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Esperanza. IMN Real estate private equity forum. The Opportunity. Property under contract for $35M Purchase includes 289 single family lots, 10ac school site 107 standard detached lots (50x90 minimum, 4,500 sqft ) 82 standard detached lots (50x80 minimum, 4,000 sqft )

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Presentation Transcript
Esperanza

Esperanza

IMN Real estate private equity forum


The opportunity
The Opportunity

  • Property under contract for $35M

  • Purchase includes 289 single family lots, 10ac school site

    • 107 standard detached lots (50x90 minimum, 4,500 sqft)

    • 82 standard detached lots (50x80 minimum, 4,000 sqft)

    • 100 detached z-lots (45x80 minimum, 3,600 sqft)

  • Located in the City of Ontario, San Bernardino County

  • Within the “New Model Colony”

  • All discretionary approvals in place (except architecture)

  • Approved Grading and Improvement Plans

  • 18-24 months to first home delivery


10

POMONA

15

ONTARIO

60

CHINO

83

71

CHINO

HILLS

EASTVALE


Future Development

Developed by Others

Subject Property


The market
The Market

  • Projected Esperanza Product

    • Home Size: 2,400 - 3,400 sqft

    • Base Home Pricing: $500,000 - $600,000

  • Existing Competitors

    • Currently zero active communities within NMC

    • Eastvale – 10+ Active communities, pricing from $390,000 - $650,000

    • Chino – 8+ Active communities, pricing from $300,000 - $575,000

  • Future Competition

    • ~12 product lines in NMC in next 12 months

      • Located in fully amenitized master planned communities

      • Transactions structures include aggressive price participation to Seller

  • Generally similar lot size and product


The request
The Request

  • Equity

    • For a 90/10 partnership to purchase, develop and construct homes

  • A&D Loan

    • $35M land purchase

    • $24M development cost

    • Improve lots to a Finished Lot condition

    • Paid off in phases by the Construction Loan

    • 36 month term

  • Construction Loan(s)

    • 3 separate planning areas

    • Expected first start - January 2016

    • Final delivery expected - October 2017


The project returns
The Project Returns*

  • * Includes assumption for Debt


The negotiation
The Negotiation

  • Equity Terms

    • Peak Equity Contributed?

    • Required Co-Investment?

    • Preferred Return / Waterfall?

  • Debt Terms

    • Loan-To-Cost, Loan-To-Value?

    • Rate / Points?

    • Release Price?

    • Guarantees? (Recourse / Non-Recourse)

    • Facility / Separate Loans?


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