ny equity investments ppt deck design

NEW YORK EQUITY INVESTMENTS

NYEIBROOKLYN FUND 1

~ I n v e s t m e n t O p p o r t u n i t y ~

NYC Multifamily reaches record values

According to Real Capital Analytics, capitalization rates for multifamily properties have been 5.0% on average, similar to levels in 2006-2007.

For all transactions over $2.5 million, total volume of multifamily sales in all boroughs reached $12.0 billion last year, slightly below the $12.2 billion reached in 2007.


Historically Low Cap Rates

Historically low cost of debt

The combination between low interest rates, strong fundamentals, and investor optimism has created an environment where properties are selling at historically low caps.

Investor optimism

Strong fundamentals


Caps remaining low

We are near the peak of the a cycle, however this peak will be prolonged in NYC due to a continuation of the driving factors.


Caps remaining low

Despite the historically low cap rates, spreads between cap rates and the 10 year treasury is relatively high, giving cap rates the chance to remain low as the treasury increases. Rates remaining relatively low.


Caps remaining low

• In December the FOMC stated that as long as the U.S. unemployment rate remains above 6.5%, and while inflation remains below 2.5% it will continue to purchase treasuries and mortgagee backed securities up to 85 Billion per month indefinitely., than the cost of capital.

• Mortgage rates will remain relatively low until employment drops to 6.5% and inflation reached 2.5%

• Even after employment and inflation targets are achieved, the federal funds rate will continue to be near zero, further reassuring that rates will remain relatively low in the near future.

• Values are more predicated on the fundamentals and investor optimism, than the cost of capital.


Caps remaining low

Fundamentals remain strong


Caps remaining low

Investor optimism continues to increase


Selling Opportunity

• With cap rates remaining low it creates a tremendous opportunity to realize high residual values.

• How will we acquire properties at prices that can be then sold back into this high cap rate environment?

~ I n v e s t m e n t S t r a t e g y ~

Value add Opportunities

• Properties that have been trading at historically low prices are properties sold into the core markets; not distressed properties.

• We will target problem assets off-market that are trading at discounts. – add value through repositioning and strategic asset management. – Then sell them back into the core market frenzy.

Our Investment objectives are straight forward:

To buy distressed properties, add value, and sell back into the core markets at historically low caps and high values.


Opportunistic and Value-add approach

• Renters are paying unprecedented amounts of their incomes on housing. – According to the NYC comptroller, in NYC last year almost 30% of all

households spent more than 50% of their net income on housing. – Nearly 20% of households in the city spent more than 75% of their net income

on housing. • Additionally property taxes and operating costs are rising.

– Operating and maintenance costs in recent years have climbed an incredible 6.0% per year on average over the past 10 years, as measured by the City’s Price Index of Operating Costs (PIOC).

• With gross rents staying near flat and operating expenses increasing, it will be difficult for investors to realize returns by buying stabilized properties and depending on rental growth as they have in the past.


Location and Demographics

• Why Brooklyn?– Areas that have recently matured and still have many value-add opportunities. – Under retailed: 39% Below national average– Population: Brooklyn will continue to be the most populous borough, adding

another 10.3 percent from 2000 - 2030 to achieve a population of 2.72 million in 2030.

– Consistent rental growth – Dynamics: Looked at as a destination


Target asset classes

• Rent regulated buildings

• Undervalued retail

• Residential to condo

• Affordable housing

• Office to residential


Rent Regulated Buildings

Over 40% of New York City's housing stock is regulated or owned by a city agency.


Undervalued Retail

• Retailers are following the residential surge in Brooklyn.

• Retail sales per capita ratios has Brooklyn, NY at 39% below the national average.

• New Retailers

– H&M, Fulton Mallin Downtown Brooklyn

– J.Crew, Court Streetin Cobble Hill

– Whole Foods, Gowanus


Condo

Brooklyn Condo Market is here as the average sales price rose 21.6% from last year.


Acquisition Advantages

• Extensive network of brokers, lawyers, and title companies

• Readily available capital• Direct business approach • Strategic Market analysis • Rapid Due Diligence • Disciplined and analytical

property underwriting process

• Streamlined documentation and closing process


The Investment Platform

1. Preliminary Acquisition Phase– Property condition– Property size– Conservative Metrics– Price Point– Value Add Potential

2. Due Diligence– Property underwriting– Property specific risks and opportunities – Market analysis– Pro forma projections– Site Visits

3. Property Acquisition Phase– Negotiation and pricing strategies– Pricing parameters – Bidding process– Final walk through– Inspection– Specific property enhancement program

4. Value add phase• Return driven improvements• Renovation teams• Strategic asset management plan implemented• Strategic leasing and marketing • Tax incentives• Ancillary income

5. Portfolio Management and Disposition Phase• Property Management • Rental Increase Schedule • Property Level Accounting• Opportunistic selling • Network of local brokers

• Portfolio vs. Building sales


Investment Advantages

• The partnership will look to purchase distressed properties that the average investor is not sophisticated or prepared to handle.

• The GP has surrounded himself with some of the most experiences and credible real estate professionals in the industry.

• The Managing partners extensive experience in Investment, Development, Brokerage, property management, and finance will allow the partnership to effectively reposition properties in the market.


Investment Advantages

• Unbelievable Market Conditions

• The right location• Streamlined acquisition

process• Comprehensive property

underwriting process• Extensive local network for

referrals• Rapid Due Diligence• Strategic asset

Management• Cost effective renovations• Targeted exit strategy

The Team

Robert Primeau Founder and Principal

Robert is responsible for the acquisition, strategic asset management, pro forma analysis and investment strategy for NYEI. Robert will also oversee the construction and due diligence of properties along with the general contractor, architect and legal team. Roberts experience in development, investment, and property management, coupled with his knowledge of rent regulation, tax abatements, and repositioning strategies will enable the NYEI to maximize returns for investors.

Previous: Partner - Sundown Corporation

Specializes in developing single-family homes in Rhode Island. Robert decided to turn his attention to the New York Market and has been investing himself in multifamily in the Brooklyn area. Robert is adept in underwriting properties using Excel to calculate returns. Robert also has his Brokers license in both Rhode Island and New York State. In addition he holds a Certificate in Property Management and a Certificate in Real Estate Investment from New York Real Estate Institute and is perusing a M.S. Real Estate Investments and Finance from NYU.

The Team

Architect - Leonard Colchamiro PC AIA Architect & Planners

• LC PC AIA has been in practice since 1973 and has been responsible for the design of commercial, residential, industrial, educational, day care, retail, and health-related Projects in the New York Metropolitan Area and in major cities throughout the United States , England , Denmark , Israel , and Peru. Projects include new construction, restoration, adaptive reuse, space planning, interior design, and various combinations. The firm has special expertise in the design, public agency processing, and construction management of complex multi-use and adaptive reuse projects. New York City municipal agencies (Department of Buildings, Landmark Preservation Commission, Waterfront Permits Unit, etc) expediting is handled in-house.

• Senior personnel participate in design and production and monitor budget, schedule, and regulatory agency status at all phases of each project. In addition to the design of buildings and spaces the firm provides support services in the form of program planning, site selection, feasibility analysis, as well as in-progress construction inspections.

The Team

General Contractor - Gregg Resnick, Allied Arborcraft Corp.

• In 1980, Jerry Resnick set out to renovate residential and commercial properties with high-caliber workmanship at a fair price. Jerry believed he only needed three things to run a successful business – honesty, customer service and quality. Allied Arborcraft Corporation was born, and thousands of satisfied customers later, the formula still holds true. Gregg Resnick took over as President in 1995, working together with Jerry until his retirement in 1996. Today, Gregg continues to uphold his father’s principles, attention to detail and individual service.

http://www.linkedin.com/search?search=&company=Allied+Arborcraft+Corp.&sortCriteria=R&keepFacets=true&trk=prof-0-ovw-curr_pos

The Team

Property Manger: Citadel Property Management Corp.

• Citadel Property Management is a full service real estate company servicing the New York metropolitan area. Our focus lies specifically in two main areas of real estate services; brokerage and property management. Citadels clients include individuals, private investors, commercial entities, syndications, co-ops and condominiums.

• Citadel’s management business was founded on the principles of hard work, integrity, responsibility, accountability and transparency. In brokerage; Citadel has the knowledge, experience and a sophisticated understanding of the NYC market to assist owners in marketing your property to gain the maximum exposure needed to attain the highest potential value.

The right structure

• The general partner will make capital contributions to the fund, aligning the managing partners interests with the limited partners.

• The general partner has used industry standard practices in the fund and has considered fees and distributions that are recommended by the Institutional Limited Partners Association (ILPA).

• The General Partner is required to receive a majority approval from the Advisory Board before moving forward with any acquisitions.

Return Structure

The structure is as follows:

1. Return of capital: 100% to the investors or limited partners to return capital invested.

2. Preferred return: 100% to the investors or limited partners until they have reached a 6% cumulative IRR.

3. Catch up: 100% to the general partners until they have

4. received 30% of the amount of the preferred return or

5. hurdle rate. (70/30 split is achieved)

6. Carried Interest: Remainder of profits will be split 70%

7. to LP’s and 30% to the GP. (70/30 maintained)

The Right Structure

• Fund Size: $5,000,000• Minimum commitment: $100,000• Investment Term: 3 Years* • General Partner Contributions: 5% of

total contributions• Management Fee: 2% of capital

commitments• Acquisition Fee: 2% of purchase price

of acquired assets• Leverage: At the discretion of the

General Partner

An Extraordinary Opportunity

An extraordinary opportunity to invest alongside investors and mangers with committed capital who are exceptionally qualified to manage this investment opportunity.

Thank you for your time

ny equity investments ppt deck design

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