clear sky sunbelt opportunity- ppt
TRANSCRIPT
Clear Sky Capital
Sunbelt Strategies Fund Offering investors the opportunity to participate in the growth potential of the multifamily real estate market in Sunbelt States such as Arizona.
DISCLAIMER This presenta,on is intended for informa,on purposes only and does not cons,tute an offer to sell or a solicita,on to buy securi,es. No securi,es regulatory authority or regulator has assessed the merits of the informa,on herein or reviewed this presenta,on. This presenta,on is not intended to assist you in making any investment decision regarding the purchase of securi,es. Rather, the Fund has prepared an offering memorandum for delivery to prospec,ve investors which describes certain terms, condi,ons and risks of the investment and certain rights that you may have. This presenta,on is not intended for delivery to any person without the accompanying offering memorandum. If you did not receive an offering memorandum, please contact us to obtain one. You should review the offering memorandum with your professional advisers before making any investment decision. This presenta,on and the accompanying offering memorandum are intended for delivery only to, and par,cipa,on in the investment is restricted to investors to whom certain prospectus exemp,ons apply, as described in the offering memorandum. This presenta,on contains disclosures that cons,tute forward-‐looking informa,on under securi,es laws. Various assump,ons are applied in drawing conclusions set out in forward-‐looking informa,on, including assump,ons about the Sunbelt States real estate market, economic condi,ons, global financial crisis, availability of capital and government policy. The forward-‐looking informa,on herein is based (in whole or in part) upon risk factors which may cause actual results to differ materially from those contemplated in the forward-‐looking informa,on, including risks associated with: economic condi,ons, the global credit crisis, real estate markets, financing efforts, construc,on delays, cost overruns and regulatory changes. You should not place undue reliance on forward-‐looking informa,on and actual results may differ materially from the forward-‐looking informa,on herein. The foregoing statements expressly qualify any forward-‐looking informa,on contained herein. The Fund is not obligated to update or revise any forward-‐looking informa,on except as required by applicable law.
Who is Clear Sky Capital?
Management has over 17 years of experience in buying, redeveloping, managing and selling multifamily apartment
buildings in Canada and the U.S.
Clear Sky Capital is a private equity "rm with local investment management specializing in established multifamily apartment
buildings in strategic real estate markets.
Proven Track Record Project Number of
Units Location Purchase Price Date of Purchase Sale Proceeds Date of
Sale
Seacrest Apartments 109 Nanaimo, British Columbia CD$6,300,000 February
2004 CD$13,300,000 September 2012
Highland Townhomes 21 Nanaimo, British Columbia CD$810,000 January
2002 CD$2,000,000 April 2008
Panoramic Tower Apartments & Georgia
Towers Apartments 83 Campbell River,
British Columbia CD$3,150,000 October 2002 CD$8,080,000 June 2006/
March 2006
Seawind Apartments 24 Nanaimo, British Columbia CD$700,000 November
2000 CD$1,700,000 June 2006
Villa Lea Apartments 24 Edmonton, Alberta CD$525,000 May 1998 CD$745,000 June
2001
The Whitehouse Apartments 37 Edmonton, Alberta CD$624,000 March
1996 CD$1,248,000 June 2001
Sprucedale Apartments 21 Edmonton, Alberta CD$480,000 May 1997 CD$687,000 May
2001
Northland Arms Apartments 70 Edmonton, Alberta CD$1,700,000 October
1997 CD$2,500,000 October 2000
389 CD$14,289,000 CD$30,260,000
U.S. Property Acquisitions Project Number of
Units Location Purchase Price Date of Purchase Sale Proceeds Date of
Sale
Bethany Palms Apartments 22 Phoenix,
Arizona, USA US$547,000 July 2010 US$1,880,000 December
2013 Heritage Square
Apartments 120 Gilbert, Arizona, USA US$7,500,000 July
2011 - -
Mission Palms Apartments 125 Phoenix,
Arizona, USA US$6,250,000 April 2011 - -
Parkway Manor Apartments 24 Scottsdale,
Arizona, USA US$1,180,000 February 2012 - -
Arcadia Del Sol Apartments 260 Phoenix,
Arizona, USA US$11,750,000 May 2012 - -
Country Club Greens Apartments 68 Phoenix,
Arizona, USA US$4,000,000 February 2013 - -
Airmont Apartments 21 Phoenix, Arizona, USA US$940,000 September
2013 - -
Timberline Place 102 Flagstaff, Arizona, USA US$11,825,000 January
2014 - -
742 US$43,992,000 US$1,880,000
Clear Sky Capital strategically invests in regions that demonstrate three fundamentals for ideal multifamily property locations:
• High Population Growth • Historically High Employment • Recovering Real Estate Market
IDENTIFY REGION
“Prescott is one of the 10 best places to retire in the U.S.” – Wall Street Journal
INVESTMENT LOCATION
With a population of approximately 211,000 people, the Prescott Metropolitan Area, is the third largest metropolitan area in Arizona after Phoenix (4.2M) and Tucson (1.0M).
Prescott grew by 17.4% from 2000 to 2010, which is a much higher population growth rate than the U.S. average of 9.71%.
HIGH POPULATION GROWTH
United States Census Bureau -‐ 2010
PRESCOTT MAJOR EMPLOYERS Employer Industry
Yavapai Regional Medical Center Healthcare Yavapai County Government
Veterans Administration Medical Center Healthcare Prescott Uni"ed School District Education
Wal-Mart Retail City of Prescott Government State of Arizona Government
Fann Contracting Hwy/Heavy Construction Yavapai College Education
Embry-Riddle Aeronautical University Technology Chelton Avionics Manufacturing
Exsil Government Sturm, Ruger & Co. Firearms
HISTORICALLY HIGH EMPLOYMENT
• The PrescoR unemployment rate is 6.9% • Down from 9.2% in January 2013 • Ahead of the Arizona State average of 7.8%
Citytowninfo.com; United States Bureau of Labor Sta,s,cs – November 2013; Economic and Business Research Center, The University of Arizona
32.2% DROP
$246,600 (May 2007)
$143,200 (Feb 2012)
$167,100 (Nov 2013)
RECOVERING REAL ESTATE MARKET
Zillow Home Value Index -‐ PrescoR Home Prices and Home Values – Condo Prices (Includes data and transac,ons through 11/30/2013)
Prescott 10-Year Condo Values
Prescott is an ideal market for multifamily investment due to:
1. Historically low vacancy rates
2. Moderate household incomes combined with high average condo prices
Prescott - Rental Market
Prescott, Arizona Historically Low Vacancy Rates
Since 2005, vacancy rates in Prescott never reached 7%, even during the peak of the credit crisis from 2008 through 2010.
Prescott, AZ
4.74%
-
6.98%
6.91%
6.42%
6.07%
5.13%
3.56%
Prescott, Arizona Historically Low Vacancy Rates
Prescott, AZ
4.74%
-
6.98%
6.91%
6.42%
6.07%
5.13%
3.56%
As of 2012, the Prescott vacancy rate was 4.74%, 47% lower than the Arizona vacancy rate of 9.01% and 30% lower than the U.S average.
QUICK FACTS ABOUT PRESCOTT, AZ
Prescott (1) Phoenix (2)
Median Age 54.1 32.2
Median Household Income $44,278 $54,745
Condo Value Index(3) $167,100 $112,000
Prescott, Arizona Income-to-Condo Price
(1) PrescoR Census 2010. (2) City of Phoenix Planning & Development Research Team -‐ 2010 Census Summary File. USD
(3) hRp://www.zillow.com (Includes data and transac,ons through 11/30/2013) USD
Moderate household incomes combined with high average condo prices is ideal for multifamily investment.
Properties must provide two key methods of generating potential investment returns:
• Stable Cash Flow • Long Term Capital Appreciation
IDENTIFY PROPERTY
150-unit
Class “A” property
Built in 1999
Located in an 1150-acre master-planned residential and private golf community
• Heated pool and spa area • Private garage (select plans)
• Private balcony/patio • State-of-the-art "tness center • Resident clubhouse available for meetings and entertaining • Views of Granite Dells and Watson Lake (select plans)
• Adjacent to a Hale Irwin Signature 18-hole golf course • Attractive grounds with covered ramadas and barbecues
AMENITIES
Six dis>nc>ve one, two and three bedroom floor plans, includes: Full size washer and dryer, designer kitchen, dishwasher, refrigerator and microwave, ceiling fan, walk-‐in closet, and private deck or balcony with storage area.
UNIT TYPES
PROPERTY DETAILS 1. NO VACANCY
• Units at the Legacy at Prescott Lakes 100% leased (as of Dec 15, 2013)
• Waiting list for units to become available
2. HIGH TENANT CONCESSIONS • Discounted rent and tenant incentives average US$13,277 per month • 9.29% of Gross Rent lost due to concessions
PROPERTY DETAILS
3. RENT RATES BELOW MARKET • Average rental rates in Prescott have increased a cumulative 20.8% since 2005
• Since 2005, The Legacy at Prescott Lakes has increased rental rates by 0.3%
4. LOW PURCHASE PRICE • Units being acquired are substantially below replacement cost for approximately US$108,333 per unit • Average condo price in Prescott is US$167,100
The Fund has developed two exit scenarios for The Legacy at Prescott Lakes: 1. Sell The Legacy at Prescott Lakes as an apartment building; or 2. Sell individual condominium apartments as the market improves over the same time frame. The exit scenario which is ultimately implemented will depend upon a number of factors including the lending terms and the potential upside in the “for sale” condominium market. Anticipated Holding Period: 4 to 6 Years
EXIT STRATEGY
80% pro"t share for Cash-Flow distributions to the investor.
80% pro"t share of Sale Proceeds received by the investor.
Cash Flow to investors are paid on a quarterly basis.
Cash #ow distributions largely treated as a return-of-capital.
Sale distributions treated as a capital gain.
No U.S. Tax Return
Investment Proceeds & Distributions
* subject to reaching certain investment thresholds prescribed under the Tax Act.
Sunbelt Strategies Fund - Investment Offering
Securities Offered: Trust Units, which are Class A trust units of the Fund. Price Per Security: CD$10 per Trust Unit. Minimum Subscription: CD$5,000 (500 Trust Units). Eligible for Registered Plans: RRSP, Spousal RRSP, LRSP, LIRA, RRIF, LIF, LRIF, RESP, DPSP, RPP or TFSA.*