St. Louis, MO Multifamily, DST

St. Louis, Missouri

ASSET CLASS:  Class A Multifamily
OFFERING SIZE:  $24,480,000
MINIMUM INVESTMENT:  $100,000
LEVERAGE:  49.71%
YEAR BUILT: 2018
UNITS:  160
HOLD PERIOD:  7-10 Years
TARGETED YR.-1 RETURN:  5.12%
REMAINING EQUITY:  $1,000,000

Class A apartment community constructed in 2018 with high end finishes, smart home technology and an expansive amenity set, including an entertainment deck with swimming pool and lounge. The Project includes two-levels of garage parking offering coveted off-street parking for residents. The Project is located approximately 1 mile from the Central West End neighborhood of St. Louis, offering convenient access to two of St. Louis’ largest employers (BJC Healthcare and Washington University in St. Louis) as well as numerous restaurants entertainment options, and recreational activities. BJC Medical Complex is the largest medical facility in the St. Louis Metropolitan area and is one of the highest ranked medical centers in the nation.

Maximize occupancy; enhance online presence; actively manage other income revenue opportunities and operating expenses. As a newly developed multifamily complex, the Property is not in need of significant capital upgrades.

While neighborhood demographic characteristics appear to be lackluster, the area benefits from nearby demand generators and recent investment activity. Annual population growth and household formation rates within one mile of the Property are expected to decrease over the next five years. Median income in the area is below both the St. Louis MSA and the national average. The appraiser believes that the immediate neighborhood is “economically stable,” due to the proximity of the BJC medical complex and Washington University’s two nearby campuses. Our site inspector attributes demand for the area to nearby employers, including Washington University, which is expanding and contributing to strong job growth. The Property’s developer is developing a 155-unit apartment complex on Pershing Avenue, across the street from the Property, that is expected to be completed in 2020.

The appraiser considers the Property’s submarket to be “upper tier,” due to its central location near downtown St. Louis and proximity to employment centers, which should help drive rent growth for the Property. The Property’s neighborhood benefits from the stable presence of BJC medical complex and Washington University, two major employers, as well as new commercial investments in the area.

The St. Louis MSA will likely be a below average performer over the long term. While the Property’s submarket is in demand and is expected to experience positive rent growth, new supply will keep occupancy rates below average compared to the St. Louis MSA. However, recent investment and re- development activities in the Property’s immediate area complement the presence of major employers. The appraisal reports that an “uninspiring demographic profile” will keep St. Louis from expanding at the national average in the long run in terms of the labor market. The appraisal concluded that the St.Louis MSA will benefit from below average living and business costs as well as below average employment volatility, while exposure to declining manufacturing and persistent out-migration will hinder growth in the future. The appraiser considers the Property’s submarket to be “upper tier,” due to its central location near downtown St. Louis and proximity to employment centers. Occupancy in the submarket is lower than the St.Louis MSA due to the amount of new construction being brought online in the past 24 months.

Targeted Yr.-1 Cash-on-Cash: 5.12%
Targeted Cash Range: 5.12% - 7.16%
Targeted Cash Average: 5.88%

All-In Price: $48,680,000
Purchase Price: $44,000,000
Appraised Value: $44,000,000
Loan Amount: $24,200,000
Equity Raise: $23,825,000
Trust Reserves: $493,096
Reserves to All-In Price: 1.01%
Reserves to Equity: 2.07%
Net Load: $4,186,904
Net Load to Equity: 17.57%
Net Load to All-In Ratio: 8.60%
Appraised Net Load: $4,186,904
Appraised Net Load to Equity: 17.57%
Appraised Net Load to All-In Price: 8.60%
All-In $/Ft.: $446,705
All-In $/Unit.: $304,250
Sponsor Profit: 4.57%

Net Operating Income: $2,169,200
Purchase Cap Rate: 4.93%
All-In Cap Rate: 4.46%
Breakeven Exit Cap: 6.07%
Breakeven Exit Cap Rate Spread: 114 bps
Appraised Cap: 6.07%
Appraised Cap Rate Spread: 114 bps

Loan Amount: $24,200,000
Term: 10 Years Fixed
Interest Only Period: 10 Years
Amortization Period: None
Interest Rate: 3.49%
Lender: KeyBank
LTV: 55.88%
Non-Recourse: Yes to Investor

DST Due Diligence & Advisory Services

(415) 336-9225

DISCLAIMER
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.