Post on 21-Jul-2015
Shark Tank
October 27, 2011
Indianapolis
- $30.5M of debt for $10M
- Developing 380 Units
Site History
Former apartment site, cleared and planned for 305 condominium units.
Halted in 2008.
Developer built all infrastructure, three buildings comprising 24 units, plus 20 boat slips and sales/amenity building.
Shark Tank
October 27, 2011
Location & Market Overview
In one of three luxury submarkets
One mile from Simon’s Fashion Mall and High End 86th Street Retail (Nordstrom/Saks/Tiffany, etc.)
Access to major employment centers
Infill Site
Metro unemployment better than state and national numbers
Best Public Schools
*Source: CBRE Indianapolis 2011 Market Update
Shark Tank
October 27, 2011
Project Overview
Existing 24 units will be converted to rental
Construction of 350-380 additional units as high-end rental apartments beginning in spring 2012
Controlled development pace
Expand sales building to be leasing and amenity center
Additional 9-acre parcel flexibility
Additional 20 boat slips approved
Sponsor Overview
Four principals who together have developed over 2,000 units valued at over $400 million.
Extensive experience in the Indianapolis urban and suburban markets.
Have closed four transactions in past year; one with Renaissance Bay lender already; plus $20M new development 5 miles north of the site
Have hard bids and budgets from other site in the market
Strong pipeline to show investor who wants to grow with us
Shark Tank
October 27, 2011
Shark Tank
October 27, 2011
Strengths
Good purchase price (total acquisition cost at less than a quarter of anticipated value: $10M / $45M); stable market; solid construction costs; entitled and prepared site.
Weaknesses
Current financial markets; project size; institutional investors attention to Indianapolis.
Opportunities
Additional parcel of land; additional slips and lake/river access.
Threats
Two other projects currently in entitlements; future interest rate risk.
Shark Tank
Deal Economics
October 27, 2011
Untrended TrendedTotal Revenue $5,380,000 $6,055,000Total Expenses $1,950,000 $2,195,000Net Operating Income $3,430,000 $3,860,000 Unleveraged Return 8.22% 9.26% Debt Coverage Ratio 1.22x 1.31x Interest Coverage Ratio 1.44x 1.55x Loan-to-Value Ratio 75.0% 75.0% Stabilized Cash on Cash 10.9% 24.3%Cap Rate on Sale 6.75% 7.25%
Sources Debt Financing $29,800,000 Land Sale $1,000,000Investor $12,800,000 Total Sources $42,600,000
Uses Land Purchase Price $10,000,000 Construction Costs $24,400,000 Soft/Finance Costs $8,200,000Total Uses $42,600,000
Investment Committee Request
•Limited Partner equity commitment up to $15M
•8% preferred return
•Waterfall schedule:
• 80/20 at 8%
• 60/40 at 16%
•3.50% Development Fee
Shark Tank
October 27, 2011
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78th STREET
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