Portofino power point presentation 9.25.12
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Transcript of Portofino power point presentation 9.25.12
+
SBpacific
City View Apartment, San Antonio
groupPortofino, San Antonio
Portofino, San Antonio
9/25/12
East Lake Laney Lofts, Oakland
+About SBpacific Group
Our History SB Pacific Group acquires under-utilized
properties and transforms them into vibrant, high-value real estate assets
Located in Berkeley, California Founded in 1986
Experience Focus on value-add infill development Handles large luxury redevelopment
Lake Merritt Lodge, Oakland
9/25/12
+Investment Philosophy
Texas and California High density suburban
property
Supervise construction and rehabilitation projects
Superior network of contacts
Class B- to B+ or B renovations Rehabilitation, repositioning,
and adaptive re-use
Geographic Specialization
Management Expertise
Fundamental Value-Driven
Approach
9/25/12
+Acquisition Criteria
Property Types Multifamily rental Retail & Office
Market Segment Opportunistic value-add Up-trending submarket
($5-$20 million) Near-term growth focus in
California and Texas
Lodge on Perrin Creek, San Antonio
9/25/12
+Recent Projects
9/25/12
San Antonio Apartment Portfolio
- 211 units bought with 65% occupancy
- Rent increase- Full rehabilitation to 95% occupancy
East Lake Laney Lofts
-Renovated creamery to 26 Class A Condos - All units sold within 1 month of finish
City View Apartments
- 318 units re-branded to City View
- Rent increase and still own- Full rehabilitation to 96% occupancy
San Antonio Apartment Portfolio
East Lake Laney Lofts
City View Apartments
San Antonio, TX Oakland, CA San Antonio, TX
The Offering
Price: $11,500,000Built: 1970Price Per Unit: $42,279Price Per Sq Foot: $50.86Units: 272GBA: 226,104Land Area: +/- 10 acres
9/25/12
+
San Antonio and the Surroundings… San Antonio is the 7th largest city in the U.S with a population of 2.08 million Portofino is near the South Texas Medical Center which includes 45 medical
institutions and over 28k professionals. Associated support businesses employ 23k. The average wage is 20% higher than the median San Antonio income.
Portofino is a walking distance to USAA, a San Antonio based diversified financial services group. Over 18,000 employees occupy the corporate headquarters at the corner of Fredericksburg and Huebner.
Location Profile
South Texas Medical Center
9/25/12
+Location Profile
9/25/12
Strategic Access Advantageously located within five
minutes to two of San Antonio’s largest employment centers
Short drive to San Antonio’s largest university, new retail centers, and state of the art entertainment
Flourishing Employment USAA, South Texas Medical Center,
and the University of Texas at San Antonio in immediate submarket
Adjacent to Fredericksburg Road and a short distance to Interstate Highway 10 and Loop 410
+Location Profile
9/25/12
+Apartment Unit Amenities
9/25/12
Indoor Amenities 272 Unit Garden Apartments in northwest submarket Central HVAC & washer/dryer connections in select
units Large walk-in closets and storage Fitness center and two clothes care facilities Select units have remodeled kitchen and bath
Outdoor Amenities Two swimming pools Gated entry w/ picnic area and barbeque stations Lush native landscaping with magnificent oak trees,
limestone garden walls, and courtyards Professional leasing center
Apartment Unit Breakdown
9/24/12
Units Type Unit SF Total SF
56 1 Bed / 1 Bath 525 29,40068 1 Bed / 1 Bath 705 47,94080 2 Bed / 2 Bath 905 72,40040 2 Bed / 2 Bath 1,032 41,28028 3 Bed / 2 Bath 1,253 35,084
272 831 226,104
+Apartment ComparableApartment Complex # of Units Avg. Size (SF) Avg. Market Rent Rent per sq.foot
Arroyo Ranch 277 968 $802 $0.83
Bent Tree 272 693 $693 $1.00
County View 272 784 $744 $0.95
Limestone 324 764 $639 $0.84
Mesa Ridge 200 784 $694 $0.94
Portofino 272 833 $651 $0.78
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+Rent Comparable
9/25/12
Discount
Value-AddOccupancy
Why Purchase Montage at North Point?
9/25/12
Attractive Occupancy Current economic occupancy is 76%
and present physical occupancy is 92% our target physical range is 98%
Increase occupancy and maximize collections boosting revenue
Well Located Asset Ability to attain asset directly from
lender with asset management upside (Off Market Opportunity)
Value-Add Opportunities
Exterior Additions Landscape trimming & sprinklers Painting a portion of the building Recoat and restripe the driveway
Interior Upgrades Replace carpet with Prego Replace kitchen laminate
countertops with granite Two-tone painting
Timing Ideal due to expansion of South
Texas Medical Center Historically low interest rate &
depressed price
9/24/12
+Expected Development Results
General Notes Current Occupancy 90%, Stabilized 88% / Water reimbursement through Conservancy Expenses based on City View Performance
2011-2012 Pro Forma 3rd YearGross Scheduled Rent 2,116,896 2,263,956
Vacancy and Collection Loss 692,356 387,801
Net Rental Income 1,424,540 1,876,155
Other Income 119,213 212,386
Economic OccupancyPhysical Occupancy
67%90%
83%93%
Total Income 1,543,753 2,088,541Total Expenses 1,362,157 1,255,231
Net Operating Income 181,596 833,310
9/25/12
+Purchase Price Analysis
General Assumptions Assumes 75% Loan to Value Total Cash Down payment includes 1% loan fee, insurance, legal fees, title &
escrow, and capital reserve
Actual 3rd Yr Proforma
Purchase Price 11,500,000
Down payment 3,248,775
NOI 181,597 833,310
Mortgage Payment6.9MM 5.6% 30-yr due in 7 years)
330,938
Net Cash Flow 181,597 502,372Return $ on $ 15.46%
9/25/12
+Net Cash Flow & IRRScenarios
IRR 2011 2012 2013 2014 2015 (Sale)
Cap Rate
127.62
% -2,935,901 396.770 427,017 493,904 5,587,4655.75
%
227.21
% -2,935,901 396.770 427,017 493,904 4,573,1086.25
%
324.79
% -2,935,901 396.770 427,017 493,904 3,709,0266.75
%
4 22.40%-2,935,901 396.770 427,017 493,904 3,323,275
7.00%
9/24/12
IRR1 IRR2 IRR3 IRR40.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00% 27.62% 27.21%24.79%
22.40%
5.75% 6.25% 6.75% 7.00%
IRRCap RateSeries3
Our Market View
Key Advantages
Cheap Financing 3.75% in Pro forma Model
Attractive Market +10% Cash on Cash Return Up-trending submarket Property enhancements can push
rents higherLodge on Perrin Creek, San
Antonio
9/25/12
+Projected Fees
Management Structure Fee
General Management receives an acquisition fee of .75% for sourcing, seeding, negotiating, and closing opportunity.
Asset and Management Fee is 5%
Investors and general management will split the annual net cash flow 85/15 as long as investors receive 6% annual return on their investment.
At closing, Investors and General Management will split all proceeds 80/20 after meeting all obligations including but not limited to debt service and closing costs.
9/25/12
+Experienced Team of Professionals
Responsible for strategic management of the firm, Mr. Sarfaty identifies, evaluates and selects investment opportunities for SB Pacific Group. Prior to founding SB Pacific Group, Mr. Sarfaty used his entrepreneurial skills to establish several small companies, including a contracting business which he continues to operate today.
Yuval Bobrovitch Principal & Co-founder
He has held a real estate license since 1989.His experience as a contractor and his eye for opportunity have helped Mr. Sarfaty negotiate lucrative real estate transactions that create lasting value.
Responsible for oversight of construction projects, Mr. Bobrovitch is involved in site analysis, design development and construction management. Mr. Bobrovitch has extensive experience in the construction and renovation of multifamily residential and commercial properties. He is a general contractor, and supervised all of the early projects in the SB
Pacific Group Portfolio. Through his diligence, Mr. Bobrovitch sets the standard by which the full upside potential of properties should be reached.
9/25/12
Igal SarfatyPrincipal & Co-founder