996 Units | Irreplaceable Suburban Location | Proximate to Class A Office & Retail | Lowest Rents in the Submarket
Located at: 8850 Riverbend Parkway, Indianapolis, IN 46250
Click Here to: Visit Property Management Website for More Info.
Cofidentiality & Disclaimers
CONFIDENTIALITY AND DISCLAIMERS
THIS INFORMATION MEMORANDUM (“INFORMATION MEMORANDUM”) IS PROVIDED ON A CONFIDENTIAL BASIS FOR INFORMATIONAL PURPOSES ONLY IN CONNECTION WITH AN EVALUATION OF A POTENTIAL INVESTMENT (“INVESTMENT”) THAT MAY BE OFFERED BY RIVERBEND MANAGEMENT 11235 LLC OR ITS AFFILIATES (COLLECTIVELY, THE “COMPANY”) IN CONNECTION WITH ONE OR MORE COMPANY PROJECTS (“PROJECTS”). DISCLOSURE OF ANY OF THE INFORMATION CONTAINED IN THE INFORMATION MEMORANDUM, OTHER THAN TO YOUR LEGAL AND FINANCIAL ADVISORS, OR USE FOR ANY OTHER PURPOSE IS EXPRESSLY PROHIBITED WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY… [Read More]
CORONAVIRUS (COVID-19): THE CORONAVIRUS (COVID-19) (“CV”) SITUATION HAS CREATED PANIC IN THE TRAVEL, HOSPITALITY, HEALTH AND MOST RECENTLY, THE FINANCIAL MARKETS. AT THIS POINT, IT IS TOO EARLY TO DETERMINE HOW LONG AND HOW DEEP THE IMPACTS TO THE ECONOMY AND SPECIFICALLY THE REAL ESTATE INDUSTRY WILL BE. IN THE REAL ESTATE INDUSTRY, IT COULD MEAN THAT TENANTS MAY BE UNABLE TO PAY RENT AND HIGHER VACANCY RATES MUCH LIKE WHAT HAPPENED IN THE 2008 RECESSION… [Read More]
Watch Riverbend Investments Presentation
Investment Details
Attractive Risk Adjusted, Value Add Returns with Cash Flow
- Riverbend Management 11235 LLC, the Feeder Fund Manager (FFM) is offering investors the opportunity to invest up to $2,500,000 in the Riverbend Investments 11235 LLC, Feeder Fund (FF), LP investor in the Riverbend Apartments project. Following the Sponsor’s assumptions, the investment is forecast to generate Class B investor in the FF returns of a 17.8% IRR and a 1.95x multiple on invested capital (MOIC) over a five-year hold.
- Cashflows projected to Investors range from year 1 at 3.95% to year 5 at 9.86%.
- Cashflow positive during the 3 year renovation with Distributions Paid Quarterly
- Solid 1980’s year construction, B-tier asset in A-tier Irreplaceable Location with Limited Supply
- Performing Property with Upside from Value Add Renovations
Enhancing Alignment of Interest
- Feeder Fund Waterfall- 80/20 Waterfall to Investors/Managers
- Sponsor is co-investing $1.9M, 18.4% of Common Equity
- FFM & affiliates are investing at least $500k of $3M (originally funded amount), 16.6% Co-Invest
Attractive Depreciation Allocation
- We estimate a 2.4x-2.7x+ depreciation year 1 and over all 3x+ depreciation to investment ratio.
- For example,$100,000 invested is estimated to generate $240,000+ depreciation in year 1
- You have to be a real estate professional (REP) to use losses against ordinary income, or have passive investment gains to offset passive losses, if not a REP, but consult with your CPA for Advice.
Multiple Exit Strategies
- Sponsor is projecting this to be a five-year deal.
- Both refi / return of capital and resale options are on the table, and could happen in year 3+.
Asset Level Financing & Sponsor Experience
High Leverage Allows for Higher Returns and Magnified Depreciation
- There is 66M in debt + another 19M for renovation reserve = total debt 85M in first position
- There is 22M in pref equity and a seller equity for 5M.
At Acquisition:
- 85.7% LTV – leverage to common equity going in- (counting the Pref Equity as additional leverage/debt to be conservative)
Post Renovation:
- 87% LTV- Before accounting for value add from Renovations
- After renovation the LTV @ 145M = 74.8% LTV @ 160M = 67.5%
- The leverage is expected to come down as Sponsor executes the value add plan
- Majority of improvement budget going to the interior of the units ~68%- Making sure the majority of improvements result in direct rent growth.
Experienced Sponsor & Operator with Scale in Indy Market
- Sponsor has executed value-add improvement plans across 11,000 apartment homes with an aggregate asset value exceeding $800 million. Realized investments have generated a 47% gross IRR and 2.4x MOIC.
- Sponsor has deep experience in the Indianapolis MSA. Sponsor currently owns and operates 995 units in the city and has historically owned a total of 1,767 units in the city.
- In-house project and property management team with proven Sponsor Execution & Track record in the local MSA.
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