprojects,Midtownhasplayedhosttosignificantretailconstructioninrecentyears.TheSubmarkettrendspresentapositivedemand,atotalof59,000squarefeetforthenextfouryears.TheFelixwilldeliver33,4446squarefeetofserviceandfoodretailspacein2019.
Inthe3and5-mileradius,only46%ofthepopulationarehomeowners,showingthepotentialdemandforTheFelixcondo.Theaveragehomevalueisinlinewiththeaveragesale pricesofTheFelixpotentialprice.
CONDO
OFFICE Amodestpositivenetabsorptionisexpectedovertheremainderoftheyear,alongwithnonewsupplydeliveries,whichwillshaveafewbasispointsfromthevacancyrate.Rentgrowthratesfortheyearareexpectedatapproximately4%onaverage.
AccordingtotheMotionPictureAssociationofAmerica,Georgianowranksthirdindomesticproduction,behindCaliforniaandNewYork.The248filmandtelevisionproductions shot inGeorgiarepresent$1.7 billionindirectspending inthestate.AccordingtotheGeorgiaDepartmentofEconomicDevelopment(GDED),2016figuresareprojectedtosurpassthoseof2015.Theindustry'sgrowthhasbeenfueledbymultiplefactors,includinga30%taxcreditincentive.
STUDIO
SUPPLY AND DEMAND
DEVELOPEMENT TIMELINE
2016 2017 2018 2019 2020 2021 2022PRE-CONST. 58
PARCELA-MARKET
PARCELB– HOTEL&CONDOS
PARCELC– OFFICE
PARCELD– STUDIO 5
6
6
1
2
1- MarkettempCertificationofOccupancy2- FinalCertificateofOccupancy
CONSTRUCTION LOAN
INVESTINATLANTA - NMTC
2026
PERMANENT LOAN
CONDOSALES
CASHFLOW - PARCELA- MARKET
CASHFLOWB/C/D
<..>
EXIT
JOINT VENTURE STRUCTURE
THIS AGREEMENT OF LIMITED PARTNERSHIP OF The Felix Partners, LLC (“agreement”) is entered into as of 1th day August, 2016 (“Effective Date”), by T3 Development, a Delaware limited liability company, as a General Partner, and AMC, a Florida limited liability company, as a Limited Partner. THIS LIMITED PARTNERSHIP OF The Felix Partners, LLC (“agreement”) shall invest 100% of there capital in The Felix, LLC (“Real Estate Property”).
JOINT VENTURE STRUCTUREContribution: On the Effective Date AMC, LLC shall contribute to the Partnership $8.2MM in the form of land title. This contribution represents 45% of the land acquisition price, the remaining $10,000,000 should be paid to AMC, LC from The Felix, LLC.
On the Effective Date T3 Development, LLC shall contribute to the Partnership $1.5MM in cash.
Contribution on the Real Estate Property: On the Effective Date The Felix Partners, LLC shall invest 100% of there capital in The Felix Equity LLC (“Real Estate Property”). The Partners agree to engage with a third party investor in the Real Estate Property company, of each will have a preferred return.
Waterfall#1:The cash available for distribution shall be distributed, following order of priority. (a) First, 81% to REITS Fund III and 19% The Felix Partners LLC until the 15% Preferred Return of REITS Fund III has been reduced to zero; (b) Next, 70% to REITS Fund III and 30% The Felix Partners LLC until the 20% Preferred Return of REITS Fund III has been reduced to zero; (c) Next, the remaining cash available for distribution after 20% Preferred Return of REITS Fund III has been reduced to zero, shall be distributed 60% to REITS Fund III and 40% The Felix Partners LLC.
Waterfall # 2: The “cash available for distribution” on the The Felix Partners LLC, shall be distributed in accordance with their Percentage Interest: 16% for T3 Development LLC and 84% for AMC LLC.