Virtua - versantcre.com · virtua high growth is a fund of virtua partners offered by virtua high...

VirtuaHIGH GROWTH FUND II

AN OPPORTUNISTIC COMMERCIAL REAL ESTATE INVESTMENT FUND

VIRTUA HIGH GROWTH IS A FUND OF VIRTUA PARTNERS

OFFERED BY VERSANT COMMERCIAL BROKERAGE, INC.Matt Mueller, President619.764.9640 [email protected]


OFFERED BY


VERSANT COMMERCIAL BROKERAGE, INC.Matt Mueller, President619.764.9640 [email protected]

The Virtua High Growth Fund II (“VHGFII” or “The Fund”) is a real

estate investment fund for investors looking to achieve compelling

rates of capital appreciation through value add investments in

commercial real estate. Many investors lost substantial capital in the

global financial crisis. The fund is designed to recoup capital lost

through the following strategies: (right column)

• Purchasing tenant-in-common (TIC) interests from investors looking to exit

• Offering liquidity to the TIC and fractional interest marketplace

• Investing in opportunistic devel-opment and value add projects

• Recapitalizing underperforming assets

• Providing superior management services through affiliates

• Infusing rescue capital into select high-growth investments

INVESTMENT SNAPSHOT

Target ROI

Return Incentive Split

Projected Period

Min. Investment

Offering Amount

Annual Mgmt Fee

30%+ Annual 15% Preference to Capital then 50/50

Three Years $25,000 $10,000,000

2%


INTRODUCTION

The predecessor to VHGFII is the Virtua High Growth Fund (VHGF).

VHGF started raising capital in February, 2015, and closed to new

investors in July of 2015. VHGF has made fourteen investments in a

variety of properties. Three of those investments have been realized

with an average internal rate of return of 123%, prior to expenses.

eleven of the investments remain outstanding. VHGF Manager (the

“Fund Manager”) expects to exceed targeted returns for VHGF. The

investment cycle for VHGF is expected to run for another 24 months.

Due to the large number of TIC loans maturing in 2016 and

2017, the Fund Manager is raising VHGFII now in order to take

advantage of this opportunity. In addition, there are other value

add and development transactions that are currently available.

Versant Commercial Brokerage, Inc. will serve as the funds Real

Estate Investment Advisor, and VHGF Manager, LLC (Quinn

Palomino) will serve as the funds Managing Member. The work of

the Managing Member and investment Management Company

is highly specialized. They have lengthy experience, extensive

research and monitoring capabilities, and developed programs and

systems to assist in identifying and underwriting of each project. The

systems they have developed are proprietary. The Fund’s overriding

goal is to build wealth through capital appreciation.

INVESTMENT STRATEGIES


OFFERED BY





The Fund will invest in commercial real estate, primarily in tenant-in-

common, fractional ownership, distressed properties, development,

under-performing and value-add opportunities. The goal is to achieve

superior returns and significant capital appreciation through the

following strategies:

• Purchasing tenant-in-common (TIC) interests from investors

looking to exit:

Many investors are looking to sell their TIC investments. Most of

these investors had unpleasant experiences with their TIC sponsors,

including excessive fees, bad management, poor communication,

and fraud. Other owners, after holding the investment for seven to ten

years, find themselves looking to exit their investment for a variety of

reasons, including deal fatigue, change of goals, health issues, family

considerations, profit realization, portfolio rebalancing, or simply a need

for cash. These sellers present excellent buying opportunities at low

current prices. The fund manager, with its deep TIC experience, can

capitalize on such opportunities for the benefit of the fund investors.

• Offering liquidity to the TIC and fractional interest marketplace:

TIC owners looking to exit their investment have few opportunities to

sell. There is no reliable clearing house to buy and sell TIC interests.

In addition, individual investors have difficulty complying with securities

regulations and transfer restrictions when they go to sell their TIC

interest. This lack of liquidity and absence of a market maker provides

an opportunity for the investors of VHGFII. The Fund aims to create

a marketplace for TIC owners to buy and sell their interests. VHGFII

investors benefit from a pipeline of opportunities, motivated sellers, and

excellent buy-side pricing for the fund. The Fund plans to purchase

these positions at below-market prices with attractive ‘’liquidity

discounts”.

VHGF RECENT INVESTMENTS

Anchored by credit tenants such as ADP and Carl Zeiss the project is well positioned to achieve leasing and valuation targets. Britannia provided VHGF an excellent opportunity to buy significantly below market price.

Britannia Business CenterPleasanton, CA

Square Feet

Built

Parking

291,591

1997

4:1000


OFFERED BY




• Recapitalizing underperforming assets:

Often TIC properties fall into disrepair when there is not enough

money for capital expenses. Many TIC properties need new capital

for tenant improvements and leasing commissions. The Fund will

identify properties in need of a cash infusion. With strong management

and adequate capital, these properties are positioned to improve

dramatically. VHGFII is designed to invest in these opportunities.

• Opportunistic Investments:

As an active participant in many submarkets, Versant becomes

aware of opportunities to purchase real property -- that can then be

repositioned or developed. Many of these opportunities are related

to an existing project. For example, a building adjacent to an existing

Virtua sponsored building is substantially under parked and can’t lease

up. By acquiring this property and providing additional parking, the

property value is increased dramatically (existing investors have first

right to invest). Another example is when an existing investment group

needs to expand geographically via development; this provides an

opportunity to acquire and master plan a larger parcel while lowering

development risk.

• Providing superior management services through affiliates:

Many properties are burdened with grossly excessive fees and

expenses. Reducing fees and expenses provides an immediate lift

to net operating income and the value of a property. It is important to

align a project with excellent property level management. Effective

operators must be proactive in order to maintain competitive costs. The

Fund sponsor and affiliated companies have experience in reducing

expenses on TIC properties. VHGFII seeks to identify assets that need

improved property-level operations.



This mixed-use business park offers a superb location as a one-story, flex office building currently 100% occupied by two long term, investment grade tenants, Progressive Casualty Insurance and Waste Management, Inc.

Met Center 15Austin, TX

Square Feet

Acres

Built

Parking

257,600

26.83

2001

5:1000


OFFERED BY




• Infusing rescue capital to select high growth investment:

VHGFII will provide rescue capital for properties with poorly timed lease

expirations or upcoming loan maturities. These opportunities provide

exceptional risk adjusted returns. The rescue capital will facilitate

leasing, which will improve the value of the investment.



This Class A Office was renovated in 2006 and is located in a high visibility location on Reed Hartman Hwy in highly desirable Blue Ash submarket north of Cincinnati’s CBD, with many convenient amenities nearby.

Northmark II Office BuildingCincinnatti, OH

Square Feet

Acres

Built

Parking

Spaces

103,400

2.37

1984

3.5:1000

361


OFFERED BY




HIGHLIGHTS

• Diversification:

The Fund will reduce risk by investing across many different markets

and product lines.

• High Returns:

Targeted annual return on investment is projected to be over 30%.

• Experience:

Managed and advised by professionals with more than 30 years of

commercial real estate and TIC investment experience.

• Market Timing:

Investments will generally be made in improving markets. Most

investments are short to medium term to avoid dependency on

market cycles.

• Value Creation:

The Fund and its related companies will provide value add services

in order to obtain targeted returns.

• Barriers to entry:

The TIC restructuring and secondary sales market is byzantine and

entry is difficult. However, the market is extremely inefficient which

allows for higher investor returns.


Class A Office with cafeteria, featuring CIGNA is main tenant, with structured parking, large atrium and 24/7 security guard; located in an exceptional sub-market of Eden Prairie with high growth potential.

One Southwest CrossingEden Prairie, MN

Square Feet

Acres

Parking

239,119

8.3

5:1000


OFFERED BY




The Fund offers 100% transparency and believes that TRUST is the

most important part of its commitment to investors. The Fund’s

commitment to superior returns is only equaled by its commitment

to solid long term relationships with investors.

• One of the only investment vehicles available to capitalize on the

TIC and fractional ownership CRE opportunities.

• An experienced Managing Member and Investment Management

Company with proven commercial real estate experience in multiple

and volatile market cycles.

• An opportunity to diversify your portfolio into real, tangible assets.

• An opportunity to diversify the aggressive portion of your portfolio

across multiple properties, thus, reducing risk and increasing returns.

• Secure a discounted price basis on commercial real estate.

HIGHLIGHTS


The Hampton Inn offers a 5-story Hilton branded Hampton Inn Hotel, fitness facility, and daily breakfast offerings; located in an exceptional sub-market of Philadelphia.

Plymouth Meeting Hampton InnPlymouth Meeting, PA

Square Feet

Acres

Built

Rooms

Parking Spaces

97,237

3.99

1998

136

361


OFFERED BY




EXIT STRATEGIES

Versant will review each investment and identify multiple exit

strategies to reduce risk. These strategies include, but are not

limited to:

1. Asset Sales: Through on market, listed investment property sales.

2. Refinance: Of stabilized assets can provide return of capital.

3. Partial Interest Sales: Versant has a network of investors looking

to purchase stabilized partial interests.

4. Fixed Income: Versant has a network of investment advisors

looking for fixed income opportunities to purchase the stabilized

assets or investment piece. This includes hedge funds, private

equity, insurance companies, broker-dealers, and family offices.

5. Other Funds: The team has a network of other stabilized income

funds which provide liquidity for each property investment.


Patchen Oaks consist of 1 and 2 bedroom apartment homes. Featuring upgraded kitchens, in-unit laundry, fitness center, and community pool/room, with garages available. Beautiful landscaped grounds with community pool and amenities. Fantastic location nearby multiple shopping amenities, dining, and entertainment options, all within ten minutes of the property.

Patchen OaksHouston, TX

Units

Built

Renovated

192

1990

2006


OFFERED BY




WHY INVEST NOW

The financial crisis led to a drastic reduction in the value of

commercial real estate. As the cyclical real estate market recovers,

there are excellent opportunities to purchase investments at low

prices related to their value. The TIC industry, in particular, provides

numerous opportunities to invest because of poor sponsorship and

management. Many TIC investors who planned to invest for four or

five years are still looking for an exit eight years later. Sellers are

anxious to exit the investments and are willing to sell.

CMBS and loan maturities are anticipated to reach all-time highs

from 2015 to 2018, creating significant investment activity. Many

properties will not be able to refinance without rescue capital or

financial reengineering. Credit markets have improved providing

low-cost financing and strong availability to execute the strategies

laid out in the VHGF II business plan.

These conditions enable savvy real estate investors to benefit from

the upcoming real estate cycle. There are a large number of TIC

interests that can be purchased at low prices before the expansion

and appreciation of the next real estate cycle.

“As the cyclical real estate

market recovers, there are

excellent opportunities to

purchase investments at low

prices related to their value.”


OFFERED BY




INVESTOR WATERFALL

First: Investor Preferred Return to all investors in proportion

to their membership interest until each investor has

received a 15% preferred return on their capital contribution.

Second: Return of Investor Capital, 100% to all investors

until investors receive all of their original investment.

Third: Pro Rata distributions, thereafter, all distributions shall be

paid 50/50 between investors and sponsors based on investors

pro rata basis.

“The Fund’s commitment

to superior returns is only

equaled by its commitment

to solid long term relation-

ships with investors.”


OFFERED BY




OUR TEAM

VHGF Manager, LLC, an affiliate of Virtual Partners LLC, offers and

manages the highest quality commercial real estate investments

across the country. With a portfolio of over $300,000,000, Virtua

utilizes expansive expertise in property operations to maximize

cash flow. Virtua fosters deep relationships with national credit

tenants to increase our investors’ wealth through unparalleled

investment performance and appreciation.

Lloyd Kendall, Jr. - Principal

Lloyd is the Chairman and Co-Founder of Bay Commercial Bank. He

is a lawyer and has practiced in the Bay Area since 1978, specializing

in real estate and tax law. His specialty is tax free exchanges and

related matters. Lloyd started his career at the lnternal Revenue

Service. After leaving the IRS, Lloyd founded Lawyers Asset

Management, lnc., acting as a “Qualified Intermediary “ for tax

free exchanges under §1031(a) of the Internal Revenue Code. In

2006, his company merged with Commercial Capital Bank. Lloyd

has overseen more than 30,000 individual 1031transactions. He

served as tax counsel for several title companies and was the

President of Equity Investment Exchange, Inc.; a competitor

owned by Mercury Title Companies of Colorado. He has lectured

extensively throughout the U.S., providing continuing education for

Lawyers and Real Estate Professionals across the country. Lloyd is

the author of 1031 Exchange Concepts, a treatise on tax deferred

investment strategies.

Quinn Palomino - Principal

Quinn Palomino is the Founder and Principal of Clear Vista

Management, which provides specialized services to tenant-in-

common investors, including asset management and Section

721rollup consulting. Quinn understands the complex nature Quinn Palomino

Lloyd Kendall, Jr.


OFFERED BY




OUR TEAM

Virtua Partners

Led by Lloyd W. Kendall, Jr. and Quinn Palomino, Virtua Partners LLC

(“Virtua”) offers and manages the highest quality commercial real estate

investments across the country. Tapping into an expansive expertise

in property operations to maximize cash flow and utilizing deep

relationships with national credit tenants to increase investor wealth

through unparalleled investment performance and appreciation.

Virtua seeks to provide tax advantaged investments for individual

real estate investors. Seeking to purchase investment grade office

and industrial properties with an emphasis on high quality tenants

and steady returns. With a strict focus on cost control in all aspects of

a transaction - acquisition (load), management, operating costs, and

disposition. And providing the highest levels of customer service to

tenants, which enhances the long-term value of properties.

Virtua professionals have advised real estate funds with over

$5,000,000,000 in assets under management. Taking these

institutional experiences from Wall Street to the investors of Main

Street. Virtua’s investments have specific objectives, providing

balance to an individual investor portfolio. Through the synergies

of Virtua’s relationships and affiliated funds, they provide flexible

options to clients in today’s turbulent investment real estate market.


OFFERED BY




OUR TEAM

of TIC investments and offers TIC clients’ individual, personalized

service with an emphasis on communication and transparency.

Prior to launching Clear Vista Management, Quinn was the Director

of Business Development for Workout Consulting Firm where she

worked on more than $2B of TIC investments. Prior to Breakwater,

Quinn was a partner at a San Diego-based construction and

development company where she worked on development projects

with government agencies, including the California Department

of Parks and Recreation, the City of Pittsburg, and the California

Redevelopment Agency.

Versant Commercial Brokerage

Versant is a commercial real estate investment and finance firm.

Versant provides high quality investment opportunities for individual

investors by giving access to exclusive deals. Versant’s professionals

have advised on over $3,000,000,000 of commercial real estate

engagements.

Through a private network of investors, Versant provides debt and

equity capital for commercial real estate projects. Versant’s network

of relationships, sophisticated analysis, and experience in deal

structuring give it unique capabilities to place debt and equity for

real estate projects nationwide. Versant’s investors obtain superior

returns by directly investing in exclusive opportunities, thus,

eliminating redundant financial intermediaries.

With over 25 years of commercial real estate and investment

experience, Versant and its affiliates can provide the right suite

of advisory services for its clients’ specific needs. Each advisory

assignment is staffed with a team of senior professionals and

analysts to provided proven solutions.


OFFERED BY




OUR TEAM

Matthew Mueller -Versant President

Matt Mueller brings 13 years’ of capital markets and investment real

estate experience, including more than 500 completed transactions.

As a broker, he structured a wide range of commercial real estate

transactions, including investment, syndication, and development

opportunities. Matt handled feasibility analyses for Fortune 500

companies as well as institutional and private investor clients. Prior

to Versant, Matt led the Capital Markets and Structured Finance

team for a consultancy firm, providing nationwide commercial

loan workout strategies in excess of $4B. As Vice President, Matt

implemented the financial analysis, sourcing of debt and equity,

and modeling for over $500M in recapitalization assignments.

Matthew Mueller

“By removing Wall Street

middle men, aggressive

loads, and high fees,

Versant’s clients benefit

from lower costs and

increased returns.”


OFFERED BY




NOTES

DISCLAIMER The information and any statistical data contained herein have been obtained from sources which we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. All opinions expressed and data provided herein are subject to change without notice. Versant Commercial Brokerage, Inc. and/or its members, directors, officers, consultants, and/or employees, may have agreements involving equity or other financial interests in the subject property, or deal as principals in the investment discussed herein.

This potential investment opportunity may not be suitable for all types of investors. All investments involve different degrees of risk. You should be aware of your risk tolerance level and financial situations at all times. Furthermore, you should read all transaction documents and statements. Read any and all information presented carefully before making any investment decisions. You are free at all times to accept or reject all investment recommendations made by Versant Commercial Brokerage, Inc. All investments presented are subject to market risk and may result in the entire loss of investment. Past performance is no guarantee of future results, and current performance may be lower or higher than the performance data quoted.

The information contained herein should not be used in any actual transaction without the advice and guidance of legal counsel and a professional tax advisor who is familiar with all the relevant facts. The information contained here is general in nature and is not intended as legal, tax, or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for an individual’s’ specific circumstances or needs and may require consideration of other matters. Versant Commercial Brokerage, Inc. and its members, directors, officers, employees, and consultants assume no obligation to inform any person of any changes in the tax law or other factors that could affect the information contained herein.

These materials may include forward-looking statements, including financial projections, plans, target, and schedules on the basis of currently available information and are intended only as illustrations of potential future performance. Forward-looking statements, by their very nature, are subject to uncertainties and contingencies, and assume certain known and unknown risks.Since the impact of these risks, uncertainties, and other factors is unpredictable, actual results and financial performance may substantially differ from the details expressed or implied herein. Versant Commercial Brokerage Inc. assumes no obligation to release updates or revisions to forward-looking statements after the issuance of this report. Not all photos are representative of VHGF or Virtua investments and may be used for marketing purposes.

Virtua - versantcre.com · virtua high growth is a fund of virtua partners offered by virtua high...

Documents

Transcript of Virtua - versantcre.com · virtua high growth is a fund of virtua partners offered by virtua high...