Confidential Investment Summary
This document is confidential and may not be reproduced or redistributed. The information presented herein has been prepared for informational purposes only and is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or fund interest or any financial instrument and is not to be considered investment advice. This presentation is for institutional use only and is not to be distributed to any party other than its intended recipient.
PassiveInvesting.com.
DAN
RANDAZZO Managing danny@passiveinvesting.com248-931-2528Partner
ABBOTT Managing brandon@passiveinvesting.com864-270-4190Partner
Information in these materials about the Manager, its affiliates and their personnel and affiliates and the historical performance of portfolios it has managed has been supplied by the Manager to provide prospective investors with information as to its general portfolio management experience and may not be viewed as a promise or indicator of the Issuer’s future results. Such information and its limitations are discussed further in the sections of these materials in which such information is presented.
DANNY
Past performance of indices or asset classes does not represent actual returns or volatility of actual accounts or investment managers and should not be viewed as indicative of future results. The comparisons herein of the performances of the market indicators, benchmarks or indices may not be meaningful since the constitution and risks associated with each market indicator, benchmark, or index may be significantly different. Accordingly, no representation or warranty is made to the sufficiency, relevance, important, appropriateness, completeness, or comprehensiveness of the market data, information, or summaries contained herein for any specific purpose.
CHRIS LARSEN
Past performance is not indicative of comparable future results. Given the inherent volatility of the securities markets, it should not be assumed that investors will experience returns comparable to those shown here. Market and economic conditions may change in the future producing materially different results than those shown here. All investments have inherent risks. All Rights Reserved. No part of this document may be reproduced, stored, or transmitted by any means with the express written consent of PassiveInvesting.com.
The views and opinions expressed in this presentation are those of PassiveInvesting.com, LLC. and are subject to change based on market and other conditions. Although the information presented herein has been obtained from and is based upon sources PassiveInvesting.com believe to be reliable, no representation or warranty, expressed or implied, is made as to the accuracy or completeness of that information. No assurance can be given that the investment objectives described herein will be achieved. Reliance upon information in this material is at the sole discretion of the reader. This data is for illustrative purposes only. Past performance of indices of asset classes does not represent actual returns or volatility of actual accounts or investment managers, and should not be viewed as indicative of future results. The investments discussed may fluctuate in price or value. Investors may get back less than they invested.
Forward-looking information contained in these materials is subject to certain inherent limitations. Such information is information that is not purely historical in nature and may include, among other things, expected structural features, anticipated ratings, proposed or target portfolio composition, proposed diversification or sector investment, specific investment strategies and forecasts of future market or economic conditions. The forward-looking information contained herein is based upon certain assumptions, which are unlikely to be consistent with, and may differ materially from, actual events and conditions. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. These materials may also contain historical market data; however, historical market trends are not reliable indicators of future market behavior.
Managing chris@nextlevelincome.com828-768-8700Partner
The following materials present information regarding a proposed creation of a special purpose vehicle (the “Issuer”) which would offer securities (the “Securities”) to finance its acquisition of a portfolio of financial assets to be selected and managed by the portfolio manager referred to herein (the “Manager”). These materials have been prepared to provide preliminary information about the Issuer and the transactions described herein to a limited number of potential underwriters of the Securities for the sole purpose of assisting them to determine whether they have an interest in underwriting the Securities.
HANDFORD Managing dan@passiveinvesting.com404-316-8550Partner
BRANDON
The following information is an investment summary provided to prospective investors and others. This information is not an offering to sell either a security or a solicitation to sell a security. At the request of a recipient, the Company will provide a private placement memorandum, subscription agreement and the Limited Liability Company Operating Agreement. The Managing Member in no way guarantees the projections contained herein. Real estate values, income, expenses and development costs are all affected by a multitude of forces outside the Managing Member’s control. This investment is illiquid and only those persons that are able and willing to risk their entire investment should participate. Please consult your attorney, CPA and/or professional financial advisor regarding the suitability of an investment by you.
Institutional Quality Investment
Table of Contents Executive Summary 8 Property Profile 26 Financial Analysis 36 Market Overview 44 Portfolio & Case Studies 50 Index 62
Executive Summary 9 Investment Summary 9 Investment Offering 9 Investment Highlights
This offering is a 506(c) and is open to accredited investors only. An accredited investor has either a net worth of $1 million, not including their primary residence, OR an annual income of $200,000 (or $300,000 if married) for the last two years and you have a reasonable expectation that it will continue.
Cap (Adjusted T12*) 4.2% Reversion Cap See Page 15 Expense Ratio (Adjusted T12*) 35% Occupancy (as of 9/14/22) 72% DSCR 1.56 Purchase Price $70,560,000 Hold Time 5 years Equity Required (LP) $37,700,000 Limited Partner Return See Page 15 OFFERING SUMMARY *normalized based on real estate tax expense and occupancy | 11
Historically high home ownership barriers to entry is pricing potential buyers out of the market, further increasing demand for apartment communities. Completed in 2022, The Banks at Bridgewater has a total of 252 units presenting open floor plans with luxurious finishes and a modern amenity package.
Investment Summary
The PassiveInvesting.com Team has identified The Banks at Bridgewater for acquisition.
Strategically located in one of the nation’s fastest growing cities, with 40% population growth since 2015, The Banks at Bridgewater is situated in the primary residential and recreation node, with access to top retail, entertainment, healthcare, and job centres. Myrtle Beach’s rapidly expanding population highlights its diverse demographics supporting strong multifamily fundamentals, resulting in unprecedented rent and supply growth.
Myrtle Beach, South Carolina
Migration Targeting Coastal Cities
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Southeast coastal markets are the primary benefactors of domestic migration. With over 40% population growth since 2015, Myrtle Beach’s economy and demographics highlight the positive results of recent migration trends.
Located in an Amenity Rich Corridor
Embedded in the submarket’s primary recreation district, The Banks at Bridgewater offer residents unmatched access to Myrtle Beach’s top recreation, retail, entertainment and healthcare.
The Banks at Bridgewater presents interior finishes with incredible attention to detail and unmatched quality throughout its open floor plans and modern amenity package.
Market’s Best-In-Class Assets
Demographics Yield Attractive Fundamentals
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The market features desirable multifamily fundamentals with favorable historical and future demographic trends, highlighting the direct correlation with the upward growth trajectory of Myrtle Beach.
Investor Distribution of Cashflow 7.0% Preferred to Investor 70/30 Split Thereafter Membership Ownership 70% to 13% IRR 50/50 Thereafter PARTNERSHIP STRUCTURE Targeted Returns and Equity Structure GENERAL PARTNER LIMITEDDEBTPARTNER$42,300,000$37,700,000 Ownership30%Ownership70% INVESTOR BONUS* Investments of $500,000 or more will receive an investor bonus of 30%. Investments of $250,000-$499,999 will receive an investor bonus of 20%. Bonus is paid on the backend equity when the asset is sold. *This bonus is paid by the GP equity and does not affect the returns for the other investors The capital stack for this offering consists of the General Partners, Limited Partners and Debt: 14 |
Cap Rate Return Dispositionon IRR Equity Multiple Avg. CoC* Annualized** 5.0% $140,064 12.2% 1.70x 6.0% 14.0% 4.6% $156,347 14.4% 1.86x 6.0% 17.3% 4.4% $165,599 15.5% 1.96x 6.0% 19.1% 4.2% $175,731 16.7% 2.06x 6.0% 21.2% 4.0% $186,878 18.0% 2.17x 6.0% 23.4% RETURN SUMMARY Below is a sample return based on a $100,000 investment as a Limited Partner: INVESTOR RETURNS BASED ON $100,000 INVESTMENT - CLASS A Investment Year 1 Year 2 Year 3 Year 4 Year 5 Investor Annual Percent Return 5.1% 5.7% 6.0% 6.4% 6.9% Investor Return on Investment ($100,000) $5,117 $5,735 $5,995 $6,385 $6,905 Return from Disposition - LP $0 $0 $0 $0 See Below Total Return - Limited Partner ($100,000) $5,117 $5,735 $5,995 $6,385 See Below INVESTOR RETURNS BASED ON $100,000 INVESTMENT - LIMITED PARTNER *Excludes proceeds from sale, **Includes proceeds from sale Limited SensitivityPartnerRange | 15
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Investment Offering
The PassiveInvesting.com team is pleased to present this investment offering of the 252-unit, The Banks at Bridgewater apartment community. Completed in 2022, The Banks at Bridgewater is situated in the coastal suburb of Little River, SC, one of Myrtle Beach’s finest residential areas. The property benefits from best-in-class amenities, rock solid submarket fundamentals and a central location making it the ideal apartment community for an affluent class of residents.
72% (AsOccupancyof9/14/22) 252 Units 18.97 Acres 929 Average Unit Square Feet $2.05 Average Market Rent/SF 2022 Year Built $1,857 Average Market Rent 252,000 Rentable Square Feet The Banks at Bridgewater 719 Lantern Walk Drive • Little River, SC 29566 | 17
Southeast coastal markets remain a primary destination of domestic migration.
MYRTLE BEACH
12% Pop. Growth 24% Rent Growth
MYRTLE BEACH LEADING COASTAL CITIES IN POPULATION GROWTH AS REGION’S ONLY “BEACH CITY”
These migration trends lead to increased popularity as residents of the nation’s largest cities, New York, Chicago and San Francisco, now commonly identify the southeast as a top destination to relocate. The area’s strong fundamentals provide the amenities and economic opportunities of larger cities, but higher quality and more affordable lifestyle.
Coastal cities are highlighted as the preeminent migration target locations, with Myrtle Beach emerging to the top of this list, attracting a diverse background of new residents from millennials to retirees.
Migration Targeting Coastal Cities
SAVANNAH 5% Pop. Growth 17% Rent Growth
Myrtle Beach, ranked the fastest-growing mid-sized US city in 2021-2023, with the highest population growth compared to similar southeastern coastal cities Wilmington, Savannah, and Charleston. The demand for Myrtle Beach is driven by best-in-class culture as an actual “beach city”, phenomenal climate, low cost of living and the tourism industry.
WILMINGTON
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MYRTLE BEACH AT FOREFRONT OF HISTORIC POPULATION GROWTH
40% Pop. Growth 32% Rent Growth
The market boasts the highest projected rent growth through 2027 of any midsized coastal city.
CHARLESTON 20% Pop. Growth 21% Rent Growth
Would be home buyers are turning to rental alternatives for more affordable options, creating attractive fundamentals supporting long-term rent growth.
U.S. News and World Report ranked Myrtle Beach as the fastest growing U.S. city in 2021-2022 and 2022-2023 when analyzing net migration trends over the last 5 years for midsized cities. The only city in the top 10 located outside of Florida, and achieving a perfect 10/10 score on the migration scale in the 2021-2022 survey.
SKYROCKETING HOME VALUES
AREA HOME VALUES
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Given the unprecedented number of residents relocating to Myrtle Beach with no signs of slowing down, rising interest rates and historically low supply, home values continue to skyrocket. Since 2015, average home values have increased 80%, pricing many home buyers out of the market.
FASTEST GROWING U.S. CITIES (2021-2022)
30+MILES
Embedded in the submarket’s primary recreation district, The Banks at Bridgewater offer residents unmatched access to Myrtle Beach’s top recreation, retail, entertainment and healthcare.
At just a short drive or uber to the airport, residents can easily board flights to numerous destinations available from Myrtle Beach International Airport. With a central location between Wilmington and Charleston, residents have easy access to direct routes to several other Southeastern Coastal cities both North and South via Highway 17.
Strategically Located in Amenity Rich Corridor
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EXPLORING
Myrtle Beach is home to several of the nation’s top 100 golf courses, and considered a top golf destination in the world with over 70 courses in the area. The properties’ premier location offers more than 10 golf courses within a 10 minute drive. Additionally, Myrtle Beach provides access to over 66 miles of pristine beaches publicly accessible year-round, less than 5 miles south.
ENTERTAINMENT
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Eateries Within 3 Miles of Property
Of Pristine Beach Minutes Away
McLeod Health Seacoast is located just blocks from the property. The 118-bed acute care facility is part of Mcleod Health, the region’s largest healthcare team. The award-winning center includes a 24/7 emergency room, oncology department, dedicated rehabilitation program, and a variety of other healthcare services.
HEALTHCARE
The property benefits from access to Myrtle Beach’s premier shopping destinations with Tanger Outlets and Barefoot Landing less than 20 minutes west. Coastal North Town Center, 3 miles southwest, features several national retailers including Publix and DICK’S. A Food Lion, Walmart, and Home Depot are also within 5 minutes.
SHOPPING
DINING
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Myrtle Beach offers a unique variety of dining experiences ranging from top rated chefs and fine dining, local cuisine with southern flare, and national favorites, accommodating all preferences. The property benefits from 30+ restaurants in a 5 mile radius.
The 40% population growth and national reputation as a top destination for relocation helped Myrtle Beach build strong market fundamentals. With affluent demographics, reputable higher education institutions, and significant rent and population growth projected to continue for several years. The community is well positioned to see direct benefit, represented by the submarket’s 32% rent growth projected through 2027.
% Receiving Higher Ed 54.9%
% Rental Households 44.0%
COMPELLING DEMOGRAPHICS & PROJECTED GROWTH
3-Mile Radius
Avergae HHI (2021) $78,081
% White Collar Pop. 59.8%
AREA DEMOGRAPHICS
$78K AVERAGE HHI & DOMINANT WHITE COLLAR EMPLOYMENT
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The immediate area surrounding the asset boasts strong demographics with high average household income ($78k), a highly-educated tenant base (55% receiving higher education), and a predominantly white-collar workforce (60%). These metrics combined with projected population growth of 22% by 2027 within 5 miles present an unprecedented opportunity to invest in a thriving pocket of Myrtle Beach.
Demographics Yield Attractive Fundamentals
MYRTLE BEACH RENT GROWTH
The market features desirable multifamily fundamentals with favorable historical and future demographic trends, highlighting the direct correlation with the upward growth trajectory of Myrtle Beach.
Founded in 1966, Horry Georgetown Technical College offers students over 70+ areas of study and is best known for their Marketing Operations and Hospitality Management programs.
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The Banks at Bridgewater provides residents convenient access to two nationally recognized higher education institutions; Coastal Carolina University and Horry Georgetown Technical College.
Located in Conway, with over 12,000+ under graduate and graduate students, CCU offers 100+ graduate degree programs, and recently ranked number 5 on the Best Value School’s List in the southern region by the US News & World Report.
COASTAL CAROLINA UNIVERSITY
HORRY GEORGETOWN TECHNICAL COLLEGE
Horry Georgetown Technical College
Horry Georgetown Technical College Culinary School
Coastal Carolina University
Tile Backsplash
AMENITIES AND UNIT FEATURES
White Shaker Cabinets
The Banks at Bridgewater presents interior finishes with incredible attention to detail and unmatched quality throughout its open floor plans and modern amenity package.
24 hour State of the Art Fitness Center
Dog Park and Walking Trails
Smart Lock Technology Kitchen Islands
Market’s Best-In-Class Assets
Granite Countertops
Resort Style Saltwater Pool & Sun Deck
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Energy Efficient Appliances
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Property Profile 9 Property Details 9 Unit Mix 9 Site Overview 9 Property Specifications 9 Floor Plans
The Banks at Bridgwater Myrtle Beach, SC The Banks at Bridgewater is a premier, Class A asset with 252 modern units. The property is situated on 18.97 acres offering 1, 2 and 3 bedroom units in ten 3-story residential buildings. COMMUNITY AMENITIES Unit Mix (As of August 2022) Business Center 24/7 Coffee Bar Bark Park 24/7 Fitness Center On Demand Yoga Studio Pool WalkingValetSunPickleSaltwaterResidentsTableLoungePoolBallCourtDeckTrashTrails Built-In Workspace Ceiling CeramicFansTile Backsplash Efficient Appliances Floor to Ceiling Windows Granite WasherWalk-InRainPatio/BalconyOversizeKitchenHardwoodCountertopsFlooringIslandsClosetsShowerHeadsCloset&DryerAppliances UNIT FEATURES Bed/Bath Avg SF #Units Rent/Unit Rent/SF 1BR/1BA 715 60 $1,660 $2.32 1BR/1BA 722 33 $1,711 $2.37 1BR/1BA 722 3 $1,875 $2.60 1BR/1BA 904 18 $1,925 $2.13 2BR/2BA 1040 90 $1,882 $1.81 2BR/2BA 1040 6 $2,000 $1.92 2BR/2BA 1087 24 $2,008 $1.85 3BR/2BA 1275 18 $2,333 $1.83 1,392 4 $2,332 All 1 Beds 747 114 $1,722 $2.31 All 2 Beds 1049 120 $1,913 $1.82 All 3 Beds 1275 18 $2,333 $1.83 Total / Avg 929 252 $1,857 $2.05 28 |
48% 2 BEDROOM 45% 1 BEDROOM 7% 3 BEDROOM | 29
Site Plan 30 |
Year Built 2022
Breezeways Open concrete breezeways and upper-level landings. Stairs are pressure-treated wood.
Fenestration Unit entry doors are paneled insulated steel. Windows are double hung in vinyl frames with insulated glass and half screens. Sliding glass doors open to patio/balcony.
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Electric / Gas Units are all electric and individually metered.
Total Parking Spaces 385
Plumbing PEX domestic supply and PVC waste lines. Units are equipped with 50-gallon electric water heater.
Water/Sewer Little River Water & Sewer
Site Density (Units/Acre) 13.25
PARKING
PROPERTY DETAILS
Parking Ratio 1.52 spaces per unit
Property Specifications
HVAC Individual forced-air systems with closetmounted electric furnace/blower and exterior pad-mounted condensing unit.
Number of Buildings 10 Residential buildings, clubhouse, 4 garage buildings, and maintenance shop with storage.
Life Safety Buildings are fully sprinklered. Units are equipped with hard-wired smoke detectors with battery back-up. Property served by 6 hydrants, and 12 hose connection bibs.
Electric Santee Cooper
Acres 18.97 acres
Structures Wood-frame buildings on concrete slabs with concrete plywood upper-level subfloors. Exteriors are brick and painted hardiplank.
Roof System Pitched with wood truss framing, architecturalstyle shingles. Gutters and downspouts on all buildings.
UTILITIES
Trash Removal GFL
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Floor Plans
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1BR - 1BA | 715 SF | Number of Units: 60 1BR - 1BA | 722 SF | Number of Units: 36 1BR - 1BA | 904 SF | Number of Units: 18
2BR - 2BA | 1040 SF | Number of Units: 96 2BR - 2BA | 1087 SF | Number of Units: 24 3BR - 2BA | 1275 SF | Number of Units: 18 Floor Plans
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Financial Analysis 9 Return on Investment Overview 9 Debt and Cash Flows 9 Pro Forma Projections 9 Rent Comps 9 Sale Comps 9 Sensitivity Analysis
Financial Overview Cap (Adjusted T12*) 4.2% Reversion Cap See Page 15 Expense Ratio (Adjusted T12*) 35% Occupancy (as of 8/29/22) 70% DSCR 1.56 Purchase Price $70,560,000 Hold Time 5 years Equity Required (LP) $37,700,000 Limited Partner Return See Page 15 OFFERING SUMMARY *normalized based on real estate tax expense and occupancy 38 |
Principal Balance $42,300,000 Loan to Value 60% Loan Type Private Interest Rate 5.3% Months of Interest Only Payments Full Term I/O Term (Years) 5 - 7 Years Fixed or Adjustable Fixed Prepayment Penalty Step Down DEBT FINANCING* *Subject to change before closing | 39
$7,234,547 53% 16% 4% 4% 4%
Forma
Contract Services $221,245 $878 $105,105 $417 $106,539 $109,233 $111,996 $114,828
Per Unit Year 1 Per Unit Year 2 Year 3 Year 4 Year 5
T-12
Administrative $67,161 $267 $71,244 $283 $72,216 $74,042 $75,915 $77,835
Repairs & Maintenance $12,090 $48 $50,400 $200 $51,088 $52,380 $53,704 $55,062
EFFECTIVE GROSS INCOME $3,645,291 $14,465 $5,591,197 $22,187 $6,498,598 $6,743,914 $6,989,231
Utilities $174,359 $692 $177,120 $703 $179,537 $184,077 $188,732 $193,505
Turnover $0 $0 $53,338 $212 $54,065 $55,433 $56,834 $58,272
INCOME
Concessions/Non-Rev -$81,548 -$324 -$55,976 -$222 -$24,646 -$25,610 -$26,575 -$27,540
Marketing $165,229 $656 $63,000 $250 $63,860 $65,475 $67,130 $68,828
Insurance $90,255 $358 $201,600 $800 $204,351 $209,519 $214,817 $220,249
Replacement Reserves
Bad Debt -$45,384 -$180 -$27,837 -$110 -$6,130 -$6,370 -$6,610 -$6,850
Gross Potential Rent $5,647,276 $22,410 $5,845,131 $23,195 $6,210,671 $6,453,829 $6,696,988 $6,940,146
Other Income $530,188 $2,104 $571,732 $2,269 $629,236 $644,757 $660,278 $675,799 Loss to Lease -$657,274 -$2,608 -$364,339 -$1,446 $0 $0 $0 $0
OPERATING EXPENSES
Payroll $403,873 $1,603 $333,900 $1,325 $338,456 $347,015 $355,791 $364,788
Management Fee $101,214 $402 $139,780 $555 $162,465 $168,598 $174,731 $180,864 $31,307 $124 $695,626 $2,760 $703,208 $717,402 $731,882 $746,655 $63,000 $250 $63,000 $250 $63,000 $63,000 $63,000 $63,000
Pro Projections
Property Taxes
Vacancy Loss -$1,747,966 -$6,936 -$377,514 -$1,498 -$310,534 -$322,691 -$334,849 -$347,007
TOTAL OPERATING EXPENSES $1,329,733 $5,277 $1,954,112 $7,754 $1,998,785 $2,046,174 $2,094,533 $2,143,886 % of EGI 36% 35% 31% 30% 30% 30% NET OPERATING INCOME $2,315,557 $9,189 $3,637,084 $14,433 $4,499,813 $4,697,741 $4,894,698 $5,090,661 YoY Increase 57% 24% 4% 4% 4% 40 |
Rent Comps Building Name Address Units Stories YearBuilt Avg SF Mi. Away Rent/SFAvg. Rent/Avg.Unit 1 Bed 2 Bed 3 Bed The Banks at Bridgewater 719 Lantern Walk Dr 252 3 2022 929 - $2.05 $1,857 $1,722 $1,913 $2,333 Stepping Stone at Bridgewater 943 Lilyturf Cir 44 1 2021 1,299 < 1 $1.81 $2,350 $2,350 Seaglass Cottages 2314 Doveshell Dr 253 2 2020 947 7.1 $2.22 $2,105 $1,743 $2,136 $2,344 The Lively ay Grande Dunes 1139 Bragg Way 322 4 2022 834 11.5 $2.40 $2,006 $1,831 $2,086 $2,538 Proximity Pointe 2325 Old Sanders Dr 54 3 2021 1,018 2.9 $1.41 $1,435 $1,357 $1,485 River Oaks Village 119 River Village Dr 190 1 2018 1,147 2.5 $1.72 $1,970 $1,966 $2,649 | 41
Pending Coastal Exchange 300 2022 $84,900,000 $283,000
Sales Comps
Pending The Banks at Bridgewater 252 2022 $70,560,000 $280,000
June 2022 The Laurent at Carolina Forest 305 2017 $75,600,000 $247,869
Property Name Number Of Units
Year Built Sale Price Price Per Unit
Sale Date
Feb 2022 The Palmer at Carolina Forest 48 2020 $21,600,000 $450,000
Jan 2022 Proximity Pointe 54 2021 $11,960,000 $221,481
Dec 2021 River Oaks Village 190 2018 $48,500,000 $255,263
Criteria: Within 15 Miles of The Banks at Bridgewater and sold within the last 12 months.
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Pending Stepping Stone at Bridgewater 44 2021 $13,420,000 $305,000
Dec 2021 Lewis Grand Apartments 332 2019 $76,030,000 $229,006
Break Even Occupancy* Cap Rate Analysis Sensitivity Analysis 95% $6,498,598 $4,242,593 85% $5,863,126 $4,226,707 75% $5,227,653 $4,210,820 65% $4,592,181 $4,194,933 60% $4,274,445 $4,186,990 55% $3,956,709 $4,179,046 GROSS INCOMEOCCUPANCY TOTAL EXPENSES 5.0% 12.2% 4.6% 14.4% 4.4% 15.5% 4.2% 16.7% 4.0% 18.0% IRRCAP RATE *Break Even Calculated After Stabilization | 43
Market Overview 9 Myrtle Beach By The Numbers 9 Myrtle Beach, SC - The Grand Strand 9 Horry County’s Focus on Economic Growth 9 Healthcare Burgeoning Economic Driver
Myrtle BeachBy the Numbers Awards & Accolades Population (2022) 531,000 Unemployment Rate (Mar-22) 4.4% Cost of Living Index 100% Cost of Business Index 82% Moody’s Cycle Phase Recovery Key Industries: Tourism, Logistics Primary Growth Sectors: Healthcare 2021, #1 US Destination for Hotel Revenue Recovery 2021 – CoStar 2021, #1 Fastest Growing City In US – US News & World Report 2021, 3rd Most Popular Summer Destination – TripAdvisor 2021, 3rd Top City Job Seekers Are Flocking To – Realtor 2021, 6th Most Desirable Places to Live in US – Yahoo! 2018, Top 6 Most Excellent Cities for Experiences, TripAdvisor 2018, #9 America’s Best Small Cities, Resonance Consultancy 2018, Best Places People are Moving to, US News & World Report 2018, #7 Best US Golf Destination, Yahoo! Travel Top 10 2017, #2 Best Beaches in America, Travel Channel 2017, #1 Best U.S. Gold Destination, Golf.com Reader’s Choice Awards 2017, Top 25 Best Bang for Your Buck Spots for July 4th, Priceline. com 2017, Best Family Vacations In The USA, U.S. News & World Report, 2017, Top 10 Most Group-Friendly Beach Cities Across The U.S., Hotelplanner.com 2017, Top 25 Best Beaches in America, Thrillist 46 |
BOOMING RETIREMENT DESTINATION
demand for health services will drive strong job gains in healthcare, forecasted by Moody’s to grow at approximately double the national rate during the next decade. Moody’s also forecasts overall population gains in Myrtle Beach to be three times greater than the national average, which will support above-average growth in other service-based industries.
The features that make the metro area a prime tourist destination also make it an ideal place to retire. Residents age 65 and older account for nearly a quarter of Myrtle Beach’s Increasingpopulation.
Myrtle Beach, a world-famous tourist destination, is home to thousands of new residents each year, and the Myrtle Beach MSA ranked as the third fastest growing metro in the nation according to the U.S. Census Bureau, from 2010 to 2018.
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Strategically located in northeast South Carolina between Charleston and Wilmington, NC, the coastal resort city serves as a hub of the Grand Strand, a complex of beach towns and barrier islands stretching 60 miles from Little River to Georgetown, SC.
The airport, which will soon begin construction on a $60M gate expansion, is on pace to receive a record number of passengers this year. Further, the addition of more Allegiant Air flights since 2013 has extended the city’s reach into new markets.
Myrtle Beach is the heart of South Carolina’s booming $24B tourism industry, which has helped fuel the growth of the area’s permanent population. The city is home to Myrtle Waves, one of the largest water parks on the eastern seaboard, the Carolina Opry, the Myrtle Beach Boardwalk, U.S. Myrtle Beach State Park, Hard Rock Park, and more than 90 golf courses. Per the SC Department of Parks Recreation & Tourism, golf generates more income than any other recreational activity in the state.
The region hosts 14M visitors annually. Since 2009, the number of tourists visiting Myrtle Beach has risen significantly, many are traveling from farther away, increasing traffic at Myrtle Beach International Airport.
Myrtle Beach, SC - The Grand Strand
• 2018: Top Golf built a new 38,382 SF building on 29th Avenue in late 2018. Top Golf has 30 venues nationally.
Barefoot Landing
1,500
HTC Communications 684
Myrtle Beach National 980 Sands Oceanfront Resorts 500
The 460-acre International Technology & Aerospace Park (ITAP), located on the former Myrtle Beach AFB adjacent to the airport, was developed as a future base for aerospace industries. The Myrtle Beach Regional Economic Development Corporation is currently focused on attracting corporate headquarters to ITAP and other development-ready sites.
• 2022: DC Blox, a software company founded in 2014 is investing $31.5M to expand its presence.
Blue Cross/Blue Shield 837 Bi-Lo Stores 468
• 2020: Global Metal Powders, Inc is investing $1.5M, creating 15 new jobs.
RECENT ECONOMIC NEWS
Top Golf
Grand
1,400
• 2018: Aviation announcements include a Delta Flight from China to Myrtle Beach (Started Summer 2018), and Frontier Flight from Denver, Long Island, and Trenton (seasonal service).
1,582
Conway Medical Center Lowe’s Building Supply 603 Strand Medical Center Kingston Plantation 550
Coastal Carolina University Wyndham Vacation Ownership 650
Progress Energy Co. 1,000 Novant Medical 500 Lion Stores 1,000 Brunswick College 999
• 2018: Barefoot Landing is developing a new 20,000 SF restaurant district called Dockside Village, and will feature waterfront dining as well as outdoor attractions and live music.
Strategically located in the Southeast’s Aviation Corridor, Horry County is a prime location for businesses in the aerospace and aviation industry and is home to the Pittsburgh Institute of Aeronautics Myrtle Beach campus.
• 2020: Skutchi Designs, Inc is investing $3.5M, creating 41 new jobs.
Stores Inc. 2,623 Loris Health Care 680
National Golf Management 800 Ocean Lakes Family Camp ground 450
EMPLOYER JOBS PRODUCT/SERVICE JOBS
Wal-Mart
• 2021: Wild West of Myrtle Beach, Inc is investing $2.5M, creating 40 new jobs.
Horry County’s Focus on Economic Growth
Food
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McLeod Health Systems broke ground in 2015 on Phase I of the 43-acre McLeod Seacoast Carolina Forest campus on International Drive. The $20M Phase I of the development includes an emergency center, medical office, physical therapy and rehabilitation services, and medical specialists.
Three outstanding hospital systems serve the Myrtle Beach region: Grand Strand Regional Medical Center, Tidelands Georgetown Memorial Hospital, and McLeod Loris Health.
Healthcare: Burgeoning Economic Driver
The Joint Commission Tidelands Georgetown Memorial Hospital is a 131-bed advanced primary stroke center, an accredited chest pain center, and a Joint Commission-certified joint replacement center. Conway Medical Center recently opened two new surgical suites at its 210-bed inpatient facility.
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Portfolio & Case Studies 9 Assets Under Management 9 Case Studies 9 High-yield dispositions
PassiveInvesting.com Assets Under Management
Bluewater at Bolton’s Landing Charleston, SC 2019 21-Sept $108,000,000 350
Braxton Waterleigh Orlando, FL 2021 21-July $103,000,000 354
Las Palmas Fort Myers, FL 2020 22-Feb $114,000,000 300
Townes at McCullough Charlotte, NC 2021 22-Aug $25,575,000 66
29 North Hickory, NC 2013 21-Dec $21,400,000 101
Mariner Grove Savannah, GA 2016 22-June $96,250,000 320
Riverside Flats at Aberfoyle Village Charlotte, NC 2019 20-Dec $34,000,000 102
Leland Station Wilmington, NC 2020 21-Dec $36,800,000 120
The Hudson Cane Bay Charleston, SC 2021 21-Nov $87,500,000 300
Monterosso Orlando, FL 2019 21-May $55,230,000 216
PROPERTY MARKET BUILT ACQUISITIONDATE VALUATION UNITS
Braxton at Woods Lake Greenville, SC 1997 21-June $35,700,000 232
Braxton at Lake Norman Charlotte, NC 2014 20-May $78,500,000 232 TOTAL $957,899,000 3,280
Braxton at Tamarron Houston, TX 2021 21-Dec $84,300,000 351
Accent Edgewood Nashville, TN 2022 22-May $77,644,000 236
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PROPERTY DETAILS
Townes at McCullough is a 66-unit, class A townhome community located in the Pineville area of the Charlotte, North Carolina MSA. With two- and three-bedroom townhome units, the property features luxury Class A finishes and curated amenities catering to the growing rent-by-choice crowd seeking alternatives to traditional apartments. Townes at McCullough is perfectly positioned in Pineville’s high barrier to entry micro location within the rapidly growing South Charlotte submarket. Nestled between Interstate 77 and Interstate 485, residents benefit from the convenient access to an abundance of job opportunities and economic demand drivers throughout Ballantyne and the Charlotte MSA.
Property closed August 2022. Projected annual CoC returns of 5.1% and an IRR of 13.8% over a 7-year hold.
PROPERTY DETAILS
Property closed June 2022. Projected annual CoC returns of 9% (class a) and 5.6% (class b) and an IRR of 18.5% (class b) over a 5-year hold.
CLASS A CONSTRUCTED 2021 LOCATION Charlotte, NC UNITS 66 STRUCTURE Lead KP/GP CLASS A CONSTRUCTED 2016 LOCATION Savannah, GA UNITS 320 STRUCTURE Lead KP/GP
Townes at McCullough
Mariner Grove
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Mariner Grove is a 320-unit luxury apartment community located in Savannah, Chatham County, Georgia. The property is strategically located near Downtown Savannah, Eastern Wharf, Port of Savannah, Tybee Island and Savannah Proper, providing great access to major economic drivers as well as top entertainment hubs. Savannah’s exceptional job market, growing industrial sectors and continued population growth support Mariner Grove as a premier asset with boundless upside. Built in 2016, each unit at Mariner Grove is thoughtfully elegant with sophisticated interiors attracting an affluent resident profile. The contemporary interiors are complete with luxury finishes and oversized floor plans giving the property a competitive advantage in the Savannah market.
Property closed February 2022. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 18.5% (class b) over a 5-year hold.
Las Palmas
STRUCTURE Lead KP/GP
Property closed May 2022. Projected annual CoC returns of 9% (class a) and 6.2% (class b) and an IRR of 18.8% (class b) over a 5-year hold.
CLASS A CONSTRUCTED 2022 LOCATION Nashville, TN 236
Accent Edgewood is a soon-to-be completed, Class A, mid-rise multifamily community. The development contains 236 modern multifamily units on the southeastern edge of Wedgewood Houston (“WeHo”), a rapidly growing entertainment hub located five minutes south of downtown Nashville, Tennessee. Wedgewood-Houston is emerging as the city’s next great live-work-play neighborhood. The property is ideally situated near many completed, transformative mixed-use development projects including May Hosiery, the Nashville Warehouse Company, The Finery, and the Nashville Fairgrounds, home of the future Nashville Soccer Club MLS stadium.
Las Palmas is a brand new, institutional grade, Class A asset located in Fort Myers, Florida. The property includes garden style apartments as well as town homes with attached two-car garages with driveway and spacious patios. Each unit features modern amenities and finishes that you would expect in a brand new property. Twenty-two percent of the units include den/home office space, perfect for the work from home lifestyle. The property is situated in beautiful Fort Myers, less than two miles from the Gulf Coast Town Center - a 1.2 million SF Target-anchored power center. The surrounding affluent community has average home values of $850,000+.
Braxton Music City
PROPERTY DETAILS
STRUCTURE Lead KP/GP
CLASS A CONSTRUCTED 2020 LOCATION Ft. Myers, FL UNITS 300
UNITS
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PROPERTY DETAILS
CLASS A CONSTRUCTED 2020 LOCATION Wilmington, NC UNITS 120
Leland Station
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The asset is a 120-unit, 2020-construction, Class A multifamily community located in rapidly growing Leland, NC. Delivered in 2020, Leland Station represents one of the newest apartment communities in the market and features top-of-market interior finish quality with tech-friendly options and a fully stacked amenity set. Consisting of carriage homes with private entry garages, Leland Station offers a differentiated product type in this market. The property features one and two bedroom apartment homes ranging from 780-square-feet to 1,319-square-feet.
Property closed December 2021. Projected annual CoC returns of 9% (class a) and 6.8% (class b) and an IRR of 17.4% (class b) over a 5-year hold.
CLASS B+ CONSTRUCTED 2013 LOCATION Hickory, NC UNITS 101
29 North
STRUCTURE Lead KP/GP
The asset features 101 apartments in peaceful, desirable Northwest Hickory. The property features one, two and three bedroom apartment homes ranging from 715-square-feet to 1,308-square-feet. The property is conveniently located in the heart of Hickory and offers residents convenient access to multiple economic demand drivers, retail, and job opportunities. Additionally, Hickory has seen an impressive year over year rent growth of 10%+ as well as positive multifamily fundamentals, which positions the property for growth for years to come.
PROPERTY DETAILS
Property closed December 2021. Projected annual CoC returns of 9% (class a) and 7% (class b) and an IRR of 17.4% (class b) over a 5-year hold.
STRUCTURE Lead KP/GP
PROPERTY DETAILS
UNITS 300
Braxton at Tamarron
CLASS A CONSTRUCTED 2021 LOCATION Charleston, SC
PROPERTY DETAILS
The asset is a 351-unit luxury, garden apartment community located in Katy, an affluent, flourishing submarket of the Houston, TX MSA. The asset offers residents an array of high-end amenities thoughtfully designed with tranquility in mind. The Katy submarket has seen rapid growth over the past year with market leading absorption in paving the way for impressive rent growth. Katy is also home to 11,000+ companies and 200+ corporate headquarters. In addition, the property is situated in the acclaimed Tamarron master-planned community with plans for 4,000+ homes on 1,531 acres.
STRUCTURE Lead KP/GP
PROPERTY DETAILS
The asset is a 300-unit, 3-story garden apartment community located in Charleston’s premier Summerville submarket. With its rapidly expanding economy, outstanding demographics, business-friendly economic environment, and world-class lifestyle amenities, Charleston has garnered national recognition that has further stimulated investment capital flows into the market. The property’s highly convenient location, modern design and best-in-class finish and amenity set differentiate the asset from its competitors and serve to indulge a highly affluent and educated resident base in search of the submarket’s optimal living environment.
The Hudson Cane Bay
STRUCTURE Lead KP/GP
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Property closed December 2021. Projected annual CoC returns of 9% (class a) and 7.4% (class b) and an IRR of 19.5% (class b) over a 5-year hold.
Property closed November 2021. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 17.6% (class b) over a 5-year hold.
CLASS A CONSTRUCTED 2020 LOCATION Houston, TX UNITS 351
UNITS 350
CLASS A CONSTRUCTED 2021 LOCATION Orlando, FL UNITS 354
Bluewater at Bolton’s Landing
Property closed July 2021. Projected annual CoC returns of 9% (class a) and 6.9% (class b) and an IRR of 19.1% (class b) over a 5-year hold.
STRUCTURE Lead KP/GP
PROPERTY DETAILS
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This asset is located in the highly sought-after West Ashley submarket of the Charleston MSA. Completed in 2019, this true, Class A community was thoughtfully designed with stately architecture, quality floor plans and a serene landscape making it one of the premier communities in Charleston. Bluewater at Bolton’s Landing is situated in the heart of West Ashley which boasts stellar demographics and is in close proximity to major employers and medical jobs. The property also is minutes from the excitement of downtown Charleston and Folly Beach, James Island, Johns Island, and Kiawah Islands.
Property closed September 2021. Projected annual CoC returns of 9% (class a) and 7.3% (class b) and an IRR of 18.4% (class b) over a 5-year hold.
PROPERTY DETAILS
This asset is located in the rapidly growing Horizon West community of Winter Garden, which boasts stellar demographics and is home to notable whitecollar employers and medical jobs. The Orlando MSA was one of the top investment markets prior to the COVID-19 pandemic and is rapidly making its way back to the top with strong job gains and overall population growth that ranked #3 in the country for 2020. Ascend Waterleigh is a thoughtfully designed, low density community complete with spacious one-, two, and three-bedroom apartments with convenient access to white-collar employment and major Orlando thoroughfares.
Braxton Waterleigh
CLASS A CONSTRUCTED 2019 LOCATION Charleston, SC
STRUCTURE Lead KP/GP
PROPERTY DETAILS
The asset is centrally located in the highly desirable Upstate region of South Carolina in the Central Greenville submarket. The property is located in the heart of the Upstate’s burgeoning “Industry Triangle” as five of the county’s eight largest employers (10,500+) are within three miles of the property. The property is a 1997 vintage, partially-renovated over the past 7 years, institutional-quality asset with significant opportunity for modernized interior renovations and exterior renovations. The business plan is to capitalize on improving the existing operational inefficiencies, complete renovating the unit interiors with modern upfits, and to improve the common areas while still maintaining competitive rental rates.
PROPERTY DETAILS
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Property closed May 2021. Projected annual CoC returns of 9% (class a) and 6.7% (class b) and an IRR of 16.1% (class b) over a 5-year hold.
Property closed June 2021. Projected annual CoC returns of 9% (class a) and 7.1% (class b) and an IRR of 18.9% (class b) over a 5-year hold.
CLASS B+ CONSTRUCTED 1997 LOCATION Greenville, SC UNITS 232
Braxton at Woods Lake
STRUCTURE Lead KP/GP
The asset is situated in the Southwest submarket of the Orlando MSA in the prominent Orlando suburb of Kissimmee. The property benefits from best-in-class amenities, rock solid submarket fundamentals and a central location making it the ideal apartment community for a variety of residents. Located near the Loop in Kissimmee, Monterosso is just minutes away from all of the shopping, dining, and entertainment that nearby Orlando has to offer. The property is only 20 minutes from Disney Springs, Orlando’s best theme parks, Orlando International Airport, The Florida Mall and The Mall at Millenia.
CLASS A CONSTRUCTED 2019 LOCATION Orlando, FL UNITS 216
STRUCTURE Lead KP/GP
Monterosso
CLASS A CONSTRUCTED 2014 LOCATION Charlotte, NC
UNITS 102
PROPERTY DETAILS
CLASS A CONSTRUCTED 2019 LOCATION Charlotte, NC
The asset enjoys one of the most unique locations across the Charlotte metro, located minutes from the Charlotte-Douglas International Airport, with immediate access to I-85 and Highway 74 that provide direct access to Uptown Charlotte (135,000+ jobs). The immediate area is positioned along a path of progress in Belmont, a suburb defined by high incomes, impressive schools, and unparalleled quality of life. The historically under served submarket has witness outsized multifamily rent growth in recent years and is projecting 18% growth through 2024, while occupancy levels remain at market leading levels.
Riverside Flats at Aberfoyle Village
STRUCTURE Lead KP/GP
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PROPERTY DETAILS
This asset is located in Charlotte, NC and is a 232-unit surface parked garden community completed in 2014. Surrounded by lush, mature landscaping and North Carolina’s largest man-made lake, Lake Norman, the property benefits from impressive resident demographics and strong operational metrics. The business plan includes Improving operations with new management team, painting the exterior of the buildings and upgrading the current Internet services to a service called Gigafy.
Property closed May 2020. Projected annual CoC returns of 9% (class a) and 7.3%(class b) and an IRR of 13.1%(class b) over a 7-year hold.
UNITS 232
STRUCTURE Lead KP/GP
Property closed December 2020. Projected annual CoC returns of 9% (class a) and 7.9% (class b) and an IRR of 13.7% (class b) over a 7-year hold.
Braxton at Lake Norman
PassiveInvesting.com High-Yield Dispositions
Emory Cove Knoxville, TN 76% 43 Months 27.57% 23.44% 1.99x
Orchard Park Greenville, SC 74% 27 Months 29.10% 26.40% 1.65x
Willowbrook Greenville, SC 56% 31 Months 22.90% 19.20% 1.59x
Braxton Cary Weston Cary, NC 27% 14 Months 34.49% 34.47% 1.40x
Villas at Fort Mill Charlotte, NC 44% 21 Months 32.78% 32.40% 1.60x
Braxton at Brier Creek Raleigh, NC 55% 25 Months 42.50% 33.30% 1.89x
Property Market Increase Valuationin Hold Period COC IRR MultipleEquity
Pines on Wendover Charlotte, NC 66% 26 Months 19.50% 18.66% 1.42x 2207 North Greenville, SC 53% 30 Months 22.70% 21.00% 1.57x
Increase in Valuation Annual Return IRR 56% 28.9% 26.1% AVERAGE RETURNS 1.64x Equity Multiple 60 |
SOLDSOLDSOLDSOLD
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Index 9 Property Management 9 Real Estate Terms & Definitions 9 Sponsorship / Management Team
Full Service Property Management FCA Management manages over 5,200+ units in Texas and the Southeast. FCA Partners has 25+ years of management experience. FCA Partners provides quality daily management services that are focused on property operations, increasing asset value, timely and accurate reporting, and clear communication. 64 |
◊ When selling income property, the lower the Cap Rate the better.
Real Estate Terms & Definitions
» Return on Equity (ROE) – The amount of net income returned as a percentage of shareholders equity.
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◊ ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder’s Equity
» Capitalization Rate (Cap Rate) – A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor’s potential return on his or her investment. This is done by dividing the income the property will generate (after fixed costs and variable costs) by the total value of the property.
» Cash Flow – Cash generated from the operations of a company, generally defined as revenues less all operating expenses.
» Investor Average Annual Return, including disposition – The average return per year including profits from disposition.
» Cash-on-Cash – A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested.
» Debt Service Coverage Ratio (DSCR) – It is the multiples of cash flow available to meet annual interest and principal payments on debt. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.
◊ Calculated: Annual Dollar Income Return / Total Equity Invested = Cash-on-Cash
» Investor Average Annual Return, excluding disposition – The average return per year during the investment hold. This calculation does not include the return of invested capital.
◊ When acquiring income property, the higher the capitalization rate (“Cap Rate”), the better.
◊ A higher cap rate implies a lower price, a lower cap rate implies a higher price.
» Internal Rate of Return (IRR) – The rate of return that would make the present value of future cash flows plus the final market value of an investment opportunity equal the current market price of the investment or opportunity. The higher a project’s internal rate of return, the more desirable it is to undertake the project.
Sponsorship / Management Team The PassiveInvesting.com Team has been investing in commercial real estate assets since 2013 with a portfolio of over $1.3 Billion in acquisitions. MANAGING PARTNERSDANNYRANDAZZO Financial danny@passiveinvesting.comLead CHRIS LARSEN Co-GP & Managing chris@nextlevelincome.comPartner BRANDON ABBOTT Acquisitions brandon@passiveinvesting.comLead DAN HANDFORD Investor Relations dan@passiveinvesting.comLead
TAO BRODY DIRECTOR,
MARKETS
DIRECTOR, ACQUISITIONS
SUSIE
ERIC FITZGERALD
WHITNEY
CU INVESTOR RELATIONS ASSOCIATE MARCO TRIPALO INVESTOR RELATIONS ASSOCIATE RYAN THORSEN ACQUISTIONS ANALYST
HUTTEN DIRECTOR, INVESTOR EDUCATION
CHRIS NEARY
PR
INVESTOR RELATIONS
ED GILMER DIRECTOR, CAPITAL
DEDICATED TEAM OF EXPERTS
BRIAN BORNHORST
FINANCE
TAYLOR
WHITTINGTON DIRECTOR, HUMAN RESOURCES WALTER PARKER ACQUISTIONS ASSOCIATE HUBERT YANG ACQUISTIONS ANALYST ALEXANDRA CANN ACQUISTIONS SUPPORT HANNAH ALLISON EVENT MANAGER STACEY FOSTER ADMINISTRATIVE SPECIALIST JD RYE ASSOCIATE CONTROLLER TALIA AFOA MARKETING ASSOCIATE MISTY CRAPS PROJECT MANAGER ASPEN MORGAN INVESTOR SERVICES SUPPORT CHRISTINA RUBENSTEIN FINANCE ASSOCIATE EMILY MOONEYHAM INVESTOR SERVICES SUPPORT | 67
ANDREW DAVIS DIRECTOR,
MELISSA BROOM DIRECTOR, MARKETING &
SENIOR ACQUISITIONS
DIRECTOR, ASSET MANAGEMENT
