a multifamily community for Ridgeville, SC developed by Ecstatic ...€¦ · Address 1050 Old Gilliard Road, Ridgeville, SC 29472 Zoning RDU & Flex1 TMS 175-00-02-008 Traffic Count

Mossy Oaks a multifamily community for Ridgeville, SC developed by

Ecstatic Properties, LLC

ECSTATIC PROPERTIES, LLC � CONFIDENTIAL DEVELOPMENT MEMORANDUM - 1

Developer Ecstatic Properties, LLC Site Control Under contract Borrower EP Ridgeville, LLC Land Price $1,600,000 County Berkeley Price / Acre $66,667 (usable acre) Address 1050 Old Gilliard Road, Ridgeville, SC 29472 Zoning RDU & Flex1 TMS 175-00-02-008 Traffic Count 49,100 (I-26) Acres 27.6, usable ~ 24

Project Summary Ecstatic Properties, LLC, the development sponsor for this project, is proposing a $41.7 million multifamily development in the greater Charleston, SC submarket of Ridgeville off I-26, exit 187 (approximately 0.1 miles from I-26 interchange), and 2 miles from the new 2.1 million square foot, $1.5 billion Volvo manufacturing facility that is expected to employ 4,000 people. The property will be proximate to the business commerce park named Camp Hall that is projected to eventually have an additional 10,000 employees working for the various Volvo support companies.

The greater Charleston economy has been rapidly expanding with the location of Boeing, Mercedes Benz, and Volvo to the area, and the addition of these multinational companies into the region has stimulated the demand for new housing. As such, multifamily development activity in the area has been very active, with new inventory volume focused in downtown Charleston, Mt. Pleasant, Summerville, and the Goose Creek submarkets. However, there is no multifamily product planned, in the pipeline, or under construction within a twelve mile radius or twenty (20) minute drive of the new Volvo manufacturing facility. The reason is limited availability of zoned land that would permit the use for apartments, and the further one travels from the downtown core of Charleston the lower the rents are to support luxury Class A apartments, which has been the most popular multifamily construction category of developers.

Request for Preferred EquityEP Ridgeville, LLC, the borrower and owner of this proposed multifamily development, is seeking approx. $19.5 million in preferred equity for the project that would be senior to the developer�s common equity. The development sponsor contemplates a return of capital to the preferred equity partner either through a refinance of the property or a sale of the property. The development sponsor projects year 10 IRR of 17%.


SOURCES OF CAPITAL USES OF CAPITAL Sr. Loan $21,000,000 (50.3%) Land Acquisition $1,600,000 (3.8%) Preferred Equity 19,500,900 (46.7%) Hard Costs 32,011,600 (76.7%) Common Equity (Developer) 1,220,948 (5.9%) Soft Costs 5,449,900 (13.1%) FF & E 125,000 (0.3%) Other (contingency, impact fees, etc) 2,535,348 (6.1%)

TOTAL SOURCES OF CAPITAL $41,721,848 (100%) TOTAL USES OF CAPITAL $41,721,848 (100%)

Development DetailsMossy Oaks, the proposed development opportunity, will be a 330 unit multifamily community in Ridgeville, SC. The final unit count will be determined by the density allowed by zoning interpretation, and it is the development sponsor�s desire to maximize density. However, there is a possibility the project will be between 275 & 330 units, but the developer is optimistic that 330 units will be permitted on the property.

The anticipated unit mix is as follows: Bedrooms Type Square Feet Quantity % Total Rent PSF Monthly Rent 1 A1 756 120 36.4% $1.30 $983 1 A2 816 66 20.0% $1.30 $1,061 2 B1 1,164 12 3.6% $1.25 $1,455 2 B1C 1,176 93 28.2% $1.25 $1,470 3 C2 1,236 39 11.8% $1.20 $1,483

TOTAL 316,116 330 100.0%

Summary 1 Bedroom 186 56.4% $1.30 $1,010 2 Bedroom 105 31.8% $1.25 $1,468 3 Bedroom 39 11.8% $1.20 $1,483

Overall Average $1.27 $1,212

Summit Contracting Group, Inc, one of the largest multifamily general contractors in the U.S., will be the general contractor for this project, and Group 4 Design, Inc will be the architect of record. Both Summit Contracting Group and Group 4 Design have collaborated to create a thirty (30) unit prototype that reduces the overall hard construction cost by approximately 10%, as costs have increased dramatically over the years. The


result of the prototype is a building with rentable square foot efficiency of 90%, which is much greater than the average apartment building efficiency of 70% and results in a lower construction cost and greater return on investment.

Competitive AdvantageThe developer of this project seeks to fill a niche in the Ridgeville submarket by providing a multifamily product that fills the need and demand of the workforce in the area. Specifically, the development will target employees within the Camp Hall business park and surrounding area. The next closest apartment communities are located off exit 199 of I-26, twelve (12) miles from the proposed development, and new multifamily communities in this area (Summerville) are seeking overall effective rents of approximately $210 per month higher than this proposed apartment community. The development sponsor projects average effective rents of $1.27 per square foot, or 5% - 10% lower than apartments at least twelve (12) miles away. In addition, Camp Hall is a 6,800 acre business park where no residential development is permitted, and the effect from this is a significant barrier to entry for future competition into this section of Ridgeville through the elimination of acreage for future multifamily development, as Berkeley County is unlikely to rezone land in this area to permit intense residential use. As such, the proposed development has a competitive advantage in this specific submarket since future competition would face serious hurdles with locating available land.

Multifamily Competitive Sample Set*Summerville, SC

Community Address Zip Year Built Units 1 bd $ 2 bd $ 3 bd $ 1 bd psf 2 bd psf 3 bd psf NotesAlta Brighton Park 115 Great Lawn Dr 29486 2018 329 1,143$ 1,526$ 2,025$ 1.45$ 1.29$ 1.34$ lease-upSummer Wind 1001 Linger Longer Rd 29483 2018 267 1,055$ 1,380$ 1,599$ 1.46$ 1.23$ 1.16$ lease-up4830 Wescott 4830 Wescott Blvd 29485 2018 182 1,113$ 1,295$ 1,420$ 1.40$ 1.21$ 1.14$ lease-upThe Passage 100 Underwood Dr 29486 2017 240 1,144$ 1,501$ 1,785$ 1.41$ 1.21$ 1.18$ Legenda at Azalea 3500 Pinckney Marsh Lane 29483 2017 258 1,075$ 1,285$ 1,475$ 1.28$ 1.07$ 1.00$ Beckstone Apartments 100 Comet Creek Lane 29486 2017 268 1,015$ 1,270$ 1.27$ 1.03$ The Waters at St James 1053 Saint James Ave 29486 2017 336 972$ 1,120$ 1,295$ 1.29$ 1.18$ 1.12$ affordable & mkt rateThe Parks at Nexton 2000 Front Street 29483 2015 350 1,274$ 1,926$ 2,132$ 1.79$ 1.60$ 1.49$ Arbor Village 10825 Dorchester Rd 29485 2014 240 1,152$ 1,271$ 1,497$ 1.50$ 1.10$ 1.08$ Cobblestone Village 900 Brookstone Way 29483 2008 320 1,029$ 1,125$ 1,629$ 1.41$ 1.13$ 1.12$ Farmington Village 2100 Farm Springs Rd 29483 2007 280 1,240$ 1,587$ 2,247$ 1.46$ 1.35$ 1.64$ Oakbrook Village 111 Springview Lane 29485 2006 192 930$ 1,190$ 1,365$ 1.28$ 1.01$ 0.96$ Vista Sands 1001 Bear Island Rd 29483 2005 280 1,473$ 1,686$ 2,070$ 1.97$ 1.61$ 1.74$ The Tradition at Summerville 325 Marymeade Dr 29483 2004 232 1,008$ 1,432$ 1,451$ 1.40$ 1.44$ 1.14$ Grove at Oakbrook 325 Midland Pkwy 29485 2001 280 1,002$ 1,155$ 1,330$ 1.14$ 1.00$ 1.03$

AVERAGE PSF 1.30$ AVERAGE OVERALL 1,386$

* Sept 2018 CoStar Report, apartments.com survey


Financial Analysis & Equity Return AssumptionsStabilized Vacancy 7.0% Stabilized NOI (year 3) $3,197,462 Effective Rent Year 1 $1.27psf Unlevered Yield (year 3) 7.7% Annual Rent Growth 2.5% Estimated IRR (year 10) 17% Annual Expense Inflation 2.0% Estimated Equity Multiple (Year 10) 2.5x Operating Costs (year 1) $4.83psf Lease-up Rate 20 units / month (6% occupancy)

Current absorption trends in the Summerville submarket of Charleston are 15 � 25 units per month. As such, the financial projection estimates a rate of 20 units a month during the ramp-up phase, with stabilization at 7% vacancy occurring in month 16 of operations. The financial model assumes all units become rentable upon 100% completion of the entire project and does not contemplate the lease-up of buildings as they come online, which is likely but difficult to forecast. According to the general contractor, the first building could come online approximately nine (9) months following the start of the project which then could be leased, but the financial projection does not factor this scenario.

As referenced above, the financial model assumes a 50% LTC loan of $21 million that includes an interest rate of 6%, interest-only through construction and through the first twenty-four (24) months following receipt of the Certificate of Occupancy, at which time it would be refinanced at 80% LTV at a lower interest rate of 6.0% and amortized over thirty (30) years.

Annual operating expenses were estimated from data for apartment communities in the Charleston area provided through CoStar reports for Class A-/B+ properties. According to Marcus & Millichap multifamily research reports for Charleston, apartment communities are currently experiencing annual rent growth of 4%, and the financial model assumes annual rent growth of 2.5%.


Developer BackgroundThe principals of Ecstatic Properties, LLC (�EP�), John D. Cattano and John J. Dukes, have a comprehensive understanding of the real estate development process as owners, operators, and managers of approximately 3.8 million square feet of diversified real estate assets. The principals of EP have been involved in development projects as large as The Landings on Skidaway Island, which is a 6,000 acre master planned community outside of Savannah, GA that includes 6 golf courses, 2 marinas, 5 clubs, and over 3,500 custom homes.

Further, the principals of EP have also managed and part-owned smaller real estate projects such as eight hotel developments in the southeast comprising a total of 910 rooms and 333,000 square feet at a total cost of approximately $45 million. Most importantly, all of these projects were built on time and within budget.

Brand Location Rooms Square Feet Opened Value Place Columbia, SC (Elgin) 121 44,000 September 2006 Value Place Columbia, SC (Lexington) 121 44,000 January 2008 Value Place Greenville, SC 121 44,000 May 2007 Value Place Macon, GA (South) 121 44,000 June 2008 Value Place Macon, GA (North) 121 44,000 August 2008 Value Place Simpsonville, SC 121 44,000 October 2008 Value Place Duncan, SC 121 44,000 February 2009 Microtel Macon, GA 63 25,000 July 2011

TOTAL 910 333,000


John D. Cattano was the Chief Financial Officer for Ecstatic Stone, LLC which is a natural stone wholesale distributor in Columbia, SC. Before his involvement with Ecstatic Stone, Mr. Cattano was the Chief Financial Officer and owner of Congaree Triton Acquisitions, LLC which was an entity formed in March 2011 that acquired two Triton Stone Group natural stone distributors in Charlotte, NC and Conway, SC. Prior to his involvement in that business acquisition, Mr. Cattano was the managing partner of Congaree Capital Development, LLC. In his capacity as managing member of Congaree Capital Development, Mr. Cattano was intimately involved in the development and operations of seven Value Place franchised hotels located in South Carolina and Georgia, which comprised $35 million in total capital investment. Mr. Cattano was elected by his franchisee peers and served as chairman of the Value Place Strategic-Partner Advisory Council (the board of advisors to the Value Place corporate organization). In 2009 Mr. Cattano was elected Chairman of the Strategic Partner Advisory Council, and in this position Mr. Cattano assisted the Value Place brand with strategy, growth opportunities, marketing, and was a conduit between franchisees and the corporate organization regarding property management best practices. In addition, in 2009 Mr. Cattano was recognized by Value Place for �Property of the Year� for his company�s Columbia, SC (Lexington) property for its performance and site selection / location.

Prior to Congaree Capital Development, Mr. Cattano was involved with NewRoad Partners, a boutique investment banking firm in Washington, DC where he specialized in multi-family and hospitality real estate finance, capital formation, and mergers and acquisition activities. Prior to that position, he was employed by Harren Equity Partners, a private equity fund that focused on acquiring manufacturing, service, and distribution companies. In that capacity he assisted the fund in the leveraged-buyout acquisitions of Texas D.A.R. Enterprises and the Old Virginia Candle Company.

Mr. Cattano earned a Bachelor of Arts Degree in Economics and History at Hampden-Sydney College, and a Master�s Degree in Business Administration from the Babcock Graduate School of Management at Wake Forest University. John and his wife, Julie, reside in Columbia, South Carolina, with their energetic three-legged golden retriever, Mosby. John enjoys traveling to Montana, fly fishing, and cooking.

John J. Dukes has been in the real estate industry for over forty-five years and has an array of experience in residential, multifamily, condo conversions, office parks, motels, resort style development, and all aspects of retail development.

Mr. Dukes began his career with Union Camp Corp where he was responsible for identifying and marketing of approximately 2,000,000 acres of high value land throughout the southeast. In addition to disposition of land for Union Camp Corp, Mr. Dukes was also tasked with evaluating, pricing and liquidating its subsidiary named HomeCrafters on a site by site basis.

Following his tenure at Union Camp Corp, Mr. Dukes was a Project Manager for the Branigar Organization, a Chicago based land development company, that developed The Landings on Skidaway Island in Savannah, GA, a 6,000 acre island surrounded by tidal marshes and the Intracoastal Waterway. Mr. Dukes was intimately involved in every facet of the planning, design, and creation of this master planned gated �natural community� that include six golf courses, two marinas, and four clubs/restaurants. The Urban Land Institute recognized this project with its Award


for Excellence as one of the finest residential developments in the country. Over the years The Landings has been recognized as one of the premier developments in the country (http://thelandings.com/awards-honors/).

Mr. Dukes has extensive experience in the shopping center industry and has been involved in the creation of over 3.5 million square feet of retail space in eleven different states. Anchor tenants for this space have included Wal-Mart, Home Depot, Lowes, Sears, J. C. Penny, grocery, and drug chains.

Mr. Dukes has been retained by several Real Estate Investment Trusts and banks, both as a consultant and as a developer, and on behalf of a major Texas REIT, he evaluated, negotiated, and acquired all of the peripheral properties and raw land portfolio of a major mall developer, (The Debartollo Family), which included holdings mainly in New York, Ohio, and Florida. For this specific project, Mr. Dukes packaged, master planned, rezoned when necessary, and resold all properties in the portfolio, which included, residential, retail, office, multifamily, and out parcels.

Mr. Dukes was also retained by Bank One (Indianapolis, IN), and was entrusted with the completion of five undeveloped Wal-Mart properties located in South Carolina, North Carolina, Georgia, and Mississippi. Mr. Dukes completed this project in a span of 18 months and successfully brought all properties to a positive cash flow position for Bank One. Bank One then commissioned Mr. Dukes to sell three of the properties to a hedge fund managed by Merrill Lynch from Los Angeles, one to a REIT in Charlotte, and one to a REIT in Ohio.

Mr. Dukes earned a Bachelor of Arts Degree in Economics from the University of Georgia where he also played basketball. Mr. Dukes served in the U.S. Air Force as a medic.

11:00 AM 12/21/2018

Project NameMossy Oaks1050 Old Gilliard RdRidgeville, SC 29472

ConstructionSources of Capital Amount % Total Rate Uses of Capital Amount % Total

Sr. Loan 21,000,000 50.3% 6.00% Land Acquisition 1,600,000$ 3.8% Blended Loan CostMezzanine Loan - 0.0% Construction Hard Costs 32,011,600 76.7% Debt Amount RateOther - 0.0% Construction Soft Costs 5,449,900 13.1% Sr 21,000,000 6.00%Preferred Equity 19,500,900 46.7% FF&E 125,000 0.3% Jr - 4.00%Common Equity 1,220,948$ 2.9% Other (contingency, etc) 2,535,348 6.1% Total 21,000,000

WACC 6.00%TOTAL SOURCES OF CAPITAL 41,721,848$ 100.0% TOTAL USES OF CAPITAL 41,721,848$ 100.0%

-Equity Stack

First Mortgage Loan Data Preferred 19,500,900 94.1%Bank Underwriting Fee Percent 1.00% OZ Fund / Equity - 0.0%Bank Underwriting Fee Amount 210,000$ Developer's Fee 1,220,948 5.9%First Mortgage Amortization Term 30 20,721,848

11:00 AM 12/21/2018

Detailed Construction BudgetItem Cost Cost / Room Cost SF

Construction Hard CostsBuild Out 31,611,600$ 95,793$ 100.00$ Fencing 50,000 152 0.16Club House & Amenities 350,000 1,061 1.11

Total Construction Hard Costs 32,011,600 97,005 101.27

Construction Soft CostsProfessional - Legal & Accounting 35,000 106 0.11Land Taxes 50,000 152 0.16Architectural / Engineering 363,000 1,100 1.15Civil / Landscape Engineering 50,000 152 0.16Title & Recording 15,000 45 0.05Phase I Report 3,900 12 0.01Geotechnical Exploration 10,000 30 0.03Environmental / Wetlands Review 8,000 24 0.03Market Study & Appraisal 8,000 24 0.03Surveys 15,000 45 0.05Traffic Report 7,000 21 0.02Underwriting Fee (1.0%) - Construction Loan 210,000 636 0.66Working Capital Reserve 2,000,000 6,061 6.33Capitalized Interest 750,000 2,273 2.37Development Fee 1,650,000 5,000 5.22Salaries & Benefits - Property Mgmt. 125,000 379 0.40Sales & Marketing, Materials - Property Mgmt. 125,000 379 0.40Office Supplies, Soft Goods, Utilities 25,000 76 0.08

Total Soft Costs 5,449,900 16,515 17.24

Furniture, Fixtures & Equipment (FF&E)Office Equipment / Computers / Security Cameras 15,000 45 0.05Property Mgmt System (Software) 10,000 30 0.03Case goods and Smallwares 100,000 303 0.32

Total FF&E (Vendor Provided Items) 125,000 379 0.40

Other CostsHard Cost Contingency (3%) 960,348 2,910 3.04Utility Impact Fees 150,000 455 0.47Water Tap Fee 150,000 455 0.47Water Line Extension 1,250,000 3,788 3.95County Fees 10,000 30 0.03Exterior Sign 15,000 45 0.05Land Cost 1,600,000 4,848 5.06

Total Other Costs 4,135,348 12,531 13.08

TOTAL CONSTRUCTION COSTS 41,721,848$ 126,430$ 131.98$

11:00 AM 12/21/2018Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472Construction Draw Schedule 1 2 3 4

Item Budget Month 1 Month 2 Month 3 Month 4 Month 4 Month 5 Month 6 Month 7

Construction Hard CostsBuild Out 31,611,600$ -$ -$ -$ -$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ Sitework 50,000 - - - -Clubhouse 350,000 - - - - - - - -

Total Construction Hard Costs 32,011,600 - - - - 1,756,200 1,756,200 1,756,200 1,756,200

Construction Soft CostsProfessional - Legal & Accounting 35,000 - - - 30,000 - - - -Land Taxes 50,000 - - - - - - 25,000 -Architectural / Engineering 363,000 5,000 100,000 100,000 100,000 - - - -Civil / Landscape Engineering 50,000 - 25,000 10,000 10,000 - - - -Title & Recording 15,000 - - - 10,000 - - - -Phase I Report 3,900 - - 3,900 - - - - -Geotechnical Exploration 10,000 - - 10,000 - - - - -Environmental / Wetlands Review 8,000 - - 8,000 - - - - -Market Study & Appraisal 8,000 - - 8,000 - - - - -Surveys 15,000 - - 12,000 - - - - -Traffic Report 7,000 - 7,000 - - - - - -Underwriting Fee (1.0%) - Construction Loan 210,000 - - - 210,000 - - - -Working Capital Reserve 2,000,000 - - - - - - - -Capitalized Interest 750,000 - - - - - - - -Development Fee 1,650,000 - - - - 500,000 - - -Salaries & Benefits - Property Mgmt. 125,000 - - - - - - - -Sales & Marketing, Materials - Property Mgmt. 125,000 - - - - - - - -Office Supplies, Soft Goods, Utilities 25,000 - - - - - - - -

Total Soft Costs 5,449,900 5,000 132,000 151,900 360,000 500,000 - 25,000 -

Furniture, Fixtures & Equipment (FF&E)Office Equipment / Computers / Security Cameras 15,000 - - - - - - - -Property Mgmt System (Software) 10,000 - - - - - - - -Case goods and Smallwares 100,000 - - - - - - - -

Total FF&E (Vendor Provided Items) 125,000 - - - - - - - -

Other CostsHard Cost Contingency (3%) 960,348 - - - - - - - -Utility Impact Fees 150,000 - - - 150,000 - - - -Water Tap Fee 150,000 - - - 150,000 - - - -Water Line Extension 1,250,000 - - - - 250,000 250,000 250,000 250,000County Fees 10,000 - - - 10,000 - - - -Exterior Sign 15,000 - - - - - - - -Land Cost 1,600,000 - - - 1,600,000 - - - -

Total Other Costs 4,135,348 - - - 1,910,000 250,000 250,000 250,000 250,000

TOTAL CONSTRUCTION COSTS 41,721,848$ 5,000$ 132,000$ 151,900$ 2,270,000$ 2,506,200$ 2,006,200$ 2,031,200$ 2,006,200$-

EquityBeginning Balance 20,721,848 20,716,848 20,584,848 20,432,948 18,162,948 15,656,748 13,650,548 11,619,348Draw (5,000) (132,000) (151,900) (2,270,000) (2,506,200) (2,006,200) (2,031,200) (2,006,200)

Ending Balance 20,716,848 20,584,848 20,432,948 18,162,948 15,656,748 13,650,548 11,619,348 9,613,148Cumulative Equity Draw 5,000 137,000 288,900 2,558,900 5,065,100 7,071,300 9,102,500 11,108,700

Remaining Construction Payment Balance - - - - - - - -

Construction LoanBeginning Balance 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000Draw - - - - - - - -

Ending Balance 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000Cumulative Loan Draw - - - - - - - -

Remaining Construction Payment Balance - - - - - - - -

Capitalized Interest CalculationInterest Rate 6.00%Interest Expense - - - - - - - -

PRE-CONSTRUCTION

11:00 AM 12/21/2018Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472Construction Draw Schedule

Item

Construction Hard CostsBuild OutSiteworkClubhouse

Total Construction Hard Costs

Construction Soft CostsProfessional - Legal & AccountingLand TaxesArchitectural / EngineeringCivil / Landscape EngineeringTitle & RecordingPhase I ReportGeotechnical ExplorationEnvironmental / Wetlands ReviewMarket Study & AppraisalSurveysTraffic ReportUnderwriting Fee (1.0%) - Construction LoanWorking Capital ReserveCapitalized InterestDevelopment FeeSalaries & Benefits - Property Mgmt.Sales & Marketing, Materials - Property Mgmt.Office Supplies, Soft Goods, Utilities

Total Soft Costs

Furniture, Fixtures & Equipment (FF&E)Office Equipment / Computers / Security CamerasProperty Mgmt System (Software)Case goods and Smallwares

Total FF&E (Vendor Provided Items)

Other CostsHard Cost Contingency (3%)Utility Impact FeesWater Tap FeeWater Line ExtensionCounty FeesExterior SignLand Cost

Total Other Costs

TOTAL CONSTRUCTION COSTS

EquityBeginning BalanceDraw

Ending BalanceCumulative Equity Draw

Remaining Construction Payment Balance

Construction LoanBeginning BalanceDraw

Ending BalanceCumulative Loan Draw


Capitalized Interest CalculationInterest RateInterest Expense

5 6 7 8 9 10 11 12 13 14

Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17

1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$

- - - - - - 350,000 - - -1,756,200 1,756,200 1,756,200 1,756,200 1,756,200 1,756,200 2,106,200 1,756,200 1,756,200 1,756,200

- - - - - - - - - -- - - - - - - - - -- - - - 25,000 - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - 359 9,209 19,862 28,809 37,802 46,840- - - - 500,000 - - - - -- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -- - - - 525,359 9,209 19,862 28,809 37,802 46,840

- - - - 15,000 - - - - -- - - - 10,000 - - - - -- - - - 100,000 - - - - -- - - - 125,000 - - - - -

- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -

250,000- - - - - - - - - -- - - - - - - - - -- - - - - - - - - -

250,000 - - - - - - - - -

2,006,200$ 1,756,200$ 1,756,200$ 1,756,200$ 2,406,559$ 1,765,409$ 2,126,062$ 1,785,009$ 1,794,002$ 1,803,040$

9,613,148 7,606,948 5,850,748 4,094,548 2,338,348 - - - - -(2,006,200) (1,756,200) (1,756,200) (1,756,200) (2,338,348) - - - - -7,606,948 5,850,748 4,094,548 2,338,348 - - - - - -

13,114,900 14,871,100 16,627,300 18,383,500 20,721,848 20,721,848 20,721,848 20,721,848 20,721,848 20,721,848

- - - - 68,211 1,765,409 2,126,062 1,785,009 1,794,002 1,803,040

21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 20,931,789 19,166,380 17,040,319 15,255,309 13,461,307- - - - (68,211) (1,765,409) (2,126,062) (1,785,009) (1,794,002) (1,803,040)

21,000,000 21,000,000 21,000,000 21,000,000 20,931,789 19,166,380 17,040,319 15,255,309 13,461,307 11,658,267- - - - 68,211 1,833,620 3,959,681 5,744,691 7,538,693 9,341,733

- - - - - - - - - -

- - - - 341 9,168 19,798 28,723 37,693 46,709

11:00 AM 12/21/2018Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472Construction Draw Schedule

Item

Construction Hard CostsBuild OutSiteworkClubhouse

Total Construction Hard Costs

Construction Soft CostsProfessional - Legal & AccountingLand TaxesArchitectural / EngineeringCivil / Landscape EngineeringTitle & RecordingPhase I ReportGeotechnical ExplorationEnvironmental / Wetlands ReviewMarket Study & AppraisalSurveysTraffic ReportUnderwriting Fee (1.0%) - Construction LoanWorking Capital ReserveCapitalized InterestDevelopment FeeSalaries & Benefits - Property Mgmt.Sales & Marketing, Materials - Property Mgmt.Office Supplies, Soft Goods, Utilities

Total Soft Costs

Furniture, Fixtures & Equipment (FF&E)Office Equipment / Computers / Security CamerasProperty Mgmt System (Software)Case goods and Smallwares

Total FF&E (Vendor Provided Items)

Other CostsHard Cost Contingency (3%)Utility Impact FeesWater Tap FeeWater Line ExtensionCounty FeesExterior SignLand Cost

Total Other Costs

TOTAL CONSTRUCTION COSTS

EquityBeginning BalanceDraw

Ending BalanceCumulative Equity Draw


Construction LoanBeginning BalanceDraw

Ending BalanceCumulative Loan Draw


Capitalized Interest CalculationInterest RateInterest Expense

15 16 17 18

Month 18 Month 19 Month 20 Month 21 Total

1,756,200$ 1,756,200$ 1,756,200$ 1,756,200$ 31,611,600$50,000$ 50,000

- - - - 350,0001,756,200 1,756,200 1,756,200 1,806,200 32,011,600

- - - 5,000 35,000- - - 25,000 50,000- - - 33,000 363,000- - - 5,000 50,000- - - 5,000 15,000- - - - 3,900- - - - 10,000- - - - 8,000- - - - 8,000- - - 3,000 15,000- - - - 7,000- - - - 210,000- - - 2,000,000 2,000,000

55,923 65,555 75,248 410,393 750,000- - - 650,000 1,650,000- 50,000 40,000 35,000 125,000- 50,000 50,000 25,000 125,000- - 12,500 12,500 25,000

55,923 165,555 177,748 3,208,893 5,449,900

- - - - 15,000- - - - 10,000- - - - 100,000- - - - 125,000

- - - 960,348 960,348- - - - 150,000- - - - 150,000

1,250,000- - - - 10,000- - - 15,000 15,000- - - - 1,600,000- - - 975,348 4,135,348

1,812,123$ 1,921,755$ 1,933,948$ 5,990,441$ 41,721,848$

- - - -- - - -- - - -

20,721,848 20,721,848 20,721,848 20,721,848

1,812,123 1,921,755 1,933,948 5,990,441

11,658,267 9,846,144 7,924,389 5,990,441(1,812,123) (1,921,755) (1,933,948) (5,990,441)9,846,144 7,924,389 5,990,441 0

11,153,856 13,075,611 15,009,559 21,000,000

- - - -

55,769 65,378 75,048 105,000 443,628

11:00 AM 12/21/2018

Assumptions Unit MixExpense Inflation Rate 2.0% Type Type Unit Count Unit Mix % SF Rent PSF Rent / Unit Monthly RentAnnual Rent Trend 2.5% 1 BR / 1 BA A1 120 36.4% 756 1.30$ 983$ 117,936$ Holding Period 1 BR / 1 BA A2 66 20.0% 816 1.30$ 1,061$ 70,013$ Cap Rate 6.5% 2 BR / 2 BA B1 12 3.6% 1,164 1.25$ 1,455$ 17,460$ Vacancy Rate 7.0% 2 BR / 2 BA B1C 93 28.2% 1,176 1.25$ 1,470$ 136,710$

3 BR / 3 BA C2 39 11.8% 1,236 1.20$ 1,483$ 57,845$ Cost AnalysisLand Acqisition 1,600,000$ Total 330 100.0% 316,116 399,964$ Hard Costs 32,011,600 Avg Rent / Unit 1,212$ Soft Costs 5,449,900FF&E 125,000Other 2,535,348Total Project Costs 41,721,848$

-Operating Expenses PSF % GPRSalaries & Personnel 0.43$ 9.7%Administrative 0.51$ 1.9%Repairs & Maintenance 0.73$ 3.4%Contract Services 0.38$ 2.7%Mgmt Fee 0.43$ 2.7%Insurance 0.31$ 1.7%Taxes 1.22$ Utilities 0.65$ 2.4%Marketing 0.17$ 1.2%Total PSF 4.83$

11:00 AM 12/21/2018

Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472Unit Mix

1 bd rm 1 bd rm 2 bd rm 2 bd rm 3 bd rmsf >>> 756 816 1,164 1,176 1,236

A1 A2 B1 B1C C2 TotalBldg 1

FL 1 4 2 - 3 1 10FL 2 4 2 - 3 1 10FL 3 4 2 - 3 1 10Total Units 12 6 - 9 3 30% Total 40.0% 20.0% 0.0% 30.0% 10.0% 100.0%Total SF 9,072 4,896 - 10,584 3,708 28,260

Bldg 2FL 1 2 2 2 2 2 10FL 2 2 2 2 2 2 10FL 3 2 2 2 2 2 10Total Units 6 6 6 6 6 30% Total 20.0% 20.0% 20.0% 20.0% 20.0% 100.0%Total SF 4,536 4,896 6,984 7,056 7,416 30,888

Proposed Building ConstructionBldg 1 9 108 54 - 81 27 270Bldg 2 2 12 12 12 12 12 60

Total Unit Mix 11 120 66 12 93 39 330% Total 36.4% 20.0% 3.6% 28.2% 11.8% 100.0%Total SF 90,720 53,856 13,968 109,368 48,204 ######

1 bedroom 186 56.4%2 bedroom 105 31.8%3 bedroom 39 11.8%

Total 330 100.0%

11:00 AM 12/21/2018Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472

Financing SummaryNumber of Units 330Total Project Cost 41,721,848$ Cost / Unit 126,430$ Cost / Square Foot 131.98$ First Mortgage Amount 21,000,000$ Equity Requirement 20,721,848$ Interest Rate 6.00%First Mortgage Loan-to-Cost 50.3%First Mortgage Amortization Term 30

Income Statement Summary

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Average Monthly Rent 1,212$ 1,242$ 1,273$ 1,305$ 1,338$ 1,371$ 1,406$ 1,441$ 1,477$ 1,514$ Average Occupancy 39.0% 90.8% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0%Average Effective Rent 1,212$ 1,242$ 1,273$ 1,305$ 1,338$ 1,371$ 1,406$ 1,441$ 1,477$ 1,514$

Effective Gross Income 2,126,206$ 4,725,230$ 4,956,818$ 5,080,738$ 5,207,757$ 5,337,951$ 5,471,399$ 5,608,184$ 5,748,389$ 5,892,099$

Operating Expenses 1,219,089 1,249,566 1,274,558 1,300,049 1,326,050 1,352,571 1,379,622 1,407,215 1,435,359 1,464,066

Gross Operating Profit 907,117 3,475,664 3,682,260 3,780,690 3,881,707 3,985,380 4,091,777 4,200,970 4,313,030 4,428,033

Other ExpensesReplacement reserve @ 2% 29,901 94,505 99,136 101,615 104,155 106,759 109,428 112,164 114,968 117,842Real estate & Personal property taxes 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662

Total Other Expenses 415,563 480,166 484,798 487,276 489,817 492,421 495,090 497,825 500,629 503,503

Net Operating Income (NOI) 491,555 2,995,498 3,197,462 3,293,413 3,391,890 3,492,959 3,596,688 3,703,145 3,812,401 3,924,529

Debt Service 2,286,631 2,286,631 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902

Cash Flow for Distribution (1,795,077)$ 708,866$ 455,560$ 551,511$ 649,988$ 751,057$ 854,786$ 961,242$ 1,070,499$ 1,182,627$

Debt Service Coverage Ratio NA 1.31 1.17 1.20 1.24 1.27 1.31 1.35 1.39 1.43Cash-on-Cash ROE NA 3.4% 2.2% 2.7% 3.1% 3.6% 4.1% 4.6% 5.2% 5.7%Unlevered Return on Cost NA 7.2% 7.7% 7.9% 8.1% 8.4% 8.6% 8.9% 9.1% 9.4%

RAMP-UP STABILIZED

11:00 AM 12/21/2018

Mossy Oaks1050 Old Gilliard RdRidgeville, SC 29472

Budget Budget Budget Budget Budget Budget Budget Budget BudgetMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Average Monthly Rate $1,212 $1,212 $1,212 $1,212 $1,212 $1,212 $1,212 $1,212 $1,212Average Occupancy 6.0% 12.0% 18.0% 24.0% 30.0% 36.0% 42.0% 48.0% 54.0%

RevenueGross Rental Income 399,964$ 399,964$ 399,964$ 399,964$ 399,964$ 399,964$ 399,964$ 399,964$ 399,964$ Less: Vacancy, Concessions, and Credit Loss (375,966) (351,968) (327,970) (303,972) (279,975) (255,977) (231,979) (207,981) (183,983)Plus: Other Revenue 5.3% 21,198 21,198 21,198 21,198 21,198 21,198 21,198 21,198 21,198

Effective Gross Income 45,196 69,194 93,192 117,189 141,187 165,185 189,183 213,181 237,178

Operating ExpensesSalaries & Personnel 38,796 38,796 38,796 38,796 38,796 38,796 38,796 38,796 38,796Administrative 7,599 7,599 7,599 7,599 7,599 7,599 7,599 7,599 7,599Repairs & Maintenance 13,599 13,599 13,599 13,599 13,599 13,599 13,599 13,599 13,599Contract Services 10,799 10,799 10,799 10,799 10,799 10,799 10,799 10,799 10,799Insurance 6,799 6,799 6,799 6,799 6,799 6,799 6,799 6,799 6,799Mgmt. Fee 9,599 9,599 9,599 9,599 9,599 9,599 9,599 9,599 9,599Utilities 9,599 9,599 9,599 9,599 9,599 9,599 9,599 9,599 9,599Marketing 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800

Total Operating Expenses 101,591 101,591 101,591 101,591 101,591 101,591 101,591 101,591 101,591

Gross Operating Profit (56,395) (32,397) (8,399) 15,599 39,596 63,594 87,592 111,590 135,588

Other ExpensesReplacement reserve @ 2% 2% - - - - - - 3,784 4,264 4,744Real estate & Personal property taxes 32,138 32,138 32,138 32,138 32,138 32,138 32,138 32,138 32,138

Total Other Expenses 32,138 32,138 32,138 32,138 32,138 32,138 35,922 36,402 36,882

Net Operating Income (NOI) (88,533) (64,536) (40,538) (16,540) 7,458 31,456 51,670 75,188 98,706

Debt Service (IO first 24-months) 190,553 190,553 190,553 190,553 190,553 190,553 190,553 190,553 190,553

Cash Flow for Distribution (279,086)$ (255,088)$ (231,090)$ (207,092)$ (183,095)$ (159,097)$ (138,883)$ (115,365)$ (91,847)$

11:00 AM 12/21/2018


Average Monthly RateAverage Occupancy

RevenueGross Rental IncomeLess: Vacancy, Concessions, and Credit LossPlus: Other Revenue 5.3%

Effective Gross Income

Operating ExpensesSalaries & PersonnelAdministrativeRepairs & MaintenanceContract ServicesInsuranceMgmt. FeeUtilitiesMarketing

Total Operating Expenses

Gross Operating Profit

Other ExpensesReplacement reserve @ 2% 2%Real estate & Personal property taxes

Total Other Expenses

Net Operating Income (NOI)

Debt Service (IO first 24-months)

Cash Flow for Distribution

Budget Budget Budget Budget Budget Budget Budget Budget BudgetMonth 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18

$1,212 $1,212 $1,212 $1,242 $1,242 $1,242 $1,242 $1,242 $1,24260.0% 66.0% 72.0% 78.0% 84.0% 90.0% 93.0% 93.0% 93.0%

399,964$ 399,964$ 399,964$ 409,963$ 409,963$ 409,963$ 409,963$ 409,963$ 409,963$ (159,985) (135,988) (111,990) (90,192) (65,594) (40,996) (28,697) (28,697) (28,697)

21,198 21,198 21,198 21,728 21,728 21,728 21,728 21,728 21,728261,176 285,174 309,172 341,499 366,097 390,694 402,993 402,993 402,993

38,796 38,796 38,796 39,766 39,766 39,766 39,766 39,766 39,7667,599 7,599 7,599 7,789 7,789 7,789 7,789 7,789 7,789

13,599 13,599 13,599 13,939 13,939 13,939 13,939 13,939 13,93910,799 10,799 10,799 11,069 11,069 11,069 11,069 11,069 11,069

6,799 6,799 6,799 6,969 6,969 6,969 6,969 6,969 6,9699,599 9,599 9,599 9,839 9,839 9,839 9,839 9,839 9,8399,599 9,599 9,599 9,839 9,839 9,839 9,839 9,839 9,8394,800 4,800 4,800 4,920 4,920 4,920 4,920 4,920 4,920

101,591 101,591 101,591 104,131 104,131 104,131 104,131 104,131 104,131

159,585 183,583 207,581 237,368 261,966 286,564 298,863 298,863 298,863

5,224 5,703 6,183 6,830 7,322 7,814 8,060 8,060 8,06032,138 32,138 32,138 32,138 32,138 32,138 32,138 32,138 32,13837,362 37,842 38,322 38,968 39,460 39,952 40,198 40,198 40,198

122,223 145,741 169,259 198,400 222,506 246,612 258,664 258,664 258,664

190,553 190,553 190,553 190,553 190,553 190,553 190,553 190,553 190,553

(68,329)$ (44,811)$ (21,293)$ 7,847$ 31,953$ 56,059$ 68,112$ 68,112$ 68,112$

11:00 AM 12/21/2018


Average Monthly RateAverage Occupancy

RevenueGross Rental IncomeLess: Vacancy, Concessions, and Credit LossPlus: Other Revenue 5.3%

Effective Gross Income

Operating ExpensesSalaries & PersonnelAdministrativeRepairs & MaintenanceContract ServicesInsuranceMgmt. FeeUtilitiesMarketing

Total Operating Expenses

Gross Operating Profit

Other ExpensesReplacement reserve @ 2% 2%Real estate & Personal property taxes

Total Other Expenses

Net Operating Income (NOI)

Debt Service (IO first 24-months)

Cash Flow for Distribution

Budget Budget Budget Budget Budget BudgetMonth 19 Month 20 Month 21 Month 22 Month 23 Month 24

$1,242 $1,242 $1,242 $1,242 $1,242 $1,24293.0% 93.0% 93.0% 93.0% 93.0% 93.0%

409,963$ 409,963$ 409,963$ 409,963$ 409,963$ 409,963$ (28,697) (28,697) (28,697) (28,697) (28,697) (28,697)21,728 21,728 21,728 21,728 21,728 21,728

402,993 402,993 402,993 402,993 402,993 402,993

39,766 39,766 39,766 39,766 39,766 39,7667,789 7,789 7,789 7,789 7,789 7,789

13,939 13,939 13,939 13,939 13,939 13,93911,069 11,069 11,069 11,069 11,069 11,069

6,969 6,969 6,969 6,969 6,969 6,9699,839 9,839 9,839 9,839 9,839 9,8399,839 9,839 9,839 9,839 9,839 9,8394,920 4,920 4,920 4,920 4,920 4,920

104,131 104,131 104,131 104,131 104,131 104,131

298,863 298,863 298,863 298,863 298,863 298,863

8,060 8,060 8,060 8,060 8,060 8,06032,138 32,138 32,138 32,138 32,138 32,13840,198 40,198 40,198 40,198 40,198 40,198

258,664 258,664 258,664 258,664 258,664 258,664

190,553 190,553 190,553 190,553 190,553 190,553

68,112$ 68,112$ 68,112$ 68,112$ 68,112$ 68,112$

11:00 AM 12/21/2018


Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Avg. Monthly Unit Rate 1,212$ 1,242$ $1,273 $1,305 $1,338 $1,371 $1,406 $1,441 $1,477 $1,514Avg. Occupancy 39.0% 90.8% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0%Avg. Vacancy 61.0% 9.3% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%Total Available Units / Year 330 330 330 330 330 330 330 330 330 330Avg. Occupied Units / Year 129 299 307 307 307 307 307 307 307 307Expense Inflator - - 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Rent Inflator 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%

RevenueGross Rental Income 4,799,563$ 4,919,552$ 5,042,541$ 5,168,605$ 5,297,820$ 5,430,265$ 5,566,022$ 5,705,172$ 5,847,802$ 5,993,997$ Less: Vacancy, Concessions, and Credit Loss (2,927,734) (455,059) (352,978) (361,802) (370,847) (380,119) (389,622) (399,362) (409,346) (419,580)Plus: Other Revenue 5.3% 254,377 260,736 267,255 273,936 280,784 287,804 294,999 302,374 309,933 317,682

Effective Gross Income 2,126,206 4,725,230 4,956,818 5,080,738 5,207,757 5,337,951 5,471,399 5,608,184 5,748,389 5,892,099

Operating ExpensesSalaries & Personnel 465,558 477,197 486,741 496,475 506,405 516,533 526,864 537,401 548,149 559,112Administrative 91,192 93,471 95,341 97,248 99,193 101,177 103,200 105,264 107,369 109,517Repairs & Maintenance 163,185 167,265 170,610 174,022 177,503 181,053 184,674 188,367 192,135 195,977Contract Services 129,588 132,828 135,484 138,194 140,958 143,777 146,653 149,586 152,578 155,629Insurance 81,593 83,632 85,305 87,011 88,751 90,526 92,337 94,184 96,067 97,989Mgmt. Fee 115,190 118,069 120,431 122,839 125,296 127,802 130,358 132,965 135,624 138,337Utilities 115,190 118,069 120,431 122,839 125,296 127,802 130,358 132,965 135,624 138,337Marketing 57,595 59,035 60,215 61,420 62,648 63,901 65,179 66,483 67,812 69,168

Total Operating Expenses 1,219,089 1,249,566 1,274,558 1,300,049 1,326,050 1,352,571 1,379,622 1,407,215 1,435,359 1,464,066

Gross Operating Profit 907,117 3,475,664 3,682,260 3,780,690 3,881,707 3,985,380 4,091,777 4,200,970 4,313,030 4,428,033

Other ExpensesReplacement reserve @ 2% 2.0% 29,901 94,505 99,136 101,615 104,155 106,759 109,428 112,164 114,968 117,842Real estate & Personal property taxes 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662 385,662

Total Other Expenses 415,563 480,166 484,798 487,276 489,817 492,421 495,090 497,825 500,629 503,503

Net Operating Income (NOI) 491,555 2,995,498 3,197,462 3,293,413 3,391,890 3,492,959 3,596,688 3,703,145 3,812,401 3,924,529

Debt Service 2,286,631 2,286,631 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902 2,741,902

Cash Flow for Distribution (1,795,077)$ 708,866$ 455,560$ 551,511$ 649,988$ 751,057$ 854,786$ 961,242$ 1,070,499$ 1,182,627$

Debt Service Coverage (DSC) NA 1.31 1.17 1.20 1.24 1.27 1.31 1.35 1.39 1.43

RAMP-UP STABILIZED

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a multifamily community for Ridgeville, SC developed by Ecstatic ...€¦ · Address 1050 Old Gilliard Road, Ridgeville, SC 29472 Zoning RDU & Flex1 TMS 175-00-02-008 Traffic Count