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Esperanza

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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Esperanza

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  1. Esperanza IMN Real estate private equity forum

  2. 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

  3. 10 POMONA 15 ONTARIO 60 CHINO 83 71 CHINO HILLS EASTVALE

  4. Future Development Developed by Others Subject Property

  5. 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

  6. 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

  7. The Project Returns* • * Includes assumption for Debt

  8. 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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