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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
slide4
10

POMONA

15

ONTARIO

60

CHINO

83

71

CHINO

HILLS

EASTVALE

slide5
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?
ad