Post on 11-Jul-2020
Retreat at Stone Mountain
Disclaimer
The information contained in this overview and initial plan is
considered confidential and is solely for the use of prospective
investors to determine the level of interest in the Retreat at
Stone Mountain apartment complex located in Atlanta, GA.
While the information contained in this overview, plan and
model has been compiled from various sources, and we believe
it to be reliable based on the data used but neither Ben Suttles,
Feras Moussa, or Mark Kenney or its representatives make any
representation or warranties as to the accuracy or
completeness herein. All financial information and projections
are provided for reference only and are based on assumptions
relating to the general economy, market conditions, and other
factors beyond our control. All prospective investors are
encouraged to conduct their own independent due diligence
investigation, review, financial projections, and consult with their
legal, tax, and other professional advisors before making an
investment decision.
Meeting Agenda
• Executive Summary
• Market Overview
• Property Characteristics
• Business Plan
• Next Steps
• Q&A
Sponsor Team
Ben Suttles
Managing Member
Feras Moussa
Managing Member
Mark Kenney
Managing Member
Ben is an entrepreneur having owned half a
dozen companies with revenues at $10MM per
year. He has helped syndicate 5 multifamily
projects, totaling close to 800 doors and a
$40MM portfolio value. He recently sold his first
syndication for over a 300% return in less than
two and half years, and has raised over $10MM
in his career for various real estate projects.
Feras is a serial entrepreneur with a tech
background. Feras formerly worked as a
Program Manager at Microsoft, and is now
focused on Multi-Family investing. Feras owns
and manages a rental portfolio of 4-plexs,
single-family homes, and multiple condos, and
has closed over 500 units and $25MM in
Multifamily acquisitions.
Mark has a passion for real estate and has
been investing in real estate for over 20
years and currently owns over 4000 units.
Mark purchased his first real estate property
when he was 23 years old. He has also
raised millions of dollars to purchase
properties.
Sponsor Team
Josh Benporat
Co-Sponsor
David Gerber
Co-Sponsor
Juan Vargas
Co-Sponsor
Josh grew up in Dallas, however after making the
move to Houston in 2012 he proudly calls this city his
home. Josh has over a decade of experience in sales
and is a licensed attorney in the state of Texas. After
discovering his passion for commercial real estate
two years ago he shifted his focus to multifamily
investing and the rest is history.
With more than 25 years experience in financial services,
David was constantly surprised how many clients and
colleagues limited their portfolios to stocks, bonds, and
cash. Too many failed to diversify sufficiently into direct
real estate. For good reason! Even passive investments
require a lot of upfront due diligence, even if you can
access deals. David founded Cove Investments to help
individual investors access direct, passive real estate
opportunities, with taxable funds or in their retirement
accounts!
Juan has been actively engaged in all aspects of
real estate sales, investment, management,
financing and construction for more than ten years.
He is a licensed commercial agent and has
experience with residential as well as multi-
residential, including owning 4 single family homes
and owning and operating a 32 unit multifamily
property in the Houston MSA. He is a KP in 90
multifamily units in Atlanta and has also invested
passively in 321 multifamily units. Juan was raised
with strong family values and is known for his
unique ability to uncover apartment investment
deals with value add potential.
16%+
Average Annualized Returns
~100%
6 Year Return
$950k
Capex Improvements
Executive Summary
Location Management High-Demand
North ATL location which allows
residents to enjoy easy access to
I-285 (204,000 vehicles per day),
which facilitates quick commutes
to major metro employers.
Out of State institutional
owners who had “hands off”
management style. Provence
managed deal across the
street for years
Current rents are low
$0.70s/ft. Underwritten
at $0.82/ft. While
Market average is high
$0.80s/ft and into the
90’s.
Why Atlanta and Retreat at Stone Mountain
• Built in 1983, Retreat at Stone Mountain apartments feature quality construction elements
including pitched roofs, covered exterior breezeways, washer/dryer connections, and low-
maintenance brick and vinyl exteriors.
• Nearby competitors of similar age receive average rents that are $175 to $300 higher than
Retreat at Stone Mountain’s average market rent.
• Atlanta is expected to add 43,200 jobs in the next twelve months. MPF’s forecast calls for
increases in organic rent growth of +3.3% over the next year
• Home to nearly 5.9 million residents, Metro Atlanta is the largest metro in Georgia and the
ninth-largest metro area in the United States.
• Greater Atlanta’s population is forecast to grow 9.6% over the next five year’s surpassing
6.4 million residents
Market Overview
The Atlanta Metropolitan Statistical Area’s
total population now exceeds 5.9 million
people and has grown 79% since 1990,
making it the nation’s ninth-largest MSA and
one of its fastest growing.
• Atlanta is expected to add 43,200 jobs in
the next twelve months.
• Top 5 projected job growth metro through
2020.
• The massive 29-county region is also
home to 15 Fortune 500 companies, 66
institutions of higher learning, and the
busiest airport in the world in terms of
annual passengers.
Apartment Market Overview
SUBMARKET OVERVIEW
• Retreat is located within one of the top
performing submarkets in the Atlanta MSA.
• The Stone Mountain submarket saw a 5.5%
annual rent growth in Q2 2018. This rent
growth is a result of no new supply in the
area and the submarket’s proximity to
Atlanta.
• Supply-demand imbalance fuels submarket
fundamentals, bolstering property
performance trends and indicating strong
future organic growth
Year 1 projections are $916/unit
Nearby Entertainment
Stone Mountain Park - Its centerpiece is the
world’s largest exposed piece of granite and is
the number one tourist attraction in Georgia.
Visitors can travel to the summit and explore
the park’s 3,200 acres of lakes and woodlands
which features, boat rides, adventure and
climbing areas, plantation, Civil War museum,
laser show, and carillon.
Northlake Mall - 1.0 million SF is anchored by
Macy’s, Sears, and JCPenney, and also has more
than 100 other retailers.
The Fernbank Museum of Natural History- 8
million dollar exhibit which includes dinosaur
skeletons and an IMAX theater.
East Lake Golf Club - a private golf club that is the
oldest golf courses in the city of Atlanta.
North Dekalb Mall - is a 635,000 SF center of
shopping, dining, and entertainment destinations.
Wade-Walker- is DeKalb’s largest park and
recreational facility. The park features baseball,
softball, soccer, tennis, as well as street hockey. The
park also provides a swimming pool, playgrounds,
picnic areas, pavilions, a lake, and walking trails.
Nearby Entertainment
Stone Mountain Park Northlake Mall East Lake Golf Club
Retreat at Stone Mountain
Nearby Employers
Marta Rail
DECATUR
MIDTOWN
Emory University and CDC HQ
GSU Perimeter
College
Memorial Bend
H a m b r i c k R o a d
Retreat at Stone Mountain
Property Summary
1983
212
238,140
1,123
19.7
95%
400 Ashley Place,
Stone Mountain, GA
30083 Address
Year Built
Units
Total SF
Avg Unit Size
Land Size (acres):
Physical Occupancy
• Negotiated off market. Purchased at less than $67k/door.
• Property is well kept, but not well managed. There is both a
management and value-add play.
• 1983-built asset features desirable construction features
including brick and pitched roofs.
• The asset features 100% two-and three-bedroom spacious
roommate-style floorplans (averaging 1,123 SF).
• Market-supported organic rent increase based on rent comp set.
• Had 6 fire units recently, these were rehabbed nicely and were
quickly leased up for a $100 premium
• Property next door is a 100% replica of property, same builder.
Next door property has rents in the $0.90s/ft.
• 100%+ total return in 6 years, on conservative underwriting,
with 8 pref and 75/25 split.
Highlights
Floor Plans
T WO BEDROOM / O N E BATH GARDEN 1,029 Square Feet
T WO BEDROOM / T WO BATH GARDEN 1,058 Square Feet
T WO BEDROOM / T WO BATH GARDEN 1,096 Square Feet
Floor Plans
THREE BEDROOM / TWO BATH G AR DEN 1,278 Square Feet
THREE BEDROOM / TWO BATH G AR DEN 1,310 Square Feet
Property Characteristics- Interiors
Upgraded unit
Property Characteristics - Interiors
Classic Unit
Property Characteristics- Exteriors
Property Characteristics - Exteriors
Property Amenities
• Swimming Pool
• Gated Access
• Office
• Two Playgrounds
• Picnic Areas
• Sport Court
• Washer/Dryer Connections in all units
Property Amenities
The Opportunity Loan Type
Traditional Agency Debt
(Fannie Mae)
Hunt Mortgage – sponsors
have other properties with the
same lender
30 year amortization
# Units 212
Purchase Price $14,200,000
Price/Unit $66,981
Earnest Money $200,000
1st Mortgage $9,800,000
Mortgage Terms 10 year
Interest Rate ~4.40%
Interest Only 4 Years
Rehab Budget ~$950,000
Acquisition Fee 2%
Reserves/Additional
Rehab $100,000
Total Needed to Close $6,025,000
9-10%+ cash flow throughout the hold
100%+ total return in 6 years
Investment Projections
~16%+ average annualized return
Rent Comps
$917 $990
$1,055 $1,000
$1,065
$795
$0
$200
$400
$600
$800
$1,000
$1,200
The Haverly
at StoneMountain
(1308 sf)
Polo Club
(1,094 sf)
Wildwood at
StoneMountain
(1,060 sf)
The Life at
Clifton Glen(1,200 sf)
The Pointe
(1,055 sf)
Sterling
Chase(1,096 sf)
Two Bedrooms
$1,163
$1,070 $1,100
$1,275
$870
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Polo Club
(1,300 sf)
Wildwood at
Stone Mountain(1,274 sf)
The Life at
Clifton Glen(1,500 sf)
The Pointe
(1,255 sf)
Sterling Chase
(1,310 sf)
Three Bedrooms
~$280 delta on average ~$210 delta on average
Sales Comparables
Property Name
Sale
Date
Units
Year
Built
Price
Price per
Unit
Address
City
Subj. Retreat at Stone
Mountain
- 212 1983 $14,200,000 $66,981 400 Ashley Place Stone Mountain, GA
1 Stanford Oaks Aug-18 202 1968 $19,000,000 $94,257 2035 Idlewood Road Tucker, GA
2 Rainbow Forest Aug-18 156 1972 $11,500,000 $73,718 3100 Rainbow Forest Circle Decatur, GA
3 Clifton Glen Jul-18 556 1972 $40,866,000 $73,500 500 Hambrick Road Stone Mountain, GA
4 Summit Grove Jun-18 64 1966 $4,800,000 $75,391 2340 Lawrenceville Highway Decatur, GA
5 Villas of Embry Hills Jun-18 124 1964 $12,000,000 $67,643 3317 Chamblee Tucker Road Atlanta, GA
6 Heritage Reserve Feb-18 210 1989 $14,200,000 $67,643 10 Creste Drive Decatur, GA
7 Azalea Ridge Jan-18 281 1969 $19,100,000 $68,000 3214 Valley Bluff Drive Doraville, GA
8 Cambridge Heights Dec-17 132 1989 $8,950,000 $67,803 6136 Hillandale Drive Lithonia, GA
9 Sonoma Ridge Nov-17 440 1986 $39,300,000 $89,318 4659 Dawson Boulevard Atlanta, GA
10 The Arbors Sep-17 140 1987 $12,300,000 $87,500 100 Arbor Circle Tucker, GA
11 Grove Mountain Park Apr-17 268 1989 $21,600,000 $80,637 1900 Glenn Club Drive Stone Mountain, GA
12 Lavista Crossing Jan-17 240 1969 $22,700,000 $94,688 3797 Lavista Road Tucker, GA
Total/Average 2,813 $226,316,000 $80,454
Management Professional Property Management – currently manage 8,000+ units in SE, with the majority in the ATL MSA; managed The Life at Clifton Glen, across the street, for several years until July 2018
Capex $950,000 in improvements to interiors and exteriors, and addition of various amenities, including paint, roofs, update office, and upgrade 100-150 units.
Property Improvements Improve signage of the property to give a modern feel, add new amenities such as a dog park and functional office/clubhouse, new pool furniture and establish clean, quality housing.
Business Plan
Increase NOI, Reduce Expenses Update strategic units, move rents to market and reduce expenses
Professional Management-
• Current owners are out of state & institutional and take a very “hands off”
style of ownership and management
• Provence Real Estate will manage the property for us upon takeover
• Provence currently manages 8000+ units total, & manage 900+ units for us
in Atlanta
• Toured the property, conducted lease audits, reviewed budgets and
projections
Estimated Rehab Budget Rehab
Roofs $150,000
Exterior Improvements $150,000
Dog Park/Pergola/BBQ Pits $25,000
Gate Repairs $15,000
Landscaping/Signage/Fencing $90,000
Interior upgrades $415,000
Total: ~$950,000
Rehab
Office/Clubhouse/Pool $25,000
Solar Screens $40,000
Other $40,000
Increase NOI
• Bring rents to market – High renter demand & limited supply
• Professional Property Management with years of experience in this pocket
• Update units to better standard in order to push rents to a premium
• Add amenities to attract premium rents and improve property look & feel
• Tighter management control of the asset helping streamline expenses
Proforma Table
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Gross Rents $2,342,280 $2,412,548 $2,484,925 $2,534,623 $2,585,316 $2,637,022
Economic
Vacancy $421,610 $265,380 $273,341 $278,808 $284,385 $290,072
Other Income $231,000 $237,930 $245,068 $249,969 $254,969 $260,068
Net Income $2,151,670 $2,385,098 $2,456,651 $2,505,784 $2,555,900 $2,607,018
Operating
Expenses $1,088,000 $1,120,640 $1,154,259 $1,177,344 $1,200,891 $1,224,909
Capex
Reserves $53,000 $53,000 $53,000 $53,000 $53,000 $53,000
Net Operating
Income $1,010,670 $1,211,458 $1,249,392 $1,275,440 $1,302,008 $1,329,109
Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Rent Growth 3% 3% 2% 2% 2%
Expenses Growth 3% 3% 2% 2% 2%
Economic Vacancy 18% 11% 11% 11% 11% 11%
Projected Investor Return
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Before Tax Cash Flow $531,628 $678,401 $704,818 $722,957 $589,833 $608,706
Cash on Cash Return 8.77% 11.21% 11.67% 11.98% 9.80% 10.13%
Total Return 32.53% 50.74% 67.21% 84.15% 101.61%
Average Annualized Return 8.77% 16.27% 16.91% 16.80% 16.83% 16.93%
Average Annualized Return 9.98% 10.53% 16.59% 16.60% 16.70% Sample Investment
($100,000) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Cash-on-Cash Return $8,772 $11,213 $11,669 $11,983 $9,800 $10,126
Cumulative Cash-on-Cash $8,772 $19,985 $31,654 $43,637 $53,437 $63,563
Equity Gain on Sale - - - - - $38,046
Return of Capital - - - - - $100,000
Total Return $8,772 $19,985 $31,654 $43,637 $53,437 $201,609
All numbers below are net returns to investors – Net of Debt Service, 1.5% Asset Management Fee and 20% Sponsor Compensation
7% Exit Cap.
~15% total IRR
Post Acquisition Expectations
Monthly Reports Investors will receive a monthly report with highlights and financials
Quarterly Distributions Investors should expect distributions quarterly, starting at 6 months after acquisition
Communication Sponsorship team will keep communication channels open and communicate the good and bad
Next Steps
1. Review and complete Investment Packet, to be sent out February 4th
2. Sponsors review and accept investment packet
3. Wire investment to banking instructions prior to February 20th
The investment packet contains the Offering documents (PPM, Subscription Agreement, etc.).
Open to both sophisticated and accredited investors
Investments will be accepted on a first come first serve basis on the completion and
delivery of the offering documents, as well as wiring of funds.
Minimum Investment - $75,000
Will accept IRA Funds
Q&A
Have questions? Feel free to ask.