Bruce Teitelbaum Jeffrey Wong VR Development 2800 River Road Suite 190 Des Plaines, IL 60018
Artist Rendering Depiction Exterior Style
Table of Contents
❑
Section I
Executive Summary ➢ Project Overview ➢ Project Highlights
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Section II
Location ➢ ➢ ➢ ➢
Location Features Maps & Site Aerial Driving Proximity Neighbors and Views
❑
Section III
Development Proforma
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Section IV Product Presentation ➢ Site Plan ➢ The Vistas Community Features ➢ 3D Renderings ➢ Floor Plans
❑
Section V
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Section VI Team Introduction ➢ General Partner Profiles ➢ Construction Project Management Team
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Under Separate Cover
Market Information ➢ Market Overview ➢ Comparables Research ➢ Market Data
➢ ➢ ➢ ➢
Land Acquisition Summary & Contracts Limited Partnership Agreement LLC Documentation Financial Model
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Section I Executive Summary -Project Overview -Project Highlights -Key Proforma Figures
Artist Rendering Depiction Private Rooftop Terrace
Development Overview:
Artist Rendering Depiction of Private Rooftop Terraces
The Vistas of Arcadia is a proposed luxury rental townhome community located in the affluent Arcadia neighborhood of Phoenix, Arizona. The Vistas is a “Shovel Ready” project with city zoning and plat approval in place whereby horizontal construction will commence immediately upon closing.
Each of the 40 townhomes are 3-4BRs with 2.5-3.5 baths and will include attached private 2 car garages and private rooftop terraces many of which will have open views of Camelback Mountain and Piestewa Peak. There are three model styles from approximately 1,800 to 2,180 square feet of indoor living space with an approximate community average of 2,000 square feet per unit.
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Development Highlights: › Infill site in Arcadia neighborhood of Phoenix, one of the most desirable neighborhoods in all of Phoenix
› Standout Features – private rooftop
terraces with adjacent family room with many units boasting skyline or mountain views
› Demand is high for new product with low new construction supply (and low existing inventory)
› Demand exceeds new construction units slated to come on line
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Project Overview The Vistas is a 40-unit townhome development in Scottsdale, Arizona. The development features a premium location adjacent to Biltmore and Arcadia with renowned retail, entertainment, and food & beverage of options. The community is planned to include pool and other common area amenities, providing residents a sense of community. The amenities and unit design will be commensurate with high end, luxury residences buyers at this price point have come to expect including private, on-site resident garages, a large community pool and grill entertainment area. The project is being developed by General Partner, Bruce Teitelbaum and General Partner Jeffrey Wong. Mr. Teitelbaum has been in commercial real estate for 43 years and has been involved in over 500 transactions, the majority as a general partner or owner, with one or two partners. These developments, transactions or investments span across almost all real estate asset classes including retail, office, multi-family and senior care. Jeffrey Wong is a residential development veteran of over 20 years. As a principal Mr. Wong has overseen approximately $80M in residential development and sales. Mr. Wong is experienced in land entitlement, horizontal land development, and new construction development in luxury single family, multifamily townhouse, resort condo and office asset types. 6
Investment Strengths
Arcadia / Biltmore – Prime Locations in Established Affluent Markets
Shovel Ready – Construction will commence upon closing with zoning in place
Experienced Team – Principals with a combined 65 years real estate experience Artist Rendering Depiction Exterior Style
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‘Shovel Ready’ --Plat will be approved prior to closing---NO zoning Risk--Construction will commence immediately upon closing – expedited speed to lease up and sale. -Tremendous advantage of speed to completion affords us the confidence that the rental market will remain underserved with an expected 20% rent growth projected for 2022. -Cuts one to two years off the expected Phoenix development cycle.
No Zoning Risk 8
Key Proforma Figures
Sale / Costs
$36.1M – Sale ($903k/Unit or $450/SF) $7.5M – Land Acquisition $16.3M – Construction w/ 15% Contingency $28.1M – Funded Cost $29.2M – All in Cost
Net Profit
$6.9M – Net Profit* 24.5% Margin on Funded Costs $8.4M – Adjusted Net Profit*
Timeline Artist Rendering Depiction Common Area Pool Style
Projected Start August 2022 18-24 Months – From First to Last Certificate of Occupancy
*Expected unused Interest Reserve and half of oversized 15% Construction Contingency yields a Project Adjusted Net Profit of $8.1M
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Stabilized Rental Proforma $1.625M
Stabilized NOI
4.50%
Exit Cap Rate
$2.12/sf
Rent Per Sq. Ft.
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Development Team’s Scottsdale Project › Vistas of Arcadia is similar in scope to Vistas of Scottsdale, a 16 unit townhome development in nearby Scottsdale
› Development is under construction with completion expected January 2023
› Vistas of Scottsdale is ‘sold out’ › www.Vistas Of Scottsdale.com
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Section II Location
-Location Features -Maps & Site Aerial -Driving Proximity -Neighbors and Views
Artist Rendering Depiction Private Rooftop Terrace
Located at the highly desirable Arcadia neighborhood in Phoenix, Arizona.
Adjacent to affluent Biltmore Neighborhood with top rated shopping and restaurants
Downtown is only an 11 minute drive.
Scottsdale’s vibrant Old Town restaurants, shopping and night life is only 10 minutes away.
Within a 12 minute drive are the major Museums and cultural centers along with more than 80 art galleries. 13
4210, 4220 & 4248 North 32nd Street, Phoenix 85018 South of Camelback Road and North of Indian School Road on 32nd Street. Land is scarce in the Arcadia neighborhood of Phoenix and adjacent to a premier Biltmore neighborhood providing a significant barrier to new developments. The lack of new, high-end projects coupled with a scarcity of developable land make competition scarce in Arcadia. Combined this with the fact that Arcadia is a well established residential market makes the Vistas an opportunity with very clear and predictable exit pricing and sales velocity. Additionally Phoenix and Arcadia itself have some of the most advantageous demographics and appreciation levels in the entire nation. 14
Paradise Valley 5min
Camelback Mountain 9min
Biltmore Area 3min
Fashion Square / Old Town 10min
Papago Park / Phoenix Zoo 14min Downtown / Chase Field 11min Airport 9min
Tempe 13min
Camelback Views
New Construction Mixed Use
Downtown Phoenix Skyline Views Los Olivos Park
Yes, it’s that close Close to 'Everything' -Los Olivos Park - Walking -Echo Canyon Trailhead - 7 min -Piestewa Peak Trailhead - 8 min -Biltmore Country Club - 7 min -Phoenix International Airport - 9 min -Downtown - 10 min -Chase Field - 11 min -Golf courses - numerous within 10-20 min -Phoenix Zoo & Papago Park - 14 min Shopping and Food & Beverage -Arcadia Fiesta Shopping Center w/ Restaurants Walking or 1 min -Starbucks - Walking or 2 min -Biltmore Fashion Park Shopping & Restaurant District - 3 min -Town and Country Shopping Center - 4 min -Camelback Colonade - 4 min -Fountain Square Shopping Center - 10 min -Old Town Scottsdale (retail, F&B, nightlife) - 11 min Big Box Retail -Costco - 8 min -Target - 8 min -Home Depot - 5 min -Walmart Supercenter - 5 min
Top Hotels -Biltmore Waldorf Astoria - 8 min -The Phoenician - 9 min -JW Marriott Camelback - 11 min -W Scottsdale - 13 min -Downtown Hyatt Regency/Westin/Renaissance 11 min Culture Phoenix Art Museum - 12 min The Phoenix Theatre Company - 12 min Children’s Museum of Phoenix - 11 min Western Spirit Museum - 11 min Museum of Contemporary Art - 11 min Desert Botanical Garden - 14 min Nearby Cities -Paradise Valley - 5 min -Scottsdale - 9 min -Tempe - 13 min Top Private Schools Phoenix Country Day School - 4 min Xavier College Prep - 12 min Brophy College Prep - 15 min
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Biltmore Fashion Park Premier Shopping & Restaurant District Right around the corner, about a 3 minute drive is Biltmore Fashion Park Known as the "crown jewel" because of its regal history and unmatched ambiance, Biltmore Fashion Park is an outdoor shopping experience in a park-like setting and serves as home to some of the finest shopping in Arizona. Anchored by the state's only Saks Fifth Avenue, even the most sophisticated of shoppers can't resist the selection of high-end retailers including: Apple, M•A•C Cosmetics, J.Crew, lululemon athletica, Brooks Brothers, Escada, Jonathan Adler, Macy's, Pottery Barn, Ralph Lauren and Williams-Sonoma. …Delectable dining is around every corner at Biltmore Fashion Park with sensational restaurants like The Capital Grille, True Food Kitchen, Seasons 52 and Stingray Sushi. Biltmore Fashion Park is an unmatched shopping and dining experience that will leave you delighted and yearning to come back for more. –Trip Advisor
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Adjacent to Los Olivos Park
A great place to walk out your door and access outdoor activities. › Dog Park › Walking and Biking Paths › Two Playgrounds › Disc golf › Sand volleyball courts › Soccer fields › Covered seating area for grilling and eating › Great views of surrounding mountains
Other Nearby Parks: › Arcadia Park › Kachina Park › Madison Park › Steel Indian Park › Longview Park › Chaparral Park
Easy Access to Papago Park Papago Park is one of the most scenic and easily accessible desert areas in the Phoenix metro area. Explore its 1,500 acres filled with hiking and biking trails, picnic areas and lagoons. Papago Park is also home to attractions including the “Hole in the Rock” hike, Desert Botanical Garden, the Phoenix Zoo, two golf courses, and AZ Heritage Center at Papago Park.
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10 min. to Scottsdale Shopping & Culture Downtown and Old Town Scottsdale Shopping and Cultural District is between 2-3 miles from Vistas. The Downtown and Old Town Scottsdale shopping district is the premier shopping destination in all of Phoenix. It includes Fashion Square and Scottsdale Waterfront Malls as well as 5th Ave Shops of Scottsdale and Old Town Scottsdale. In the same area also are the Museum of the West and Scottsdale Museum of Contemporary Art. Fashion Square Mall is rated #1 for the Best Shopping Destination in Scottsdale: ‘Fashion Square is one of the largest and most upscale shopping malls in the entire Southwestern United States.’
New Neighbors Mixed Use Building across 32nd Street Currently Under Construction
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Section III Development Proforma
Artist Rendering Depiction of Interior Design & Style
PROFORMA SUMMARY Per Unit
TOTAL
Per SQ FT
% Of Sales
SALE
$36,120,000
$903,000 $450.27
100.0%
ACQUISITION CONSTRUCTION INDIRECT CONSTRUCTION DEVELOPMENT COSTS FINANCING
$7,837,500 $16,381,058 $370,000 $1,170,000 $2,340,000
$195,938 $97.70 $409,526 $204.21 $9,250 $4.61 $29,250 $14.59 $58,500 $29.17
21.7% 45.4% 1.0% 3.2% 6.5%
TOTAL FUNDING NEEDED
$28,098,558
$702,464 $350.28
77.8%
SALES COSTS
$1,131,774
TOTAL PROJECT ALL-IN COST
NET PROFIT ADJUSTED NET PROFIT
$29,230,331
$6,889,669 $8,390,562
$28,294
$14.11
3.1%
$730,758 $364.39
80.9%
$172,242
$85.89
19.1%
$209,764 $104.60
23.2%
25 All figures are projections and are not guaranteed.
PROFORMA DETAIL TOTAL REVENUES Gross Sales Revenue (40 Units)
% Of Sales
$36,120,000
$903,000 $450.27
100.0%
$903,000 $450.27
100.0%
Total Land
$7,500,000 $112,500 $225,000 $7,837,500
$14,224,231 $2,156,826 Total Construction $16,381,058
$187,500 $2,813 $5,625 $195,938
$93.50 $1.40 $2.80 $97.70
20.8% 0.3% 0.6% 21.7%
$355,606 $177.32 $53,921 $26.89 $409,526 $204.21
39.4% 6.0% 45.4%
Indirect Construction Cost Engineering and Architect Permit Costs Total Indirect Construction Cost
$70,000 $300,000 $370,000
$1,750 $7,500 $9,250
$0.87 $3.74 $4.61
0.2% 0.8% 1.0%
Development Soft Costs Attorney Legal Marketing Real Estate Taxes Accounting Developer Fee Working Capital/Misc Travel Total Development Soft Cost
$120,000 $10,000 $50,000 $25,000 $665,000 $250,000 $50,000 $1,170,000
$3,000 $250 $1,250 $625 $16,625 $6,250 $1,250 $29,250
$1.50 $0.12 $0.62 $0.31 $8.29 $3.12 $0.62 $14.59
0.3% 0.0% 0.1% 0.1% 1.8% 0.7% 0.1% 3.2%
Financing Cost Est. Interest Cost Financing - Origination Fee Financing - Commercial Mortgage Broker Fee Appraisal Fees & Bank Legal Total Financing Cost
$2,000,000 $185,000 $125,000 $30,000 $2,340,000
$50,000 $4,625 $3,125 $750 $58,500
$24.93 $2.31 $1.56 $0.37 $29.17
5.5% 0.5% 0.3% 0.1% 6.5%
$702,464 $350.28
77.8%
TOTAL FUNDING NEEDED
$28,098,558
Sales Costs Brokerage Commisssions Other Closing Costs Spec Sales Tax (5.2325% of Construction) Total Sales Costs TOTAL PROJECT ALL-IN COST
$126,420 $75,000 $930,354 $1,131,774 $29,230,331
NET PROFIT $6,889,669 Margin on Revenue Margin on Funded Costs Profit Margin / Unit
All figures are projections and are not guaranteed.
Per SQ FT
Total Revenue $36,120,000 Land Land Acquisition Assignment Cost (3rd Party) Acquisition Fee
Construction Construction Cost Budget Construction Contingency
Per Unit
$3,161 $1,875 $23,259 $28,294
$1.58 $0.93 $11.60 $14.11
0.4% 0.2% 2.6% 3.1%
$730,758 $364.39
80.9%
$172,242
19.1%
$85.89
19.1% 24.5% $172,242
Total Square Feet Total Cost / SqFt Total Revenue / SqFt Total Net / SqFt
80,218 $350.28 $450.27 $85.89
Unused Interest Reserve Unused Construction Contingency (half)
$422,480 $1,078,413
ADJUSTED NET PROFIT $8,390,562
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Old Town Scottsdale – 11 min drive
STABILIZED RENTAL PROFORMA Stabilized RENTAL INCOME Market Rent Solar / Other Tech Premium (None) GROSS POTENTIAL RENT (GPR)
Per Unit
% / NRI
$2,040,000 $0 $2,040,000
$51,000 $0 $51,000
106.4% 0.0% 106.4%
$102,000 $10,200 $10,200 $122,400
$2,550 $255 $255 $3,060
5.3% 0.5% 0.5% 6.4%
$1,917,600
$47,940
100.0%
$106,400 $16,000 $122,400
$2,660 $400 $3,060
5.5% 0.8% 6.4%
$2,040,000
$51,000
106.4%
EXPENSES Marketing Administration Repairs & Maintenance Turnover Contract Services
$13,200 $16,200 $16,000 $12,000 $23,500
CONTROLLABLE SUBTOTAL
$80,900
$330 $405 $400 $300 $588 $2,023
0.7% 0.8% 0.8% 0.6% 1.2% 4.2%
Water/Sewer (95% Recaptured) Electricity (95% Recaptured) Common - Trash Common - Electricity Utilities (Total)
$44,000 $68,000 $9,300 $5,400 $126,700
$1,100 $1,700 $233 $135 $3,168
2.3% 3.5% 0.5% 0.3% 6.6%
Management Fee (2.5% of GPR) Insurance Real Estate Taxes TOTAL OPERATING EXPENSES
$51,000 $19,000 $125,000 $195,000
$1,275 $475 $3,125 $4,875
2.7% 1.0% 6.5% 10.2%
Replacement Reserves TOTAL EXPENSES
$12,000 $414,600
$300 $10,365
0.6% 21.6%
$1,625,400
$40,635
84.8%
ECONOMIC LOSS Vacancy Loss (5%) Concessions (.05%) Other Rent Loss (.05%) Total Economic Loss NET RENTAL INCOME (NRI) OTHER INCOME Utility Reimbursement (Recapture) Other Income Total Other Income
TOTAL INCOME (EGI)
NET OPERATING INCOME
27 All figures are projections and are not guaranteed.
Cap Rate Sensitivity
NET OPERATING INCOME
$1,625,400
CAP RATE SENSITIVITY 3.75%
Valuation $43,344,000
$/Unit $1,083,600
$ PSF $540
4.00%
$40,635,000
$1,015,875
$507
4.25%
$38,244,706
$956,118
$477
4.50%
$36,120,000
$903,000
$450
4.75%
$34,218,947
$855,474
$427
5.00%
$32,508,000
$812,700
$405
Current CAP rates for newer construction multifamily sales in the Phoenix market are expected around 4% or even lower. Estimated at 4.5% exit CAP rate. 28 All figures are projections and are not guaranteed.
GROSS POTENTIAL RENT Building
Units
Building 1 Building 1 Mirror Building 2 Building 2 Mirror Building 3 Building 4 Building 5 Building 6 Building 7 Building 8 TTL PROJECT
Sq. Ft. 3 3 4 4 4 3 4 4 3 8
5,511 5,511 7,267 7,267 7,348 6,546 8,383 8,728 6,201 17,456
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TTL PROJECT UNIT AVERAGE
Rent/SF $ $ $ $ $ $ $ $ $ $
Monthly Rent
2.31 2.31 2.34 2.34 2.31 1.95 2.03 1.95 2.06 1.95
$12,750 $12,750 $17,000 $17,000 $17,000 $12,750 $17,000 $17,000 $12,750 $34,000
80,218
$2.12
$170,000
2,005
$2.12
$4,250
ANNUAL GROSS POTENTIAL RENT REVENUE
$2,040,000
29 All figures are projections and are not guaranteed.
RENT DETAIL Building
-2021 Phoenix rent growth was 28%. -2022 Phoenix rent growth is projected at 20%
Building 1
Building 1 Mirrored
Building 2
Building 2 Mirrored
-Vacancy rates as low as 3.8% (the lowest in 20 years) -Current market rent is approximately $2.00/sf. -Assumed average rent of only $2.12/sf
Building 3
Building 4
Building 5
Building 6
Building 7
Building 8
Unit
Type
SF
Rent/SF
Stabilized Monthly Rent
1 2 3
A A A
1,837 1,837 1,837 5,511
$ $ $ $
2.31 2.31 2.31 2.31
$4,250 $4,250 $4,250 $12,750
1 2 3
A A A
1,837 1,837 1,837 5,511
$ $ $ $
2.31 2.31 2.31 2.31
$4,250 $4,250 $4,250 $12,750
1 2 3 4
A A A B
1,837 1,837 1,837 1,756 7,267
$ $ $ $ $
2.31 2.31 2.31 2.42 2.34
$4,250 $4,250 $4,250 $4,250 $17,000
1 2 3 4
B A A A
1,756 1,837 1,837 1,837 7,267
$ $ $ $ $
2.42 2.31 2.31 2.31 2.34
$4,250 $4,250 $4,250 $4,250 $17,000
1 2 3 4
A A A A
1,837 1,837 1,837 1,837 7,348
$ $ $ $ $
2.31 2.31 2.31 2.31 2.31
$4,250 $4,250 $4,250 $4,250 $17,000
1 2 3
C C C
2,182 2,182 2,182 6,546
$ $ $ $
1.95 1.95 1.95 1.95
$4,250 $4,250 $4,250 $12,750
1 2 3 4
A C C C
1,837 2,182 2,182 2,182 8,383
$ $ $ $ $
2.31 1.95 1.95 1.95 2.03
$4,250 $4,250 $4,250 $4,250 $17,000
1 2 3 4
C C C C
2,182 2,182 2,182 2,182 8,728
$ $ $ $ $
1.95 1.95 1.95 1.95 1.95
$4,250 $4,250 $4,250 $4,250 $17,000
1 2 3
A C C
1,837 2,182 2,182 6,201
$ $ $ $
2.31 1.95 1.95 2.06
$4,250 $4,250 $4,250 $12,750
1 2 3 4 5 6 7 8
C C C C C C C C
2,182 2,182 2,182 2,182 2,182 2,182 2,182 2,182 17,456
$ $ $ $ $ $ $ $ $
1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95
$4,250 $4,250 $4,250 $4,250 $4,250 $4,250 $4,250 $4,250 $34,000
All figures are projections and are not guaranteed.
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CONSTRUCTION COST BUDGET Description of Work General Conditions Grading / Storm / Sewer Site & Building Concrete Masonry Metals Wood & Plastics Thermal and Moisture Protection Doors & Windows Finishes Flooring/Ceramics/Stone Painting Specialties Equipment HVAC Plumbing Fire Protection Electric Landscape Overhead / Fee SUB-TOTAL Contingency 15% TOTAL CONSTRUCTION COST
Total
$ / SF
$ / Unit
$663,000 $805,000 $442,705 $102,255 $664,080 $3,811,113 $1,287,213 $1,503,272 $538,945 $1,007,635 $384,960 $162,270 $363,306 $673,681 $1,215,033 $132,330 $769,921 $92,300 $842,102 $15,461,121
$8.26 $10.04 $5.52 $1.27 $8.28 $47.51 $16.05 $18.74 $6.72 $12.56 $4.80 $2.02 $4.53 $8.40 $15.15 $1.65 $9.60 $1.15 $10.50 $192.74
$16,575 $20,125 $11,068 $2,556 $16,602 $95,278 $32,180 $37,582 $13,474 $25,191 $9,624 $4,057 $9,083 $16,842 $30,376 $3,308 $19,248 $2,308 $21,053 $386,528
$2,319,168
$28.91
$57,979
$17,780,289
$221.65
$444,507
31 All figures are projections and are not guaranteed.
FRONT END COSTS COST DESCRIPTION
Amount
Legal: Attorney - Due Diligence/Development/Permit Attorney / Title - Purchase Docs & Closing Attorney - Partnership Docs Attorney - Condo Docs Legal Total
$60,000 $25,000 $20,000 $15,000 $120,000
Engineering and Architect: Engineering - Site Plan & Building Site & Soil Environmental (Already completed) Plat Amendments Architect (Amendments only) Engineering and Architect
$10,000 $0 $10,000 $50,000 $70,000
Permit Costs: Permit Fees - Building Permit Fees - Other Permit Costs Marketing: Supplemental Marketing Total
$250,000 $50,000 $300,000
$10,000
Financing: Financing - Commercial Financing Broker Fee Financing - Origination Fee Appraisal Fees & Bank Legal Lender Sourcing and Lender Costs
$125,000 $185,000 $30,000 $340,000
Acquisition Fee
$225,000
TOTAL FRONT END COSTS
$1,065,000
32 All figures are projections and are not guaranteed.
Section IV Product Presentation
-Site Plan -The Vistas Community Features -3D Renderings -Floor Plans
Artist Rendering Depiction of Interior Design & Style
Site Plan The Vistas of Arcadia is accessible from N. 32nd Street as well as a secondary access off of the adjacent public alley. Besides oversized 2 car garages, there is onsite guest parking.
Each home has their own private walk up townhome entrance. Amenities will be spread throughout the common area with a pool and outdoor shaded lounge area in the ‘Park’ area.
Mountain Views Each home in the Vistas of Arcadia will have a private rooftop terrace with views from OVER 40 feet high. Views to the North – Piestewa Peak Views to the NW – Camelback
Skyline Views All homes will have large Family Rooms with large glass double sliders opening to their private rooftop terrace. Views to the Southwest – Downtown Phoenix Skyline 35 Photos used on this page are for marketing purposes and are not a depiction of actual perspective of rooftop views.
Common Area Features The Vistas of Arcadia will consist of 40 residences featuring approximately 2,000 air-conditioned square feet. All residences will be three or four bedroom 4-story villas. The community is planned to include the following:
Community pool and a poolside entertainment area offering a place to gather and lounge.
Resort-like atmosphere with ‘hammock’ areas area shaded loggias in common pool and park area.
Mini Dog Park on Site along with putting greens amid lush landscaping spread throughout the common area grounds.
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Aerial 3D Rendering
38 Artist Rendering Depiction Exterior Style
High Design › The feel of a high end custom home ›
› ›
› › › › ›
without the cost - Highly efficient cost to value selections and design Durable and attractive Quartz Countertops Low Profile Ceiling Detail with Indirect Lighting Durable Engineered Hardwood Floors
Feature wall in Living Room Rooftop Terrace wall TV outlet Simple/Elegant Pergola at Rooftop Nest Thermostats Ring Doorbells
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Floor Plan A / B 20 Units - 1,837 sq ft
Floor Plan C 20 Units – 2,182 sq ft
Section V Market Information -Market Overview -Comparables Research -Market Data
Artist Rendering Depiction of Interior Design and Style
Market Strength Net migration to Phoenix: #1
Phoenix 2022 Rent Growth Projection: 20%
97% occupancy in Phoenix Of the 38 neighborhoods in Phoenix, Arcadia has the highest median listing price of $1.2 million
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Market Overview Phoenix
According to the U.S. Census Bureau, for the third year in a row, the Metropolitan Phoenix area (Maricopa County) led the nation in population growth in 2019. The “Valley of the Sun” population grew to roughly 5,000,000 people ranking it as the 10th largest MSA in the Country. Additionally according to the U.S. Bureau of Labor Statistics, Maricopa County led the nation in job growth in 2021 having had a 5.2% increase in employment. The metropolitan Phoenix area is projected to grow to over 7,000,000 people over the next 25 years. That population growth is expected to be dispersed in the Valley with 30% living in Phoenix, 27% in the East Valley, 28% in the West Valley, and 15% in Pinal County. Annual demand in metro Phoenix for multi-family housing units is over 10,700 units/year through 2030. The influx of people has a cyclical effect on the economy of the Valley, whereby individuals initially attracted to the Valley for its strong economy, upon becoming permanent residents contribute to expanding the economy further. A recent report by the U.S. Bureau of Economic Analysis revealed that Arizona had the fourth-highest wage growth in the nation in 2019 (5.8%) and the fifth-highest personal income growth rate (5.5%). The economy of Metro Phoenix has dramatically changed over the last 10 years moving away from a dependency on real estate as the primary driver. The current much more diversified economy and job growth is now driven by Health Care, Finance, Manufacturing, Wholesale/Distribution, Information Technology, and Aerospace. Companies across this diverse set of industries are choosing the Phoenix area for expansion and relocation because of the areas large and growing talent base, scalable expansion, cost advantages, and overall improved quality of life. that the Valley affords its residents.
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Market Overview Arcadia / Biltmore Corridor
Of the 38 neighborhoods in Phoenix, Arcadia is the most expensive with a median listing price of $1.2 million. (Roofstock) The Arcadia neighborhood is one of the most desirable addresses in Phoenix. Leafy streets, historic citrus groves, and some of the best dining and shopping in the Valley of the Sun make this one of Phoenix's most picturesque and popular neighborhoods. Perhaps the most prominent natural landmark in the Phoenix Metro area, Camelback Mountain, named so for its uncanny resemblance to a kneeling camel, has been called the soul of Phoenix. The Arcadia neighborhood offers unbeatable views of the mountain, and easy access to some of the best hiking in the city at Camelback Mountain Echo Canyon Recreation Area, situated between the Arcadia neighborhood and the town of Paradise Valley. Arcadia is known for having some of the best restaurants in town, including the ever-popular Chelsea's Kitchen. The menu at this Arcadia neighborhood cafe features farm-fresh ingredients and simple dishes prepared with great care and creativity. American comfort food favorites get the royal treatment at Chelsea's Kitchen, including a wide assortment of specialty salads, burgers, and taco platters. Arcadia is known for its selection of sophisticated wine cafes and lounges. Cool and relaxed, Postino Wine Cafe is one of the most popular gathering spots in the neighborhood. Enjoy a large selection of boutique international wines. Nibble on the delicious panini, salads, bruschetta, and imported artisan meat and cheese plates. The open-air Biltmore Fashion Park, a shopping and dining destination at the edges of the Arcadia neighborhood, offers high-end shopping in a lush garden setting. The shopping center is anchored by Saks Fifth Avenue with high-end boutiques such as Escada, Calypso, Ralph Lauren, Stuart Weitzman, and Cole Haan offering some of the best shopping in the city. The Capital Grille, a popular steakhouse, feeds hungry shoppers.
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Market Commentary Phoenix
Net migration to Phoenix was #1 among U.S. metro areas in 2020, holding the top spot for the last three years. Region was also second in population growth in 2020 (Costar Article - Phoenix Tops US in Net Migration for Third Straight Year). Jobs growth in Phoenix is projected to outpace the national average through 2029 (Arizona Office of Economic Opportunity), taking advantage of the city’s low costs of doing business and young talent pool (US Census Bureau’s American Community Survey). The region’s growing consumer base and its ability to service a sizable e-commerce market make industrial real estate investment opportunities particularly attractive (Cadre, a commercial RE technology company). The Phoenix metro area tops Cadre’s rankings for one and three-year price growth, with continued growth forecast in the region (Cadre, a commercial RE technology company). Cromford Report excerpt – housing is undersupplied: The large majority of market commentators have not grasped that demand is not the issue. Interest rates are not the issue either. Everything today is about supply. Even after a rise of almost 25% there is nowhere near enough supply to take the stress out of the market… Over the last year, prices have not been rising because of strong demand or low interest rate, as often stated by the media. They have been rising because of extremely poor supply. Buyers do not pay more for a home because they can. They pay more because they have to. Multiple bids make them pay more, unless they drop out. Low interest rates merely allow them to compete. If there were more homes for sale, they would get the home for less than the asking price. During July the average buyer had to pay 1.4% over the asking price.
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Phoenix Rental Market Phoenix is a landlord's market with soaring demand and vacancy rates as low as 3.8% (the lowest in 20 years). (Phoenix Business Journal) Catherine Reagor, Senior Real Estate Reporter at the AZ Republic stated that Phoenix “led the nation” in rent increases. There has been more than a 30% increase in the price of apartment rentals last year, and a more than 20% increase in single family rentals last year. All of this is happening even though Phoenix is leading the nation in development. Even though Phoenix rent is increasing abruptly, the metro area still looks affordable to those from the East and West coasts. There is particularly a lot of people from California, Portland, and Seattle. (Arizona PBS ASU) Rents shot up almost 30% in the Phoenix area last year, more than double the U.S. increase. Early projections are for rents to climb almost another 20% in 2022. But this year’s increases for tenants could be even higher based on the very low 3% vacancy for Valley apartments... A normal vacancy rate for Phoenix-area apartments is about 6%... Now fewer than half of the apartments usually available for renters are vacant. (AZ Central) Rents are rising faster in metro Phoenix because the area is growing faster. Real estate firm Redfin’s research shows Phoenix gained 85,000 new residents last year, more than any other U.S. city. Many of the people moving to the Valley are coming from San Francisco, Los Angeles, Chicago and New York, where rents are higher. A lot of people working remotely during the pandemic and making salaries based on living costs in those cities see the apartment rents in the Valley as deals, apartment analysts say. (AZ Central)
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Section VI Team Introduction -General Partner Profiles -Construction Project Management Team
Artist Rendering Depiction of Interior Style and Design
Jeffrey Wong Located atGeneral the highly desirable Partner Mr. Wong hasneighborhood been in residential real Arcadia inestate development since 2001. As a principal he Phoenix, Arizona.
has overseen approximately $80M in residential development. Mr. Wong is experienced in land entitlement, horizontal land development, and new construction development in luxury single family, multifamily townhouse, resort condo and office categories. Mr. Wong is also highly Downtown is only an experienced in value-add planning, design drive. and construction in all types of residential properties.
Bruce Teitelbaum General Partner
Miguel Cuevas Scottsdale’s Projectvibrant Manager Old Town Mr. Cuevas resides full time inand Phoenix restaurants, shopping night andlife willisbe the local project manager only 10 minutes away.
Mr. Teitelbaum has been in commercial real estate for 42 years. He founded Vision Realty Investments over 22 years ago. Mr. who will oversee the GC, the project Teitelbaum has been involved in over 500 progress and the project costing. ACG transactions, the majority as a general boasts approximately $100M of new partner or owner, with one or two partners. construction project management His investment acumen spans across successfully completed and will have multiple real estate asset Within classes - a retail, dedicated management 12 minute drive areproject the office, multi-family and senior care. resources to the Vistas of Arcadia.
11 minute
major Museums and cultural centers along with more than 80 art galleries.
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DISCLOSURES: This Confidential Investment Summary (this “Investment Summary”) has been prepared solely for the purpose of providing a preliminary introduction to the Vistas of Arcadia, LLC a to-be-formed limited liability company (the “Company”) and to assist potential capital sources in deciding whether to proceed with an in-depth investigation in connection with a potential investment in the Company. The information contained in this Investment Summary and any additional written or oral information provided to potential investors or financiers (collectively, the “Information”), is confidential, and shall not be used for any purpose other than to evaluate an investment in the Company, and shall not be disclosed or otherwise made available to anyone not directly concerned with the decision regarding such transaction. The Investment Summary may not be distributed, reproduced or used without the express written consent of the Company for any other purpose than the evaluation of the Company by the person to whom this Investment Summary has been delivered. This Investment Summary is intended to assist interested parties in making their own evaluation of the Company and does not purport to contain all of the information that may be necessary to fully evaluate the Company. No representations and warranties are made as to the accuracy of such information or any other written or oral communication transmitted to the recipient in the course of its evaluation of the Company. Only those particular representations and warranties that may be in a definitive agreement when, as and if executed, will have any legal effect. Such statements, estimates and projections reflect various assumptions by the Company concerning anticipated results and are subject to significant business, economic and competitive uncertainties, and contingencies, many of which are beyond the control of the Company. Accordingly, there can be no assurance that such statements, estimates and projections will be realized. The Company makes no representation as to the accuracy or completeness of such statements, estimates and projections, or that any forecasts will be achieved. The Company’s independent public accountants have not reviewed, examined or compiled the projections presented herein, and accordingly assume no responsibility for them. The projections were not prepared with a view to public disclosure or compliance with published guidelines of the Securities and Exchange Commission or any state securities commission, or the guidelines established by the American Institute of Certified Public Accountants. The estimates and projections presented herein will likely vary, and those variations may be material. The Company expressly disclaims any and all liability for inaccuracy or incompleteness of any Information contained herein, or in any other written or oral communication transmitted or made available to a prospective investor. In all cases, interested parties should conduct their own investigation and analysis of the Company and the Information. The Company reserves the right to negotiate with one or more potential parties at any time and enter into a definitive agreement for a transaction involving the Company without prior written notice to you or other potential parties. The Company also reserves the right to terminate, at any time, further participation in the investigation by any party, to modify the rules of procedure set forth herein or any other procedures without prior notice or assigning any reason therefore or to terminate the process contemplated hereby. The Company reserves the right to take any action, whether in or out of the ordinary course of business, that the Company in its sole discretion deems necessary or prudent in the conduct of the Company’s business or the process contemplated by this Investment Summary.
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