+/- 200 Unit Multifamily Development

Southern California


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Entry Elevation

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Active Lifestyle

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The 1-Bedroom Floor Plans

OPPORTUNITY:

  • Off Market
  • Entitled +/- 9.3 acre parcel - approved for up to 206-unit multifamily development.
  • Site plan and building plans are being prepared for the MF development.
  • The subject parcel is part of a 90 acre site that also includes +/- 244 single family lots that will be developed by a production builder. These lost are currently under contract with a large, public builder
  • Close to empolyment, hospitals, higher education

THE OFFERING:

  • Entitled land
  • Purchase Price: $6,180,000 / $30,000 per door
  • Due Dilgence: 45 days
  • Closing: 30 days after Due Diligence

PROJECT SUMMARY:

  • 206 Proposed Residential Units totalling +/- 172,000 NRSF and +/- 220,000 GSF
  • Adjacent to parks and trails
  • Core Southern California location
  • Nearby Employers Include:
    • Two Hospitals
    • An multinattional software developer and service provider
    • A university
    • A military base
  • Minutes from a freeway
  • First year NOI projected at $2,476,000
  • Unlisted asset

VALUE

Our ARGUS model shows a Project IRR of 15.5% and a Multiple of 2.2 for an 84 month Project using a 5 CAP on Reversion NOI

These assumptions include pricing recommendations by an independant market research firm and cost estimates from two large, well qualified General Contractors

Buyer / Investor must rely on its own Due Dilligence

FINANCIAL ASSUMPTIONS

Acquisition 
$6,180,000

NOI
Year 1 - $2,540,000 
At Disposition (approx. month 84, February 2025) - $2,857,000

Revenue 
Net Operating Income - $13,391,000
Capitalized Rent - $57,764,000
Total Project Revenue – $71,156,000

Total Project Costs:
Excluding Finance and Disposition - $46,036,000 (64.7% of Total Revenue)
Including Construction Loan and Mortgage Interest & Fees - $55,239,000

Profit:
$16,483,000 available for distribution

Construction Debt:
$31,568,000

Total Equity:
+/- $13,750,000 
90% Buyer/Capital Partner = $12,500,000 
10% Developer Co-invest = $1,250,000

Mortgage:
+/- $37,386,000 brought on at stabilization

Equity IRR / Multiple
15.4% / 2.2

TIMING

This is an unlisted opportunity.  The seller is a land developer who has delivered more than 30,000 lots to public and private builders over the last two decades. 

They have received final approvals for the master plan in November 2017.  Improvement and Grading Plans are being prepared now.  It is anticipated a grading permit for the master plan can be issued anytime after January 2018. 

Offsite improvements should take 4 months and will be completed by the developer of the 240 single family lots.

Onsite improvements for the multifamily parcel can overlap and could start after September 2018.

The overall construction cycle is projected to be 24 months.  Stabilization is anticipated to occur in month 32 (June 2020).

 

RELATIONSHIP

Ownership's is looking for an experienced buyer capable of closing expeditiously.

 


Contact: Joe Richter
949 677-7722 (cell & text)
JRichter@HanoverDevelopment.com
Skype: 949 769-2000

 

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