+
SBpacific
City View Apartment, San
Antonio
groupMontage, San Antonio
Montage, San Antonio
9/24/12
East Lake Laney Lofts, Oakland
+About SBpacific Group
Our History SB Pacific Group acquires under-utilized properties
and transforms them into vibrant, high-value real
estate assets
Located in Berkeley, California
Founded in 1986
Experience
Focus on value-add infill development
Handles large luxury redevelopment
Lake Merritt Lodge, Oakland
9/24/12
+Investment Philosophy
Texas and California
High density suburban property
Supervise construction and
rehabilitation projects
Superior network of contacts
Class B- to B+ or B renovations
Rehabilitation, repositioning, and
adaptive re-use
Geographic Specialization
Management Expertise
Fundamental Value-Driven Approach
9/24/12
+Acquisition Criteria
Property Types Multifamily rental
Retail & Office
Market Segment
Opportunistic value-add
Up-trending submarket ($5-
$20 million)
Near-term growth focus in
California and Texas
Lodge on Perrin Creek, San Antonio
9/24/12
+Recent Projects
San Antonio Apartment Portfolio
- 211 units bought with 65% occupancy
- Rent increase
- Full rehabilitation to 95% occupancy
East Lake Laney Lofts
-Renovated creamery to 26 Class
A Condos
- All units sold within
1 month of finish
City View Apartments
- 318 units re-branded to City View
- Rent increase and still own
- Full rehabilitation to 96%
occupancy
San Antonio Apartment Portfolio City View Apartments
San Antonio, TX
East Lake Laney Lofts
Oakland, CASan Antonio, TX
9/24/12
The Offering
Price: $9,000,000
Built: 1984
Price Per Unit: $43,269
Price Per Sq Foot: $58.90
Units: 208
GBA: 152,800
Land Area: +/- 7 acres
9/24/12
+
San Antonio and the Surroundings… San Antonio is the 7th largest city in the U.S with a population of 2.08 million
Montage at North Point is near the South Texas Medical Center which includes 45 medical institutions and over 28k professionals. Associated support businesses employ 23k. The average wage is 20% higher than the median San Antonio income.
Montage at North Point is a short distance to USAA, a San Antonio based diversified financial services group. Over 18,000 employees occupy the corporate headquarters at the corner of Fredericksburg and Huebner.
Location Profile
South Texas Medical
Center
9/24/12
+ Location Profile
9/24/12
+Location Highlights
Strategic Access Advantageously located within five minutes to
two of San Antonio’s largest employment centers
Short drive to San Antonio’s largest university, new retail centers, and state of the art entertainment
Flourishing Employment South Texas Medical Center, USAA and
Wonderland of the Americas Mall in submarket
Adjacent to Fredericksburg Road and a short distance to Interstate Highway 10 and Loop 410
9/24/12
+Apartment Unit Amenities
Indoor Amenities 208 Unit Garden Apartments in northwest submarket
Central HVAC and large walk-in closets (washer/dryer connections in select units)
Washer/dryer connections and vaulted ceilings in select units
Cyber cafe and fitness center
Two clothes care facilities
Professional Leasing Center
Outdoor Amenities Two swimming pools
Gated entry w/ picnic area and barbeque stations
Lush native landscaping with magnificent oak trees, limestone garden walls, and courtyards
Tennis Court
9/24/12
Apartment Unit Breakdown
Units Type Unit SF Total SF
48 1 Bed/1 Bath 500 24,000
88 1 Bed/1 Bath 700 61,600
48 2 Bed/2 Bath 900 43,200
24 2 Bed/2 Bath 1,000 24,000
208 735 152,800
9/24/12
+Apartment Comparable
Apartment Complex # of Units Avg. Size (SF) Avg. Market Rent Rent per sq.foot
Fountain Head 688 670 $683 $1.02
Sugar Hill 184 744 $647 $0.87
San Antonio Station 172 717 $682 $0.95
Broadstone Medical 384 676 $703 $1.04
Country View 272 784 $744 $0.95
Montage at North Point 208 735 $722 $0.98
9/24/12
+Rent Comparable
9/24/12
Discount
Value-AddOccupancy
Why Purchase Montage at
North Point?
Attractive Occupancy Current economic occupancy is 88% and
present physical occupancy is 96% our
target physical range is 95%
Increase occupancy and maximize
collections boosting revenue
Well Located Asset Ability to attain asset directly from lender
with asset management upside (Off
Market Opportunity)
9/24/12
Value-Add Opportunities
Exterior Additions Landscape trimming & sprinklers
Painting a portion of the building
Recoat and restripe the driveway
Interior Upgrades Replace carpet with Prego
Replace kitchen laminate countertops with granite
Two-tone painting
Timing Ideal due to expansion of South Texas
Medical Center
Historically low interest rate & depressed price
9/24/12
+Expected Development Results
General Notes
Current Occupancy 90%, Stabilized 88% / Water reimbursement through Conservice
Expenses based on City View Performance
4/11 3/12 Actual 3rd Year Pro Forma
Gross Scheduled Rent 1,491,264 1,597,442
Vacancy and Collection Loss 183,833 201,827
Net Rental Income 1,307,431 1,395,615
Other Income 49,961 134,872
Economic Occupancy
Physical Occupancy
88%
93%
87%
94%
Total Income 1,357,393 1,530,487
Total Expenses 935,091 893,480
Net Operating Income 422,302 637,007
9/24/12
+Purchase Price Analysis
General Assumptions
Assumes 75% Loan to Value
Total Cash Down payment includes 1/2 % loan fee, insurance, legal fees, title &
escrow, and capital reserve
Actual 3rd yr Proforma
Purchase Price 9,000,000
Down payment $2,707,850 $2,707,850
NOI 422,302 637,007
Mortgage Payment6.75MM 3.75% interest only due in
5 years)
253,125 253,125
Net Cash Flow 169,177 383,882
Return $ on $ 16.10% 17.06%
9/24/12
16.10%
17.06%
15.60%
15.80%
16.00%
16.20%
16.40%
16.60%
16.80%
17.00%
17.20%
• Actual
• Pro Forma
Cash on Cash Return
+Net Cash Flow & IRRScenarios IRR 2011 2012 2013 2014 2015 (Sale) Cap
Rate
1 24.96% -2,436,757 $326,300 342,720 367,361 3,942,804 5.75%
2 19.90% -2,436,757 $326,300 342,720 367,361 3,180,020 6.25%
3 15.06% -2,436,757 $326,300 342,720 367,361 2,530,241 6.75%
4 12.64%-2,436,757 $326,300 342,720 367,361 2,240,160
7.00%
9/24/12
24.96%
19.90%
15.06%12.64%
5.75% 6.25% 6.75% 7.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
IRR1 IRR2 IRR3 IRR4
IRR
Cap Rate
Our Market View
Key Advantages
Cheap Financing 3.75% in Pro forma Model
Attractive Market +10% Cash on Cash Return
Up-trending submarket
Property enhancements can push
rents higherLodge on Perrin Creek, San Antonio
9/24/12
+Projected Fees
Management Structure Fee
General Management receives an acquisition fee of .75% for
sourcing, seeding, negotiating, and closing opportunity.
Asset and Management Fee is 5%
Investors and general management will split the annual net cash flow 85/15 as
long as investors receive 6% annual return on their investment.
At closing, Investors and General Management will split all proceeds 80/20 after
meeting all obligations including but not limited to debt service and closing
costs.
9/24/12
+Experienced Team of Professionals
Responsible for strategic
management of the firm, Mr.
Sarfaty identifies, evaluates and
selects investment opportunities
for SB Pacific Group. Prior to
founding SB Pacific Group, Mr.
Sarfaty used his entrepreneurial
skills to establish several small
companies, including a
contracting business which he
continues to operate today.
Yuval BobrovitchPrincipal & Co-founder
He has held a real estate license since 1989.His experience
as a contractor and his eye for opportunity have helped Mr.
Sarfaty negotiate lucrative real estate transactions that
create lasting value.
Responsible for oversight of
construction projects, Mr.
Bobrovitch is involved in site
analysis, design development
and construction management.
Mr. Bobrovitch has extensive
experience in the construction
and renovation of multifamily
residential and commercial
properties. He is a general
contractor, and supervised all of
the early projects in the SB
Pacific Group Portfolio. Through his diligence, Mr.
Bobrovitch sets the standard by which the full upside
potential of properties should be reached.
9/24/12
Igal SarfatyPrincipal & Co-founder
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