equity investment proposal
Contents
01 / Project Overview 02 / Executive Summary 03 / Architectural Schematics 04 / Sponsor Information
Project Overview
the project A high–rise hotel style apartment building in the heart of bustling Long Island City.
Site Location 44 – 41 Purves St. Long Island City, NY The project is located in the heart of Long Island City and within blocks of Citibank Operation headquarters, Tishman Speyer’s Gotham Center, the UN Credit Union Building, and PS1 Museum. Additional buildings are in the construction phase including the Rockrose residential tower which will also house Law School of the City University of New York.
Nearby Criterion Properties LGA G
ra
nd
Ce
n tra
l P kw y
Manhattan
Queens
Lo n
PROPOSED PROJECT
8
g Is
land
Ex p
y
Qu Brooklyn
s een
Ex
py
COMPLETED PROJECT
Criterion Group, LLC
SITE LOCATION
Executive Summary
Executive Summary Acquisition Cost Land was acquired on January 12, 2012 for a distressed sale price of $8,218,290 inclusive of all settlement costs; translating to $68.49 per square foot (“SF�). The price is 30% below current market value. Property Description Land Area of 15,000 SF known as 44-41 Purves Street registered under Queens County; Block 267; Lots 5, 6, 8 & 9 and zoned for 120,000 buildable SF. The subject property is the Left Tower shown on the project renderings. Development Cost Total development cost is estimated to be $45,147,000 +/- sourced with $33,000,000 (73%) construction loan and $12,147,000 (27%) as equity. Projected Rents The projected rents are $43.00 PSF/annum which is below the current market rents of $45.68 PSF as provided by tvhe marketing agent, Citihabitats. Building Size, Unit Count & Mix The building will have 150 units with 111,385 net rentable square footage. The unit mix will be 25-studios; 100-one bedroom; 24-two bedrooms; and 1-three bedroom. All units are designed to have maximum efficiency.
12
Criterion Group, LLC
421-A Tax Abatement The Project is entitled to a 15 year tax abatement. Timing Total project term is 39 months from the land acquisition date. Construction is set to start on 10/01/2012 and completed by 10/1/2014. Leasing is expected to begin on 10/1/2014 and stabilized by 4/1/2015. Sponsor Criterion Group LLC, the sponsor, is a prominent local residential developer and focuses on the Queens niche market. With an in house design built capability, Criterion has consistently delivered its’ projects on time and within budget.
Valuation The project is expected to net $3.63 million income which results in a net value of $55,056,000 and a profit of $9,908,000. Returns & Hurdles Preferred Return of 12% to Equity Investor Upside Split Above Preferred: 80% Equity Investor & 20% Sponsor Marketing Agent The project will be leased by Citihabitats Marketing Group - the largest residential brokerage firm in NYC. Their affiliates include Coldwell Banker, Coldwell Banker Commercial, Sotheby, and Corcoran.
13
Studio Renderings
Neighborhood Information Location The project is located in the heart of Long Island City and within blocks of Citibank Operation headquarters, Tishman Speyer’s Gotham Center, the UN Credit Union Building, and PS1 Museum. Additional buildings are in the construction phase including the Rockrose residential tower which will also house Law School of the City University of New York. Car Access Car access to Manhattan is within a few blocks via the Midtown Tunnel and Queensboro (59th Street) Bridge. Long Island Expressway is easily accessed from the subject property, providing only a short drive to LaGuardia Airport, JFK Airport and CitiFields. Subway Access Long Island City is a transportation hub and the project is within walking distance of several major subways which are all one train stop into midtown Manhattan: The Queensboro Plaza Station:
7
E
M N
R
Q
Citibank Court Square Station:
E
F
G
Overall The transportation infrastructure, recent rezoning and beautification of the area by the NYC Department of City Planning, priced out Manhattan residents moving in, and the inherent demand created by relocation of the various office employees into the area are the primary contributors to the enormous residential growth of Long Island City.
16
Criterion Group, LLC
17
Planned Features
Bulding Amenities Pool & Private Fitness Club Sauna Concierge Service 24/7 Outdoor Playground on Green Roof Residential Library Lounge with WiFi Resident Only Entertainment Space & Roof Deck with Catering Kitchen Roof Top Barbeque Facility Sun Tanning Area with Outdoor Showers Pet Grooming Area Bicycle Storage Sky Lounge Private Dining Room
18
Residence Features Individual Climate Control System in Each Unit Solid Oak Floors Ample Closet Space Recessed Down Lights Efficient Layouts with Flexibility for Different Sharing Configurations Wired for High-Speed Data and Cable Connection Bosch Stacked Washer and Dryer in Each Unit 9-Foot Finished Ceilings
Criterion Group, LLC
Kitchen European Style Kitchens with Integrated GE Stainless Steel Appliances Four Piece Appliance Packages: Refrigerator, Dishwasher, Gas Stove, Microwave All Kitchens are Centrally Exhausted Grohe Faucet Stone Vanity Counter Tops Custom Glass Tile Backsplash
Bathroom Kohler Tub Kohler Under Mount Sink Vanity Kohler Toilet Grohe Faucet and Shower Fixtures Stone Countertops Custom Vanity Recessed Medicine Cabinets with Full Wall Mirror Radiant Heat Flooring
19
Archiectural Schematics
Elevations Two dimensional exterior views of proposed building
22
Criterion Group, LLC
23
Unit Layouts Floor plans for various unit types
UNIT LAYOUT STUDIO
UNIT LAYOUT 1 BEDROOM TYPE A
24
Criterion Group, LLC
UNIT LAYOUT 1 BEDROOM TYPE B
UNIT LAYOUT 2 BEDROOM
25
Sponsor Information
About Criterion Business Philosophy Criterion is one of the leading investors and managers of real estate in New York. Our goal is to invest in buildings providing quality living at affordable prices. We invest where people want to live, in urban settings offering a full array of amenities and transportation alternatives. Ease of access to mass transit is one of the keys to success in times of financial distress or rising fuel prices. In large measure, we have achieved this position by recognizing opportunities where most others see only difficulties. We then transform these opportunities into assets of greater value. Our ability to do so is the result of a philosophy of approaching each investment property as a stand alone business in order to create maximum value for our buyers and partners. This philosophy, combined with a culture that encourages creativity and unconventional thinking across a variety of disciplines, has enabled Criterion to acquire and manage an ever expanding base of assets.
28
Vertical Integration Criterion’s vertical integration is one of the keys to its success. Our multidisciplinary teams enable us to envision a broader array of possibilities than others. We have the skills and experience in house-in acquisitions, planning and design; asset management; tax and risk management; dispositions; finance; and client services. All these smoothly integrated services allow us to add value to every aspect of a property.
Criterion Group, LLC
Our Team Criterion’s managing team has more than 20 years of combined experience in various aspects of the real estate market including acquisition, due diligence, market research, capital formation, investment structuring, asset management, disposition and strong experience in identification of distressed assets. Criterion’s management philosophy places utmost importance on its Principals being directly involved in all key elements of its business. The Principals have invested in over $340 million of real estate transactions throughout the U.S. and across all major property sectors since the inception of Criterion in 2002.
29
Capabilities Develoment Philosophy Every investment begins with a comprehensive valuation and acquisition process. With many years of combined experience in commercial real estate, Criterion can make accurate and timely decisions in house, allowing Criterion to move quickly on opportunistic investments. All valuation models are then supported by 3rd party affiliates to mitigate any potential market uncertainty. Local market knowledge and expertise is central to the formulation and execution of our investment strategy. Criterion’s equity partners gain access to privately negotiated, off-market transactions and further benefit from our proven expertise in leasing, property management, and asset management. Local market knowledge and expertise is central to the formulation and execution of our investment strategy. Our extensive network of relationships enables us to identify opportunities before they reach the market. Criterion’s equity partners gain access to privately negotiated, off-market transactions. This enables Criterion to create value for our buyers and partners. Design & Constrution Through Criterion’s vast network, Criterion partners and hires skilled design and construction professionals that have a unique track record overseeing the completion of high quality construction projects. Criterion only partners with efficient General Contractors with strong track records. Criterion’s team has over 20 years of real estate and finance experience in all types of residential and commercial property development.
32
Criterion Group, LLC
Through Due Dilligence The due diligence process includes: +1 Analysis of the supply and de-
mand dynamics in the selected market and its submarket.
+2 Exhaustive analysis of rent rolls,
expense line items and capital requirements.
+3 Through local knowledge and
hands on experience Criterion can determine if there is underlying value that can be unlocked.
+4 Detailed review of the existing or proposed financial structure.
+5 In-house management and coor-
dination of legal counsel, environmental consultants and property valuation. Third party reports will be obtained to verify all key elements of the transaction.
Criterion’s in house professionals carefully manage each element of the due diligence process to increase the likelihood of the successful acquisition of an existing property or the investment in a new property.
33
20 years. The Criterion Group, LLC was founded in 2002. The managing principals complement each other with over twenty years of relevant experience.
34
Criterion Group, LLC
WHAT WE DO We are personally involved in all aspects of the real estate development process: valuation, pre-development, planning & design, construction management, asset management, and final disposition. Making these precise decisions in house, in an industry that is constantly evolving and highly competitive, is our greatest strength.
Criterion invests and develops in niche markets such as Long Island City, Astoria, and Flushing. These communities are in close proximity to Manhattan are densely populated, culturally diverse, and are in very short supply of quality residential buildings. Encumbered by high demand, they are ideal for small families, young professionals, and individuals seeking quality housing in lively neighborhoods within minutes to midtown Manhattan.
35
Criterion Group, LLC
Purves Towers 41-44 Purves Street Long Island City, NY
Greyhound Bus Terminal 1001-1025 Filbert St. Philadelphia, PA
West Filbert
Broadway Residence II
Type Residential Units 271 Gross SF 269,759 Project Duration 39 Months Completion Date April 2015 Status Design Phase
Type Land Units 1 Gross SF 570,360 Project Duration 11 years Completion Date Winter 2016 Status Long Term
Type Residential Units 208 Gross SF 196,681 Project Duration 34 Months Completion Date April 2013 Status Under Construction
Flushing Terrace 140-21 32nd Avenue Flushing, NY
Type Residential Units 61 Gross SF 100,357 Project Duration 36 Months Completion Date 2009 Status Sold
36
Criterion is one of the leading investors and managers of real estate in New York. Our goal is to invest in buildings providing quality living at affordable prices. We invest where people want to live,
12-15 Broadway Astoria, NY
30-50 Apartments 30-50 21st Street Astoria, NY
Type Residential Units 65 Gross SF 62,059 Project Duration 30 Months Completion Date 2011 Status Stabilized
Criterion Group, LLC
Selected Projects in urban settings offering a full array of amenities and transportation alternatives. Ease of access to mass transit is one of the keys to success in times of financial distress or rising fuel prices.
One Astoria Square
Broadway Residence I
Type Residential Units 117 Gross SF 124,197 Project Duration 36 Months Completion Date 2010 Status Sold
Type Residential Units 79 Gross SF 88,137 Project Duration 42 Months Completion Date August 2012 Status Leasing
26-24 21st Street Astoria, NY
11-15 Broadway Astoria, NY
The Astor
City Gate
The Astoria
Type Residential Units 36 Gross SF 34,359 Project Duration 24 Months Completion Date 2009 Status Sold
Type Land Units N/A Gross SF N/A Project Duration 36 Months Completion N/A Status Sold
Type Residential Units 28 Gross SF 45,045 Project Duration 36 Months Completion Date 2008 Status Sold
12-26 30th Avenue Astoria, NY
41-46 24th St. Long Island City, NY
21-24 30th Avenue Astoria, NY
37