PACIFIC GARDENS

Co-GP Passive Investment

RETURNS

Expected (net) returns between 40-50% IRR and approx. 1.5x equity multiple within 18 months.

SPONSOR

EV Capital Partners

Location

25 McAker, San Mateo, CA

OVERVIEW

 

EV Capital Partners (“EV” and “sponsor”) is in escrow to purchase 25 McAker Ct (“Property”), a 38-unit townhouse style condominium in the heart of San Mateo, California. The anticipated closing date is December 17th, 2021. The property is being purchased at approx. a 21% discount.

 

PRE-SALES

 

EV is under contract to purchase the property for $34 million. EV began pre-selling units in late Oct 2021 to close simultaneous with the property. As of Nov 14th, three (3) vacant units and one (1) tenant-occupied unit are under contract. Sponsor expects six (6) units will be pre-sold and conveyed at closing. The remaining 32 units will be purchased for a net price of $27.5 million.

 

OPPORTUNITY

 

EV is pleased to present the rare opportunity to invest alongside the sponsor in the General Partnership (“GP”) position. Sponsor has executed term sheets with lender (Maxim Capital Group) to fund 69.5% of costs and Limited Partner (Red Starr) to fund 84% of the equity.

  • Loan Proceeds of 69.5% LTC ($20.8M)

  • Equity 90% Funded ($8.2M from LP & sponsor

 

Sponsor is seeking equity investors to participate in up to $920,000 as co-GP equity.

  • Minimum: $100,000

  • Terms: Preferred 20% IRR (net), then share in 25% of the GP promote, pari-passu.

  • Returns: Expected (net) returns between 40-50% IRR and approx. 1.5x equity multiple within 18 months.

RETURN SENSITIVITY

Avg. Sale $ / SF

$835 psf

$860 psf

$885 psf

$910 psf

Investor IRR

31%

43%

51%

60%

Equity Multiple

1.4x

1.5x

1.6x

1.7x

SENIOR LOAN

(MAXIM CAPITAL GROUP)

Loan Type:

Loan to Cost: 

Loan Amount:

Interest Rate:
Term:
100% Paydown until:

Paydown thereafter:

Origination & Broker Fees:

Non-recourse

69.5%
$20.8 M ($494 psf) 

L + 716 bps

24 mos + extension

$300 psf
80%
1.5% + 1.0%

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PROPERTY DETAILS

Address:
Location:

Year Built/Converted:
Unit Descriptions:
Unit Size:
Building Area:
Project Purchased Area:

Project Hold (Absorption):

25 McAker Ct
San Mateo, CA
1993 / 2021
3 Bed / 2.5 Bath

1,318 SF
50,084 SF (38 units)

42,176 SF (32 units)

18 months

SOURCES & USES

Uses

Bulk Condo Purchase

Exp. Pre-Sale Proceeds

Purchase Price

Legal & Closing Fees Working Capital (CapEx) Tenant Relocation

Financing Costs

Op. & Interest Reserves

Total Uses

Total

34,000,000

(6,510,698) 

27,489,302 

396,447

350,000

400,000

724,194

610,753

29,970,695

$/SF

679

823 

652 

9

8

9

17

14 

711

SALE PROCEEDS

 

Total Exit Proceeds
Total WC & Cost of Sales

Net Exit Proceeds

 

Less: Debt Repayment

Less: Equity Repayment

Equity Profit

$ Total 37,352,143 (2,310,046) 35,042,096

 

(20,829,633) (9,141,062) 5,071,401

$/SF

886

 (55) 

831

 

(494)

(217) 

120

CO-GENERAL PARTner Terms

Available co-GP Equity:

Co-GP Preferred Return: 

Co-GP Equity Returns:

$920,000
20.0% IRR
51.3% IRR / 1.57x MOIC​

LIMITED PARTNER

(RED STARR)

LP Contribution (% equity): Equity Investment:
LP Preferred:
GP Promote Thereafter:

LP Exp. Returns:

86%
$7.67 M
20% IRR / 1.25x MOIC

50%
32% IRR / 1.34x MOIC

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