Chicago, IL MSA Multifamily, DST

Chicago, Illinois

ASSET CLASS:  Class A Multifamily
OFFERING SIZE:  $18,450,000
LEVERAGE: 70.00%
# OF UNITS:  276
YEAR BUILT:  2008, 2017, 2019, and 2020 
HOLD PERIOD:  7-10 Years

Prairie Lakes Townhouses is a 276-unit community of beautiful rental homes with great views of Fox River and green belts. The community is comprised of two and three-bedroom units between 1,345 and 1,809 square feet with the nal phase completed in 2019. These stylish townhouses feature a classic architecture with modernized interiors. The property is in close proximity to shops, restaurants, a hotel and hiking trails in the Chicago suburb of McHenry, Illinois, with easy access to main thoroughfares Illinois Route 120 and State Route 31. The objectives are to operate and hold the property, preserving the capital investment, and realize income through ownership and eventual sale or other disposition to facilitate a tax-deferred exchange pursuant to Section 1031 of the Code or exchange roll-up transaction pursuant to Section 721 of the Code, within seven to ten years.

The Trust expects to provide the Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Owners; and (ii) upon any Disposition of the Property.

The Project is located in McHenry, Illinois a part of the Chicago-Naperville-Elgin, IL-IN- WI metropolitan statistical area (the “Chicago MSA”). The Chicago MSA is one of the world’s largest and most diversified economies with an annual GDP of over $689 billion. According to the 2010 Census, the Chicago MSA had a population of 9,461,105 residents. Chicago has experienced a population decline in each year since 2014 with a 2019 population of 9,458,539, just slightly higher than the 2010 census level. The State of Illinois has experienced a substantial population loss over the same period, falling from a 2010 census level of 12,830,632 to a 2019 estimated population of 12,671,821, a loss of 1.2%. Several factors are cited for the population loss including taxes, political issues and weather. The national population growth rate was .73% over the same period.

According to the US Bureau of Labor Statistics (“BLS”), the unemployment rate within the Chicago MSA was 4.7% as of March of 2020. The unemployment rate within the metro is below the State of Illinois rate of 16.4% as of April 2020, and below the national unemployment rate of 14.7% for April 2020. While these figures represent the most recent data available from the BLS, we acknowledge that unemployment rates are moving rapidly amidst the Covid-19 pandemic and the above rates are likely understated against current conditions.

The property is internally managed by the sponsor.

Targeted Yr.-1 Cash-on-Cash: 6.68%
Targeted Cash Range: 6.68% - 10.18%
Targeted Cash Average: 8.44%
Targeted Cash Range w/ Principal Paydown: Loan is Interest Only
Targeted Cash Average w/ Principal Paydown: Loan is Interest Only
Projected IRR (based on sale at purchase cap rate): 11.08%

All-In Price: $62,500,000
Purchase Price: $60,000,000
Appraised Value: $64,700,000
Loan Amount: $42,000,000
Equity Raise: $18,730,000
Initial Trust Reserves: $138,000
On-GoingTrust Reserves (Yrs. 1-10): $690,000
Total Trust Reserves (Yrs. 1-10): $690,000
Total Reserves to All-In Price: 1.38%
Total Reserves to Equity: 4.42%
Net Load: $1,672,000
Net Load to Equity: 8.93%
Net Load to All-In Ratio: 2.79%
Appraised Net Load: -$3,028,000
Appraised Net Load to Equity: -16.17%
Appraised Net Load to All-In Price: -5.05%
All-In $/Ft.: $133.95
All-In $/Unit: $217,391

Net Operating Income: $2,820,584
Purchase Cap Rate: 4.70%
All-In Cap Rate: 4.51%
Breakeven Exit Cap: 5.58%
Breakeven Exit Cap Rate Spread: 88 bps
Appraised Cap: 4.36%
Appraised Cap Rate Spread: 112 bps

Loan Amount: $43,800,000
Term: 10 Years Fixed
Interest Only Period: 10 Years
Amortization Period: None
Interest Rate: 3.22%
Lender: PNC Bank, National Association
LTV: 70.00%
Non-Recourse: Yes to Investor

DST Due Diligence & Advisory Services

(415) 336-9225

The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuing company, or any affiliate, or partner there of the issuer. All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to the “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. Past performance and statements regarding current occupancy and earnings are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by the issuer, or one of its partner/issuers. The issuer does not warrant the accuracy or completeness of the information contained herein. Some offerings are subject to a “cooling off” period and are not available to all investors. 
Thank you for your cooperation.

Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC, and the issuer are not affiliated.