River House Investment Profile

Transcription

1 River House Investment Profile Located in the center of Baton Rouge, the capital and second-largest city in Louisiana, River House will be a new mixed-use development including residences, office, and retail space. Anchored by Baton Rouge s primary employment generators Louisiana State University, the Capitol, and Downtown its unique work/live/play environment will bring home, office, and retail together in one central location. River House will welcome graduate students, professors, university staff, government workers, and professionals from throughout the city who seek convenience, simplicity, comfort, and the ability to commute to and from work without fighting highway traffic. Project Overview: River House will bring competitively-priced apartments, convenient office space and unique shops to a key corridor of Baton Rouge. This project is fully permitted by all appropriate government bodies to begin construction, and has the strong support of government officials from the federal, state, and local level. River House will connect businesses with customers, students with employers, and officials with citizens through its attractive design and host of amenities. Residential: River House will have 224 studio, 1- and 2-bedroom rental apartments, separated into 2 residential pods, each with two, four-story buildings Community amenities such as a clubhouse, activity space, and pool The residential occupancy rate in the area is currently about 97% Office: Approximately 3,000 ft 2 (3,340 m 2 ) of Class A Suburban office space, perfect for professional offices or small and medium-sized businesses Prime location on central Nicholson drive The office occupancy rate in the area is currently about 90% Retail: Approximately 17,000 ft 2 (1,580 m 2 ) of high-exposure retail space, ideal for a coffee shop, bank branch, or restaurant Ample parking for visitors The retail occupancy rate in the area is currently about 9% Site: River House is situated on approximately 9 acres (3.4 hectares) of property close to, and with sweeping views of, the Mississippi River Unique live/work/play environment all within one complex Office and Retail complex will front one of the city s busiest streets (Nicholson Drive), while Residences are set back close to the river Direct access to city and university buses, as well as a 3 mile (4.8 km) riverside bicycle path Water Campus: Announced in December 2013, the Water Campus will be a 27. acre (11.17 hectare) riverfront research park that will establish Louisiana as a world-class center for the best 1

2 available science on water management and coastal issues. The Water Campus, located just across Oklahoma Street from River House, will be an engine for economic development creating as many as 45,000 jobs over the next two decades and upon full build-out will house over 2,000 employees; it is slated to cost approximately $45 million in construction. In addition, plans for a $20 million street car line running from Downtown to the LSU campus are now in the works, which will pass directly in front of River House upon completion. Job Creation: River House will create approximately 150 direct, indirect, and induced jobs: Overall Employment Impact of River House Direct Employment Impact Indirect & Induced Employment Impact Overall Employment Impacts 22.3 jobs jobs jobs Capital Stack: River House will benefit from a variety of non-eb-5 sources of capital, including bank or private equity funds and developer equity. Therefore, the project will not be dependent on any fixed number of EB-5 investors in order to start or complete the development or create the jobs necessary for an EB-5 investment. Instead, River House will accept up to 13 EB-5 investors, allowing them to become involved in this exciting project. Source Value (Percent of Total) Notes First Mortgage USD $28.1 million (80%) Bank or private equity financing see below for more information Developer Equity USD $7 million (20%) 100% of this developer equity has already been contributed to the project EB-5 Investors From USD $0 to USD $.5 million TOTAL USD $35.1 million (100%, plus applicable EB-5 loan) The project can proceed with as few as 0 or as many as 13 investors The project will not be dependent on any fixed number of EB-5 investors in order to start or complete the development Bank Loan/Private Equity Financing: River House will obtain sufficient funds from a local bank (as well as private equity funds if needed) to cover construction costs. Developer Equity: the developers have invested significant equity into the project, and the strong government support for it is a direct result of the developers extensive current and planned investment. EB-5 Investors: because River House will benefit from significant third-party funding, no EB-5 investor financing is required to complete construction. However, we expect that the project will be open to investment by up to 13 EB-5 investors looking for an exciting and safe project in a superb location. 2

3 Job Creation Security: the completion of River House is not dependent on finding a minimum number of EB-5 investors. The number of jobs created by the project will be more than adequate to support the applications of our EB-5 investors. As a result, the project will not be delayed for failure to find a minimum number of EB-5 investors. Thus, early investors need not fear that their application may be delayed or denied because a full sale of the EB-5 units has not been completed. Government Support: River House has the strong backing of officials from the local, state, and federal government. The mayor and city council of Baton Rouge, officials from relevant state agencies, and both US Senators have contributed their efforts towards the project, and their substantial stake in its success helps ensure their continued support. Third-Party Construction Bond: River House will utilize a payment and performance bond, payment and construction completion assurance provided by a major insurance company, to ensure that the project is built according to plan and that all contractors and subcontractors are paid. In addition, after about 5 years, we intend to utilize a variety of strategies in order to return investors money, including: Sale or Refinance: River House s prime location, exciting design, and unique work/live/play concept should place it among the most desirable developments in the city for residential, office, and retail space. In addition, the occupancy rates in this location for all components of the project are above 90%. As a result, we anticipate demand for the space will be very high, and thus the project should be easy to sell or refinance. 3

4 Financials: River House will benefit from a strong local market and advantageous financing, and thus should be in a strong financial position. We believe that these numbers are conservative estimates of our projected net profit. Please note that the following is prepared on a Generally Accepted Accounting Principles (GAAP) basis, and that the EBITDA line will reflect more closely actual net income. (All figures are in US Dollars). Residential Component 5-Year Annual Proforma: Profit and Loss Year Over Year Increase 0.0% 3.0% 3.0% 3.0% Rental Revenues (Fully Occupied) $3,128,40 $3,128,40 $3,222,499 $3,319,174 $3,418,749 $1,217,703 Vacancy Rate ** 25.0% 4.5% 4.5% 4.5% 4.5% Adjusted Rental Revenues $2,34,480 $2,987,939 $3,077,577 $3,19,904 $3,25,001 $14,84,901 Other Revenues Ancillary Income $9,00 $123,008 $12,98 $130,499 $134,414 $11,218 Garage Parking $50,400 $4,178 $,103 $8,08 $70,129 $318,89 Carport Parking $21,735 $27,77 $28,507 $29,32 $30,243 $137,524 Total Other Revenues $18,735 $214,82 $221,308 $227,947 $234,78 $1,07,38 Total Gross Revenues $2,515,215 $3,202,801 $3,298,885 $3,397,851 $3,499,787 $15,914,539 Cost of Goods Sold $11,454 $148,290 $152,738 $157,321 $12,040 $73,843 Gross Margin 95.37% 95.37% 95.37% 95.37% 95.37% 95.37% Operating Income $2,398,71 $3,054,511 $3,14,14 $3,240,531 $3,337,747 $15,177,9 Expenses Payroll $378,490 $401,31 $405,48 $409,704 $413,801 $2,009,273 Rent * $0 $0 $0 $0 $0 $0 Taxes Paid $144,25 $184,11 $189,8 $195,37 $201,238 $915,08 Advertising $5,341 $35,871 $3,230 $3,230 $3,230 $200,902 Benefits-Pensions $0 $0 $0 $0 $0 $0 Repairs $135,319 $172,311 $172,311 $172,311 $172,311 $824,51 Bad Debt $3,521 $4,484 $5,381 $,457 $7,748 $27,591 Other SG&A Exp. $358,59 $380,493 $384,298 $388,141 $392,022 $1,903,522 Total Operating Costs $1,07,84 $1,178,951 $1,193,553 $1,208,219 $1,223,350 $5,880,93 EBITDA $1,321,89 $1,875,50 $1,952,594 $2,032,312 $2,114,397 $9,29,70 Amort-Deprec-Depl $21,057 $275,121 $220,09 $17,077 $140,82 $1,028,213 Interest Expense $0 $0 $0 $0 $0 $0 Pre-Tax Net Profit $1,105,839 $1,00,440 $1,732,497 $1,85,235 $1,973,535 $8,28,547 Income Tax $442,33 $40,17 $92,999 $742,494 $789,414 $3,307,419 Net Income $3,504 $90,24 $1,039,498 $1,113,741 $1,184,121 $4,91,128 Profit Margin 2.38% 29.98% 31.51% 32.78% 33.83% 31.17% 4

5 Residential Component Proforma Summary Sales $2,515,215 $3,202,801 $3,298,885 $3,397,851 $3,499,787 $15,914,539 Operating Costs $1,07,84 $1,178,951 $1,193,553 $1,208,219 $1,223,350 $5,880,93 EBITDA $1,321,89 $1,875,50 $1,952,594 $2,032,312 $2,114,397 $9,29,70 Taxes, Interest, and Depreciation $21,057 $275,121 $220,09 $17,077 $140,82 $1,028,213 Net Profit $1,105,839 $1,00,440 $1,732,497 $1,85,235 $1,973,535 $8,28,547 Net Income $3,504 $90,24 $1,039,498 $1,113,741 $1,184,121 $4,91,128 * Rent Expense is zeroed out because it is Owner-Occupied. ** Year 1 Vacancy Rate at 25% which should allow for 3 full months to ramp up and find tenants to move in. Market in area is expected to be a weighted average of 5.1% and above for the higher-end properties. 5

6 Commercial Component 5-Year Annual Proforma: Profit and Loss Year Over Year Increase 0.0% 3.0% 3.0% 3.0% $1,170,00 $1,205,10 $1,241,2 Rental Revenues (Fully Occupied) $1,135,929 $1,135, $5,888,235 Vacancy Rate ** 25.0% 8.4% 8.4% 8.4% 8.4% Adjusted Rental Revenues $851,947 $1,040,899 $1,072,12 $1,104,29 0 $1,137,41 8 $5,20,80 Cost of Goods Sold $39,445 $48,194 $49,39 $51,129 $52,2 $241,09 Gross Margin 95.37% 95.37% 95.37% 95.37% 95.37% 95.37% Operating Income $812,502 $992,705 $1,022,48 $1,053,1 1 $1,084,75 $4,95,11 Expenses Payroll $198,027 $201,22 $205,55 $209,78 $213,93 $1,029,034 Rent * $0 $0 $0 $0 $0 $0 Taxes Paid $7,815 $82,85 $85,341 $87,901 $90,538 $414,452 Advertising $8,349 $5,100 $5,355 $5,355 $5,355 $29,51 Benefits-Pensions $10,479 $12,803 $13,187 $13,583 $13,990 $4,042 Repairs $28,370 $34,2 $34,2 $34,2 $34,2 $17,018 Bad Debt $1,193 $1,457 $1,749 $2,098 $2,518 $9,015 Other SG&A Exp. $17,0 $179,87 $183,45 $187,134 $190,877 $918,002 Total Operating Costs $490,892 $518,38 $529,414 $540,502 $551,904 $2,31,079 EBITDA $321,10 $474,338 $493,073 $512,59 $532,852 $2,334,532 Amort-Deprec-Depl $73,182 $89,413 $71,531 $57,224 $45,780 $337,130 Interest Expense $0 $0 $0 $0 $0 $0 Pre-Tax Net Profit $248,428 $384,924 $421,542 $455,435 $487,072 $1,997,402 Income Tax $99,371 $153,970 $18,17 $182,174 $194,829 $798,91 Net Income $149,057 $230,955 $252,925 $273,21 $292,243 $1,198,441 Profit Margin 17.50% 22.19% 23.59% 24.75% 25.9% 23.02% Commercial Component Proforma Summary $1,072,12 $1,104,29 0 Sales $851,947 $1,040,899 $1,137,41 8 $5,20,80 Operating Costs $490,892 $518,38 $529,414 $540,502 $551,904 $2,31,079 EBITDA $321,10 $474,338 $493,073 $512,59 $532,852 $2,334,532 Taxes, Interest, and Depreciation $73,182 $89,413 $71,531 $57,224 $45,780 $337,130 Net Profit $248,428 $384,924 $421,542 $455,435 $487,072 $1,997,402 Net Income $149,057 $230,955 $252,925 $273,21 $292,243 $1,198,441

7 General Disclaimers CONTINENTAL AMERICAS REGIONAL CENTER, LLC (CARC) WAS APPROVED AS A REGIONAL CENTER BY USCIS ON SEPTEMBER 9 TH, IN ACCORDANCE WITH THE REQUIREMENTS OF THE EB-5 PROGRAM, USCIS REQUIRES THAT INVESTORS MONEY BE AT-RISK, THUS PREVENTING CARC FROM GUARANTEEING THE EVENTUAL RETURN OF A PARTICIPANT S INVESTMENT, ANY FIXED RETURN IN THE INTERIM, OR EVENTUAL APPROVAL OF A PARTICIPANT S APPLICATION FOR US PERMANENT RESIDENT STATUS (A GREEN CARD ). THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER, WHICH WILL ONLY BE MADE TO QUALIFIED INVESTORS, AS DEFINED IN CARC S OFFERING DOCUMENTS. ADDITIONALLY, CARC RESERVES THE RIGHT TO CHANGE THE PRODUCTS NAMES, FEATURES, OR AMENITIES, ALL WITHOUT NOTICE TO PROSPECTIVE INVESTORS, TO THE EXTENT THAT IT BELIEVES SUCH CHANGES WILL NOT SUBSTANTIALLY IMPAIR THE ECONOMICS OF THE PROJECTS. MATERIAL IN THIS FLIER IS FOR INFORMATIONAL PURPOSES ONLY. Financial Disclaimers The above consolidated financial projections (the Financial Projections ) for the Company are based on forecasts of operating results (the Projected Period ) The Financial Projections should be read in conjunction with the Private Placement Memorandum. THE FINANCIAL PROJECTIONS HAVE BEEN PREPARED BY THE MANAGEMENT OF THE COMPANY. THE FINANCIAL PROJECTIONS WERE NOT PREPARED TO COMPLY WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS OR THE RULES AND REGULATIONS OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AND BY THEIR NATURE ARE NOT FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE COMPANY S INDEPENDENT ACCOUNTANTS HAVE NEITHER EXAMINED NOR COMPILED THE ACCOMPANYING FINANCIAL PROJECTIONS AND ACCORDINGLY DO NOT EXPRESS AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT TO THE FINANCIAL PROJECTIONS, ASSUME NO RESPONSIBILITY FOR THE FINANCIAL PROJECTIONS AND DISCLAIM ANY ASSOCIATION WITH THE FINANCIAL PROJECTIONS. MOREOVER, THE FINANCIAL PROJECTIONS CONTAIN CERTAIN STATEMENTS THAT ARE FORWARD- LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE ACT ). THESE FORWARD-LOOKING STATEMENTS ARE BASED UNDER THE ACT WHICH PROVIDES A "SAFE HARBOR" TO ENCOURAGE COMPANIES TO PROVIDE PROSPECTIVE INFORMATION ABOUT THEIR COMPANIES, SO LONG AS THOSE STATEMENTS ARE IDENTIFIED AS FORWARD-LOOKING AND ARE ACCOMPANIED BY MEANINGFUL, CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE STATEMENT. THE COMPANY DESIRES TO TAKE ADVANTAGE OF THE "SAFE HARBOR" PROVISIONS OF THE ACT. ANY STATEMENTS THAT EXPRESS OR INVOLVE DISCUSSIONS WITH RESPECT TO PREDICTIONS, EXPECTATIONS, BELIEFS, PLANS, PROJECTIONS, OBJECTIVES, GOALS, ASSUMPTIONS OR FUTURE EVENTS OR PERFORMANCE ARE NOT STATEMENTS OF HISTORICAL FACT AND MAY BE "FORWARD-LOOKING STATEMENTS." FORWARD-LOOKING STATEMENTS ARE BASED ON EXPECTATIONS, ESTIMATES AND PROJECTIONS AT THE TIME THE STATEMENTS ARE MADE THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY FROM THOSE PRESENTLY ANTICIPATED. FORWARD- LOOKING STATEMENTS IN THIS ACTION MAY BE IDENTIFIED THROUGH THE USE OF WORDS SUCH AS "PROJECTS", "FORESEE", "EXPECTS", "WILL," "ANTICIPATES," "ESTIMATES," "BELIEVES AND QUOTES," "UNDERSTANDS" OR THAT BY STATEMENTS INDICATING CERTAIN ACTIONS "MAY," "COULD," OR "MIGHT" OCCUR. ALTHOUGH THE COMPANY BELIEVES THAT THE INFORMATION IN SUCH FORWARD-LOOKING STATEMENTS IS REASONABLE AND RELIABLE, THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES THAT MAY CAUSE ACTUAL FUTURE ACTIVITIES AND RESULTS TO BE MATERIALLY DIFFERENT. BY MAKING THESE FORWARD-LOOKING STATEMENTS, THE COMPANY UNDERTAKES NO OBLIGATION TO DISCLOSE ANY REVISIONS TO THESE FORWARD LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE MADE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THE FINANCIAL PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY THE COMPANY, MAY NOT BE REALIZED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, INDUSTRY, REGULATORY, MARKET AND FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. THE COMPANY CAUTIONS THAT NO REPRESENTATIONS CAN BE MADE OR ARE MADE AS TO THE ACCURACY OF THE FINANCIAL PROJECTIONS OR TO THE COMPANY S ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS INEVITABLY WILL BE INCORRECT. MOREOVER, EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THESE FINANCIAL PROJECTIONS WERE PREPARED MAY BE DIFFERENT FROM THOSE ASSUMED, OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIALLY ADVERSE OR MATERIALLY BENEFICIAL MANNER. THE COMPANY DOES NOT INTEND AND DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE OR OTHERWISE REVISE THE FINANCIAL PROJECTIONS TO REFLECT EVENTS OR CIRCUMSTANCES EXISTING OR ARISING AFTER THE DATE OF THIS PROJECTION OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THEREFORE, THE FINANCIAL PROJECTIONS MAY NOT BE RELIED UPON AS A GUARANTEE OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR. 7