N Catalina - Redondo Beach Transaction Summary PROJECT AND MARKET OVERVIEW

Transcription

1 Transaction Summary PROJECT AND MARKET OVERVIEW PROJECT OVERVIEW MARKET STATISTICS (2018) Address N Catalina - Redondo Beach Submarket Comparables SF $/PSF Sale Price Property Type For Sale Condos Market Avg 2,214 SF $754 $1,670,000 Total Land Area (Acres) 1.22 Market High 3,158 SF $600 $1,895,000 Total Land Area (SF) 55,350 Market Low 1,354 SF $1,326 $1,795,000 Programming Units/SF Avg SF/Unit Gross SF Residential ,687 Direct Comps Avg 2,214 SF $754 $1,670,000 ` Retail 15,000 Pro-Forma Avg 1,723 SF $809 $1,421,296 Project Timeline Start End Months Premium / (Discount) -491 SF $54 -$248,704 Acquisition Nov-18 Permits/Entitlement Nov-18 Feb Months Retail Comps Construction Feb-20 May Months Pre-Sale Mar-21 May-21 2 Months Total 30 Months SOURCES AND USES (ACQUISITION & PREDEV) SOURCES $/Unit $/SF Total $ USES $/Unit $/SF Total $ Sources Uses Land Loan $266,667 $120 $8,000,000 Land Acquisition $408,333 $184 $12,250,000 Equity $296,977 $134 $8,909,305 Predevelopment Costs $74,935 $34 $2,248,055 Environmental Remediation $50,000 $22 $1,500,000 Financing Costs $22,792 $10 $683,750 Closing Costs $7,583 $3 $227,500 Total Sources $563,643 $254 $16,909,305 Total Uses $563,643 $254 $16,909,305 SOURCES AND USES (TOTAL PROJECT COSTS) SOURCES $/Unit $/SF Total $ USES $/Unit $/SF Total $ Sources Uses Construction Loan $895,046 $403 $26,851,386 Land $408,333 $184 $12,250,000 Equity $408,878 $184 $12,266,340 Hard Costs $528,703 $238 $15,861,102 Soft Costs $366,887 $165 $11,006,624 Total Sources $1,303,924 $757 $39,117,726 Total Uses $1,303,924 $587 $39,117,726 DISPOSTION & RETURNS ANALYSIS DISPOSITION $/Unit $/SF Total $ PROJECT LEVEL RETURNS $/Unit $/SF Total $ Total Sale Proceeds $1,704,799 $990 $51,143,969 Net Proceeds $22,434,208 Cost of Sale -$61,946 -$36 -$1,858,375 Total Equity Investment $12,266,340 Total Costs -$1,303,924 -$757 -$39,117,726 Equity Multiple 1.83x Net Profit $338,929 $197 $10,167,869 IRR 30.8% ROI 82.9% Margin 26.0% EQUITY SUMMARY FINANCING SUMMARY Total Profit IRR ROI Lender TBD JV Equity Partner - Class A 80.0% $9,813,072 $6,388, % 63.9% Total Loan -$26,851,386 Beach City Capital - Class B 10.0% $1,226,634 $903, % 73.6% Loan to Cost 70% Beach City Capital - Class C 10.0% $1,226,634 $1,232, % 100.4% Term 30 months Equity Partners 100.0% $12,266,340 $8,523, % 69.5% Rate 7.50% Developer Promote $1,644,493 Rate Type Floating Total Profit $10,167,869 Recourse Recourse

2 Project Start Date: 11/1/2018 Pro Forma - Return On Investment Time Frame 30 New Units 30 Months SF\ of Retail 15,000 Building Type: Lot 1 Area 35,230 3 Levels of Type V Lot 2 Area 20,120 Total Area 55,350 Existing Units 5 Existing SF 25,350 Lots 14 Investment Period 30 Months Potential Gross Sells $51,143,969 Commission Costs 3.5% -$1,790,039 Closing Costs 1.0% -$511,440 Rental Income $443,104 Effective Gross Income $49,285,594 Development Costs -$39,117,726 Debt Service 7.50% $26,851,386 -$26,851,386 Net Cash Flow -$12,266,340 $22,434,208 Project Level Returns Leveraged Internal Rate of Return (IRR) 30.8% Equity Multiple 1.83 Project ROI 82.9% Margin 26.0% Equity Used -$12,266,340 Proceeds $22,434,208 Note* Please find attached Equity Waterfall Structure Profit $10,167,869 Master Schedule 11/1/2018 2/1/2020 5/4/2021

3 Development Costs / Capital Structure Building Structure (SF) 65,094 Acquisition + Predev Construction Project Total PSF Total PSF Total PSF Total Land Cost $188 $12,250,000 $0 $0 $188 $12,250,000 Construction Costs $0 $0 $244 $15,861,102 $244 $15,861,102 Soft Costs $19 $1,263,389 $28 $1,843,846 $48 $3,107,235 Site Remediation $23 $1,500,000 $0 $0 $23 $1,500,000 Development Fee 3.0% $7 $452,128 $7 $484,422 $14 $936,550 Project Contingency 5.0% $2 $147,050 $12 $801,367 $15 $948,417 Total Costs - Land, HC + SC - Less Interest, Bank Fees $240 $15,612,566 $292 $18,990,737 $532 $34,603,304 Other Costs Guarantee Fee $0 $0 $8 $537,028 $8 $537,028 Extended Escrow Interest Payments $0 $15,000 $0 $0 $0 $15,000 Bank Costs Closing Costs $3 $227,500 $10 $671,285 $14 $898,785 Land Interest Reserve $10 $668,750 $0 $0 $10 $668,750 Construction Interest Reserve $0 $0 $25 $1,636,256 $25 $1,636,256 TOTAL LAND, CONSTRUCTION, AND SOFT COSTS $254 $16,523,816 $335 $21,835,306 $589 $38,359,122 Loan Proceeds 70% -$8,000,000 -$18,851,386 -$26,851,386 Subtotal Equity Needed $8,523,816 $2,983,920 $11,507,737 Additional Requirements Project Formation $3 $187,506 $3 $187,506 $6 $375,012 Equity Reserve $197,983 $185,609 $6 $383,591 Total Equity Required $137 $8,909,305 $52 $3,357,035 $188 $12,266,340 Total Required Equity $8,909,305 $3,357,035 $12,266,340 Equity Contributions JV Equity Partner 80% $9,813,072 Beach City Capital 20% $2,453,268 Total Project Equity 100% $12,266,340 Total Capital Required $16,909,305 $22,208,421 $601 $39,117,726

4 Current Market Comps 1/21/2019 Link to Comps $ 650 Product Type, Sales and Cash Flow 2% Per Yr (30 mo period) 5.0% $ 683 Town Homes 30 Projected Market Sales $ 683 Lot 1 Area 35,230 Sales Floor 1,575,000 Lot 2 Area 20,120 Sale Ceiling (Cap) 1,895,000 Lot Area 55,350 Average Comp Sales Per Unit 1,670,000 Allowable Units Per Zoning 2,490 sf/unit Average Projected Project Sales Per Unit 1,421,296 Per Zoning State Density Bonus (SB1818) provides units FAR Calcs Rounded Up Per Code section units Lot Size 55,350 sf Affordable Units Required 2.42 Less Setbacks 20% Rounded Up Per Code section 3.00 units Buildable Area 44,280 sf check 2 to 1 Ratio 88,560 sf Unit Calculation Per Lot Allowable FAR 88,560 sf Lot 1 35, units Lot 2 20, units Retail Provided 15, total Resi + Circulation 57,608 FAR Provided 72,608 sf Pro Forma - Under Market Afforable Gap Pro Forma Sales Input Unit Type Units SF Per Unit Sells PSF Sells Per Unit Total Sells N Catalina - Redondo Beach 1BR Flats 100% ,000 1,800,000 2BR Flats ,000 2,400, BR Townhomes - A 19 1, ,625,000 30,875, BR Townhomes - B 2 2, ,650,000 3,300, BR Townhomes - A Affordable 1 1, ,189, ,135 1,189,865 2BR Flats- Affordable , , ,848 1BR Flats- Affordable , , ,256 Totals/Averages 30 1, ,421,296 Total Resi SF 50,094 Renovated Retail Sf 15,000 Monthly Rent Yearly Rent , ,000 Retail Sale PSF Cap 5.00% Value 10,620, ,620,000 Retail Income Before Sale 6 265,500 Total Proceeds $ 51,143,969 Project Margin MG 26.0% Project Level IRR 30.8% Pro forma -Total Proceeds $ 51,143,969 Project Level EM 1.83 X Profit $ 10,167,869

5 Equity Return On Investment - Waterfall Structure Partners Contribution Equity JV Equity Partner - Class A 80% $9,813,072 Beach City Capital - Class B 10% $1,226,634 Beach City Capital - Class C 10% $1,226,634 Totals 100% $12,266,340 Tier Structure Contribution Pref Distribution Profit Split Distribution Total Return IRR ROI Cash on Cash (Annual) EM JV Equity Partner - Class A $9,813,072 $1,454,750 $4,933,479 $6,388, % 63.9% 39.7% 1.64 Time Frame B (26 months) $6,456,037 $1,119,046 $3,245,744 $4,364, % 67.6% 31.2% 1.68 Time Frame C (15 months) $3,357,035 $335,704 $1,687,735 $2,023, % 60.3% 48.2% 1.60 Beach City Capital - Class B $1,226,634 $245,327 $657,797 $903, % 73.6% 29.5% 1.74 Time Frame A (30 months) $1,226,634 $245,327 $657,797 $903, % 73.6% 29.5% 1.74 Beach City Capital - Class C $1,226,634 $245,327 $986,696 $1,232, % 100.4% 40.2% 2.00 Time Frame A (30 months) $1,226,634 $245,327 $986,696 $1,232, % 100.4% 40.2% 2.00 Developer Promote $1,644,493 $1,644,493 Totals $12,266,340 $1,945,403 $8,222,465 $10,167,869 $ 22,434,208 Additional Detail Below Project Time Frame 11/1/2018 2/1/2020 5/4/2021 Total Investment Period 30 Months Time Frame A 11/1/2018 5/4/2021 5/4/2021 Project Start 30 Months Time Frame B 3/3/2019 5/4/2021 5/4/2021 Acquisition + Entitlements 26 Months Time Frame C 2/1/2020 5/4/2021 5/4/2021 Construction 15 Months