riverview apartments · riverview’s units feature expansive layouts in multiple condo-like...

RIVERVIEW APARTMENTS138 UNITS | CANTON, METRO ATLANTA, GACANTON’S PREMIERE CLASS A ASSETUNLIMITED VALUE-ADD UPSIDE

OCTOBER 2016 | Collins Group LLC

OCTOBER 2016 | Collins Group LLCRIVERVIEW APARTMENTS

Investment Disclosures

THE INVESTMENT OPPORTUNITY HEREBY DESCRIBED HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, NOR HAS IT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND NO SUCH COMMISSION HAS PASSED UPON THE ADEQUACY OR ACCURACY OF THIS INVESTMENT OVERVIEW. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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You should read the following information relating to the conduct of this investment and your obliga-tions in connection with receiving this Investment Overview.As a condition to accepting delivery of this Investment Overview, you agree to keep its contents, and any information obtained by you in connection with this investment (the “Investment”), in strictest confidence. In making an investment decision, you must rely on your own examination of the LLC, the Managing Member and the terms of this Investment, including the merits and risks involved. You should not construe the contents of this Investment Overview as legal, tax or business advice. This Investment Overview, as well as the nature of an investment in the LLC, should be reviewed by you and your in-vestment, tax, legal, accounting and other advisors.No offering literature or advertising in any form will or may be employed in the Investment, except for this Investment Overview (including the exhibits and any amendments and supplements) and the documents summarized in this Investment Overview. No person (other than the Managing Member) is authorized to give any information or to make any representation not contained in this Investment Overview or in the documents summarized herein and, if given or made, you must not rely on such oth-er information or representation. The information contained in this Investment Overview has been supplied by the Managing Member. This Investment Overview contains summaries, believed by the Managing Member to be accurate, of certain documents, but these summaries are not a complete restatement of all of the material terms of those documents. Copies of such documents are available on a confidential basis at the Manag-ing Member’s offices. The delivery of this Investment Overview does not imply that the information contained herein is correct at any time subsequent to its date. In addition, the structure of the LLC is subject to change until the date of closing. This Investment Overview has been prepared solely for the benefit of prospective investors interested in subscribing for the purchase of investment interests (“Interests”) in the LLC, and constitutes an offer only to the person or entity whose name appears on the cover page. Distribution of this Invest-ment Overview to any person or entity other than the named offeree and those persons retained to advise such prospective investor is unauthorized, and any reproduction of this Investment Overview, in whole or in part, without the Managing Member’s prior written consent is prohibited. By accepting delivery of this Investment Overview, you agree to return it and all other documents you receive in connection with the Investment to the Managing Member if you do not subscribe for the purchase of any interests, or your subscription is not accepted. Upon request you may ask questions of, and receive answers from, the Managing Member and authorized representatives of the Managing Member con-cerning this Investment, and obtain any additional information necessary to verify the accuracy of the information contained in this Investment Overview, to the extent that such information is available without unreasonable effort or expense.



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The Offering is being made in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) and the related regulations for an offer and sale of securities that does not involve a public offering. Accordingly, you will not be able to transfer, sell or otherwise dispose of securities you acquire in this Investment, except as permitted under the Securities Act, the LLC Agreement, and applicable state securities laws pursuant to registration or exemption therefrom. You should proceed only on the assumption that you may have to bear the economic risk of an invest-ment in the Investment for an indefinite period of time.Notwithstanding anything herein to the contrary, each prospective investor (and each employee, rep-resentative or other agent of each prospective investor) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of an investment in the LLC and/or LLC and all materials of any kind (including opinions or other tax analyses) that are provided to the investor relating to such tax treatment or tax structure, it being understood and agreed for this purpose, that (1) the name of, or any other identifying information regarding, the Investment and any existing or future investor (or any affiliate thereof ) in the Investment, or any investment or transaction entered into by the Investment, (2) any performance information relating to the Investment or any of its investments or (3) any performance or other information relating to investments sponsored by the Managing Mem-ber do not constitute such tax treatment or tax structure information. Acceptance of this Investment Overview by prospective investors constitutes an agreement to be bound by the foregoing terms.

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The Interests have not been registered under the Florida securities act.If sales are made to five (5) or more investors in Florida, any Florida investor may, at his option, void any purchase hereunder within a period of three (3) days after (a) he first tenders or pays to the issuer, an agent of the issuer or an escrow agent the consideration required hereunder or (b) the availabili-ty of that privilege is communicated to the investor, whichever occurs later. To accomplish this, it is sufficient for a Florida investor to send a letter or telegram to the Managing Member within such three (3) day period, stating that he is voiding and rescinding the purchase. If an investor sends a letter, it is prudent to do so by certified mail, return receipt requested, to ensure that the letter is received and to evidence the time of mailing.



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Prospective investors located outside of the U.S. should review “Information Required by Securities Laws of Certain Jurisdictions” which is available from the Managing Member upon request.

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THE DISCUSSION CONTAINED IN THIS OFFERING MEMORANDUM IS NOT GIVEN IN THE FORM OF A COVERED OPINION, WITHIN THE MEANING OF CIRCULAR 230 ISSUED BY THE U.S. SECRETARY OF THE TREASURY. THUS, THE MANAGING MEMBER IS REQUIRED TO INFORM YOU THAT YOU CANNOT RELY UPON ANY ADVICE CONTAINED IN THIS OFFERING MEMORANDUM FOR THE PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES. THIS DISCUSSION IS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF TRANSACTIONS OR MATTERS DESCRIBED IN THIS OFFERING MEMORANDUM. ANY PERSON CONSIDERING AN INVESTMENT IN THE JOINT VENTURE SHOULD SEEK ADVICE BASED ON THE PERSON’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.


Collins Group Company Profile

About US

The principals are members of the Parnes family, with Ari Parnes at the helm. For over twenty years, Collins Group has built an impressive portfolio of multifamily acquisitions, with specific focus in the southeast market. Over the past 12 years, Collins Group has successfully bought and sold multifamily properties in Georgia, Alabama, Florida, and Tennessee with a current focus in the Greater and Suburban Atlanta market.

Over the past three years, Ralph Frankel, of Toronto’s prolific Frankel real estate and financial-services family, has partnered with the Collins Group on many successful transactions. Mr. Frankel has worked as an investor throughout Canada for many decades, and was previously a Goldman Sachs executive.


Property Prime for Value-Add Rent Growth

EXECUTIVE SUMMARY

Collins Group LLC is pleased to announce the acquisition of the 138-unit Riverview apartment community located in Metro Atlanta (Canton) GA. Built in 2007, Riverview is a trendy mid-rise, Class A asset in Canton, Georgia, the seat of Cherokee County and one of Atlanta’s most rapidly expanding northwest suburban areas. Situated along the Etowah River, Riverview is one of Cherokee County’s newest apartment communities offering the most unique setting of any multifamily community in the area. By implementing an interior renovation and amenities upgrade program, Collins Group LLC will position Riverview as the Canton submarket’s cornerstone luxury asset. The property has enjoyed historically high demand, reporting as 100% occupied as of October 2016 with a wait list. The property’s purchase price is $12,350,000, with an additional $1,000,000 budgeted for upgrades and renovations. Total deal capitalization, including all acquisition costs and the renovation and upgrade budget, is $13,350,000. Through existing brokerage relationships, Collins Group successfully acquired Riverview via a pre-emptive offer before the property was brought to market.

Completed in 2007, the property offers a large riverfront site along with Etowah River with extensive landscaping and amenities. Excluding installation of a new dog park in 2015, Collins Group has acquired the community in its as-built condition. Riverview is a fully-sprinklered, and elevator-serviced building featuring traditional brick and hardiplank facades. Access to units is via wide, air conditioned corridors.


Property Prime for Value-Add Rent Growth

EXECUTIVE SUMMARY

Riverview’s units feature expansive layouts in multiple condo-like configurations, appealing to a broad resident base. Tasteful, upscale interiors are finished with 9’ ceilings with crown molding, maple cabinetry, granite countertops, faux wood flooring, and microwave ovens. The property features spacious three-bedroom units ranging up to 2,755 SF in size. 76 units include washer/dryer appliances. Riverview’s location in downtown Canton provides residents with unparalleled access a solid base of national retailers and to rapid growth in Cherokee County and northwest Atlanta mar-kets. This is a thriving live-work-play location. Recently rank #1 among “The 10 Best Places in Georgia,” the city of Canton boasts beautiful residential neighborhoods, including the historic downtown residential district. The asset boasts excellent highway accessibility. It is within three I-575 interchanges providing direct access to northwest Atlanta’s job centers in Wood-stock, Kennesaw, and the Cobb Platinum Triangle. Riverview maintains historically high occupancy and is currently 100% occupied with a wait-ing list. The strong demand is supported by a white-collar resident base with a discerning taste for modern, Class A, and condo-like amenities. Further, Riverview’s stable resident base is supported by a predominant 55+ population, producing a quiet community with longer term residents and very low turnover. As-built in 2007 and under lease-up in 2008, the property intended to operate as a luxury senior housing community.


Investment Rationale

While Riverview is an attractive, well-maintained luxury community, the current unit finishes and select community amenities are dated in their as-built condition. To reflect the discriminating taste of apartment renters today, substantial upgrades across the property are desired. The cornerstone of our renovation/upgrade program is first: to model Riverview after the sleek, modern unit interiors emblematic of newer multifamily product that saturates the Atlanta submarket. The second key aspect of the renovation/upgrade program is to maximize the property’s community amenities. There is proven demanded for both higher finishes and upgraded community amenities both at the property and among the property’s direct competitors. Currently, 6 upgraded units earn $200 premium on top of base rents. However, Riverview’s in-place rents significantly lag behind its direct competitors. As of September 2016, Riverview’s average market rent posted at $812 while upgraded competitors reported market rents at $1,039, $1,079, $1,092, and $1,119. Upon completion of the value add program, Riverview will close the $270 average gap between Riverview and its direct competition.

Market fundamentals provide a strong foundation for our value-add renovation strategy, particularly drawing on the sites’ price-point advantage relative to new construction product. Collins Group is acquiring Riverview at an estimated 60% discount-to-replacement costs. This is further supported by our economic advantage given that newer Class-A mid-rise product in the submarket is reportedly sold at a $47,000,000, a cost of at least $171 per square foot, creating a structural advantage for the property, with its purchase price at $13,350,000, or ~$129 per square foot.

OCTOBER 2016 | Collins Group LLCRIVERVIEW APARTMENTS OCTOBER 2016 | Collins Group LLC


Maximize Amenities & Unit Interiors

While Riverview showcases premier physical and locational qualities, potential exists to elevate its relative market position. Currently, Riverview is both under-amenitized and underutlizied. We believe there is ample opportunity to modify existing common area and community spaces.

A key component of our investment strategy is to expand Riverview’s underutilized community amenities. Today’s renters demand on-trend community amenities such as fitness centers, business centers, resident lounges, movie/screening rooms, dog/pet parks, and outdoor entertainment areas. The previous owner installed a dog park and fitness center to meet resident demand. These expansions will place Riverview at the top of its class.

Renovation / Upgrade Plan


Renovation/Upgrade Plan

PROPOSED COMMUNITY UPGRADES

Following the recommendation of Riverview’s on-site management team, Collins Group proposes the following upgrades and renovations to maximize long-term rent growth and asset appreciation. First, to create an impactful first impression, the building’s lobby/foyer will be modernized and repainted. Building interiors currently lack a sleek, modern appearance. Throughout the property, lighting fixtures, carpeting and paint will be refreshed in common areas.

Next, we will assess how to reconfigure the front leasing office. Interior walls in and underutilized spaces will be opened to create a more expansive feel, and to allow the placement of grander fitness centers and additional amenities. Additionally, the clubhouse is currently a dated and underutilized space in the building’s basement. It will be modernized and repositioned as a multi-functional space: an attractive resident lounge, resident screening room, or common room. We will consider incorporating Wi-Fi throughout the property’s common areas would broaden the property’s target market.

While there is currently a dog park on the property, we aim to expand the dog park and pet-care amenities to the core amenity package. It is important to maximize the property’s lush landscaping and outdoor appeal. To do so, we will install an upgraded outdoor entertaining area to include a picnic/grilling area, which will be anchored by gas grilling stations and picnic cabanas.

By design, Riverview was intended to operate as a senior housing community. The property is perfectly positioned to transition to a premier active senior rental community. The seller bought the property note at a deep discount, while the construction note was in foreclosure. Riverview’s existing resident profile is predominantly age 55+ (33%+); therefore, an organic transition to a senior housing community is within reach. Riverview already benefits from a high renewal rate and a stable 100% occupancy; senior housing communities typically produce longer term residency and very low turnover. Where possible, where will consider implementation of senior-oriented services such as transportation, coupled with enhanced amenities, will promote marketing, boost rents, and ensure long-term occupancy and asset appreciation.

RIVERVIEW APARTMENTS OCTOBER 2016 | Collins Group LLC


Renovation/Upgrade Plan

PROPOSED UNIT UPGRADES

Unit renovations will largely continue along the scope used to date by the seller. Differences will include the use of a more modern styled door for cabinetry, glass subway tile for backsplash, the addition of stainless steel appliance package, and adding washer/dryers appliances to all remaining units. All units feature washer/dryer connections. Paint colors throughout the unit will also be changed to a more modern gray with white trim. Additional unit renovations will include installation of wood-look vinyl plank flooring and upgraded lighting fixture package. We believe the combination of updated amenities and unit renovations will superbly position units Riverview to continue achieving rental premiums of at least $200 per month – as they have to date on renovation, and an additional $40 for washer/dryer units. Unit renovations are expected to continue across the portfolio through the initial 4 years of ownership.

ENVISIONED UNIT UPGRADES


Economic Outlook

METRO ATLANTA AND CHEROKEE COUNTY

Elevated along the Etowah River in scenic down-town Canton, Riverview’s unmatched location offers an attractive local base of national retailers, highly ranked and expanding healthcare facilities, and quick access to affluent northwest Atlanta suburbs. Situated 25 miles northwest of downtown Atlanta via Interstate 575, Cherokee County is part of the 20-county Atlanta MSA, adjoining Cobb to the north and Fulton to the west. Incorporated areas include Canton and Woodstock. With a low cost of living, high-quality educational opportuni-ties, and superior health care, Cherokee County is sought-after bedroom community of Atlanta. Riverview is strategically positioned within 1.5 miles of three I-575 interchanges, offering direct connectivity to local employment hubs and expanding north-west Atlanta job centers. The Atlanta Regional Commission forecasts Cherokee County as a regional leader in job growth during the next 30 years, adding an estimated 72,500 jobs by 2040. As of October 2016, Cherokee County reports the lowest unemployment rate in the state of Georgia at 4.1%. Across every sector, Cherokee County thrives amid actively targeted investments, an award-winning Chamber of Commerce, and burgeoning film industry. Cherokee County schools recently reported the second highest SAT score in Georgia. As a certified “Camera Ready” designated community by Georgia’s

Economic Development Office, Cherokee County has 61 film prospects in the pipeline as of October 2016. With Cherokee County at-large is in expansion mode, Canton benefits from this direct path of progress. Within three years, 77 percent of the community’s industries plan to expand within with an estimated capital investment nearly $90 million, according to Cherokee County’s Office of Economic Development. Canton’s local employment base is anchored by two prolific healthcare providers: WellStar and Northside Hospital. In spring 2017, Northside Hospital-Cherokee will open its $300M state-of-the-art hospital facility, expanding its current jobs impact of 1,500 and 600 physicians. By 2017, Adidas will complete its first U.S. factory in Canton.

Lively Downtown Woodstock


Historic Downtown Canton


RENT GROWTH IN SUBMARKET

Economic Outlook

METRO ATLANTA APARTMENT MARKET The Atlanta apartment market exhibited strong indicators throughout 2015 and strong market conditions are continuing into 2016. The 1st Quarter 2016 average effective rent represented its highest ever, reflecting growth of 22% since YE10 and 8% growth since YE13.

RENT GROWTH IN CHEROKEE’S HIGH BARRIERS TO ENTRY SUBMARKET

The Cherokee submarket has seen little multifamily development in the since the early 2000s. Zero units have delivered within a 5-mile radius of Riverview since its 2007 construction. With no new competitive properties in the development pipeline, average vacancy in this submarket has compressed to a record low of 2.4% and is projected to stay within this area through 2020. Average submarket effective rents have seen strong organic growth, demonstrated by 13.8% growth since 2014.

DIRECT RENT COMPARABLES

PROPERTY UNITS BUILT OCC. AVG. SF AVG. EFF. RENT

RIVERVIEW PRESS | APARTMENT MARKET

UNIT MIXRIVERVIEW, 138 UNITS

96%Occupancy:59 Anderson AvenueCanton, GA 30114

Completed: 2007

COMMUNITY AMENITIESClubhouseCommon Area ReceptionControlled Building AccessDog Park/Play AreaElevator(s)Etowah River FrontageFitness Center (Renovated)Grilling/Picnic Area(s)Leasing/Business CenterMail RoomResident Business CenterSprinklered Building(s)Storage Units Available (38 $25-$95)

UNIT FEATURES9' Ceilings w/Cr. Molding (select)Breakfast Bar/Pass-Through (select)Cable & Internet ReadyCeiling Fans (select)Den/Office/Study (select)Frost-Free RefrigeratorFully Equipped KitchenGranite CountertopsMicrowave OvenPatio/Balcony (select)Separate Dining Area (select)Separate Shower Stall (select)Sunroom/Solarium (select)W/D Appliances Rented (71 Units, $25)W/D ConnectionsWalk-In Closets (select)Window BlindsWood-Look Flooring

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn 57 560 $729 $1.30$729 1BR-1BA, Gdn L 8 750 $769 $1.03$769 2BR-1BA, Gdn 60 768 $839 $1.09$839 1BR-1BA, Gdn Den 3 780 $829 $1.06$829 1BR-1BA, Gdn XL 2 860 $789 $0.92$789 1BR-1BA, Gdn XXL 1 1,000 $819 $0.82$819 2BR-2BA, Gdn L 1 1,082 $919 $0.85$919 2BR-2BA, Gdn L 2 1,200 $979 $0.82$979 3BR-2BA, Gdn 4 2,755 $1,569 $0.57$1,569

138Total / Avg. 750 $812 $1.08$812

TYPE # %

UNIT MIXBREAKDOWN

1 BR2 BR

3 BR

1 BR 71 51%2 BR 63 46%3 BR 4 3%

CUSHMAN & WAKEFIELD

Riverview 138 2007 100% 750 $812

1


UNIT MIXATLANTIC BRIDGEMILL, 236 UNITS

94%Occupancy:1000 Preston Glen CircleCanton, GA 30114

Completed: 2000

COMMUNITY AMENITIESCar Care CenterClubhouse/Leasing CenterConference RoomControlled Access GatesDetached Garages ($100)Fitness CenterLaundry FacilityPlaygroundResident Business CenterSwimming PoolTennis Court (Lighted)WiFi in Amenity Areas

UNIT FEATURES9' Ceilings (select)Breakfast Bar/Pass-ThroughCable & Internet ReadyCrown MoldingExterior Storage RoomFF Refrigerator w/IcemakerFireplaceLaundry/Utility RoomMicrowave OvenPatio/BalconySeparate Dining AreaSunroom/Solarium (SR, select)Vaulted Ceilings Available (select)W/D ConnectionsWalk-In Closets

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn 28 767 $1,040 $1.36$1,040 1BR-1.5BA, Gdn 14 916 $1,176 $1.28$1,176 1BR-1.5BA, Gdn SR 16 1,046 $1,010 $0.97$1,010 2BR-2BA, Gdn 42 1,062 $985 $0.93$985 2BR-2BA, Gdn 44 1,188 $1,070 $0.90$1,070 2BR-2BA, Gdn SR 24 1,189 $1,055 $0.89$1,055 3BR-2BA, Gdn 18 1,296 $1,207 $0.93$1,207 2BR-2BA, Gdn SR 30 1,328 $1,123 $0.85$1,123 3BR-2BA, Gdn SR 20 1,422 $1,337 $0.94$1,337

236Total / Avg. 1,136 $1,092 $0.96$1,092

TYPE # %

UNIT MIXBREAKDOWN

1 BR

2 BR

3 BR

1 BR 58 25%2 BR 140 59%3 BR 38 16%

CUSHMAN & WAKEFIELD

Atlantic Bridgemill 236 2000 94% 1,136 $1,092

2


UNIT MIXHERITAGE AT RIVERSTONE, 240 UNITS

100%Occupancy:101 Heritage DriveCanton, GA 30114

Completed: 2001

COMMUNITY AMENITIESBoat & RV Parking (free)Clubhouse/Leasing CenterControlled Access GatesDetached Garages (40 @ $89)Fitness CenterGrilling/Picnic Area(s)Laundry FacilityPlaygroundResident Business CenterStorage Units Available (24 @ $15)Swimming PoolTanning BedTennis Court (Lighted)Valet Trash Service (mandatory $25)WiFi in Amenity Areas

UNIT FEATURESBreakfast Bar/Pass-ThroughBuilt-in BookshelvesCable & Internet ReadyCeiling FansComputer Desk/Niche (select)Entry ClosetExterior Storage Room (select)FF Refrigerator w/IcemakerFireplace (select)Floor Level & View Premium ($5-$15)Fully Equipped KitchenKitchen PantryLinen ClosetPatio/BalconySeparate Dining Area (select)Track LightingVaulted Ceilings Available (select)W/D ConnectionsWalk-In ClosetsWindow BlindsWood-Look Flooring

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn 40 725 $876 $1.21$896 1BR-1BA, Gdn 48 925 $891 $0.96$911 2BR-2BA, Gdn 68 1,099 $1,056 $0.96$1,076 2BR-2BA, Gdn 60 1,122 $1,086 $0.97$1,106 3BR-2BA, Gdn 24 1,326 $1,216 $0.92$1,236

240Total / Avg. 1,030 $1,017 $0.99$1,037

TYPE # %

UNIT MIXBREAKDOWN

1 BR

2 BR

3 BR

1 BR 88 37%2 BR 128 53%3 BR 24 10%

CUSHMAN & WAKEFIELD

Heritage at Riverstone 240 2001 100% 1,030 $1,017

3


UNIT MIXALEXANDER RIDGE (TC), 272 UNITS

98%Occupancy:102 Alexander DriveCanton, GA 30114

Completed: 2002

COMMUNITY AMENITIESCar Care CenterClubhouse/Leasing CenterControlled Access GatesCourtesy PatrolFitness CenterGrilling/Picnic Area(s)Laundry FacilityPlaygroundResident Business CenterSwimming Pool

UNIT FEATURES9' Ceilings w/Cr. MoldingCable & Internet ReadyCeiling FansFF Refrigerator w/IcemakerFully Equipped KitchenGarden TubsMicrowave OvenPatio/Balcony (w/Storage Room)W/D ConnectionsWalk-In ClosetsWindow Blinds

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn, Mkt 28 801 $900 $1.12$900 1BR-1BA, Gdn, TC 50 801 $693 $0.87$693 2BR-2BA, Gdn, Mkt 42 1,002 $1,000 $1.00$1,000 2BR-2BA, Gdn, TC 70 1,002 $824 $0.82$824 3BR-2BA, Gdn, Mkt 28 1,200 $1,100 $0.92$1,100 3BR-2BA, Gdn, TC 54 1,200 $933 $0.78$933

272Total / Avg. 1,004 $885 $0.88$885

TYPE # %

UNIT MIXBREAKDOWN

1 BR

2 BR

3 BR

1 BR 78 29%2 BR 112 41%3 BR 82 30%

CUSHMAN & WAKEFIELD

Alexander Ridge (TC) 272 2002 98% 1,004 $885

4


UNIT MIXWALDEN CROSSING, 264 UNITS

94%Occupancy:100 Walden CrossingCanton, GA 30114

Completed: 2002

COMMUNITY AMENITIESAdditional Storage ($85/month)Car Care CenterChildren's Activity CenterClubhouse/Leasing CenterControlled Access GatesDetached Garages ($125/month)Dog Park/Play AreaFitness CenterGrilling/Picnic Area(s)Laundry FacilityPlaygroundResident Business CenterSwimming PoolTennis Courts (Lighted)WiFi Available

UNIT FEATURES9' Ceilings w/Cr. MoldingBlack AppliancesBreakfast Bar/Pass-ThroughBuilt-in Desk/Workstation (select)Cable & Internet ReadyCeiling FansCeramic Tile Tub SurroundChair MoldingFF Refrigerator w/IcemakerFully Equipped KitchenGranite-Look CountertopsMaple CabinetryPatio/Balcony (w/Storage Room)Stainless Steel Appliances (select)Sunroom Available (select)Vaulted Ceilings Available (select)W/D ConnectionsWalk-In ClosetsWindow Blinds

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn 36 732 $948 $1.30$955 1BR-1BA, Gdn 46 916 $1,018 $1.11$1,025 1BR-1BA, Gdn Loft 20 1,013 $993 $0.98$1,000 2BR-2BA, Gdn 110 1,157 $1,094 $0.95$1,101 2BR-2BA, Gdn SR 24 1,252 $1,103 $0.88$1,110 3BR-2BA, Gdn 20 1,425 $1,268 $0.89$1,275 3BR-2BA, Gdn SR 8 1,532 $1,268 $0.83$1,275

264Total / Avg. 1,086 $1,072 $0.99$1,079

TYPE # %

UNIT MIXBREAKDOWN

1 BR

2 BR

3 BR

1 BR 102 39%2 BR 134 51%3 BR 28 11%

CUSHMAN & WAKEFIELD

Walden Crossing 264 2002 93% 1,086 $1,079

5


UNIT MIXHARBOR CREEK, 316 UNITS

95%Occupancy:501 Harbor Creek ParkwayCanton, GA 30303

Completed: 2003

COMMUNITY AMENITIESCar Care CenterClubhouse/Leasing CenterControlled Access GatesDetached Garages ($120)Dog Park/Play AreaFitness CenterGuest Suite AvailableLaundry FacilityPlaygroundResident Business CenterSwimming PoolTennis CourtsWiFi Available

UNIT FEATURESBuilt-in Desk/WorkstationCable & Internet ReadyCeiling FansCrown & Chair Moldings (select)FF Refrigerator w/IcemakerFireplaceFloor Level & View PremiumFully Equipped KitchenMicrowave OvenPantryPatio/BalconyScreened Porch (select)Vaulted Ceilings AvailableW/D ConnectionsWindow BlindsWood Plank Flooring

UNIT TYPE # UNITS SIZE (SF) AVG. EFF. RENT EFF. RENT PSFAVG. MKT. RENT 1BR-1BA, Gdn 121 806 $983 $1.22$1,033 2BR-2BA, Gdn 76 1,143 $1,076 $0.94$1,126 2BR-2BA, Gdn, Villa 16 1,178 $1,275 $1.08$1,325 2BR-2BA, Gdn 55 1,181 $1,068 $0.90$1,118 3BR-2BA, Gdn 48 1,435 $1,206 $0.84$1,256

316Total / Avg. 1,067 $1,069 $1.00$1,119

TYPE # %

UNIT MIXBREAKDOWN

1 BR

2 BR

3 BR

1 BR 121 38%2 BR 147 47%3 BR 48 15%

CUSHMAN & WAKEFIELD

Harbor Creek 316 2003 95% 1,067 $1,119


Offering Summary

Investors will subscribe for interests in a special purpose LLC, which has been formed by Collins Group LLC, to be the sole owner of the multifamily residential real estate property known as Riverview.

Riverview will be managed by Collins Group LLC. Collins Group principals, (Ari Parnes, Jay Herman, and Ralph Frankel), control the Sponsor and will be responsible for all decision making relating to the investment.

Collins Group LLC principals will contribute not less than 10% of the common equity for the purchase, improvement and operation of Riverview Apartments. The particulars of the investment structure and how profits and losses are distributed will be contained in the LLC operating agreement.


Offering Summary

INVESTMENT TERMS AND STRUCTURE

Total Cost: $12,350,000 Capital Expenditures: $1,000,0000 Closing Costs: $150,000Total Equity Investment: $4,500,000* *Total capital utilization is $4,500,000, of which Collins Group principals contribute a minimum of 10%. Priority Return: 8% annual return, distributions made quarterly Excess Profit Split: 70% in favor of the equity investor and 30% in favor of the Sponsor groupTerm: Open ended Origination Fee: In exchange for its contribution of the purchase and sale contract for the purchase of Riverview Apartments, Collins Group will receive a deemed equity contribution equal of 1% of the total cost of the building. Such fee shall not be paid in cash at closing and will be retained by Collins Group principals. The fee will be realized by a profitable capital event such as sale or refinancing, in excess of the original cost.

LOAN SUMMARY

The terms below reflect the indicative terms, which will become the actual terms of the loans at the time of rate lock, prior to the closing of the purchase.Lender: Freddie Mac Loan Amount: $9, 000, 0000; comprised of an individual property loanTerm: 10 years, 5 years interest onlyInterest Rate: 3.11% / 2.59% above 30-day LIBORInterest Only: 5 YearsOrigination Fee: 1% (paid to Greystone Capital Markets)

LOAN NOTES

1) Ari Parnes and Ralph Frankel will sign recourse carve outs on the loan. The loans are non-recourse to the Limited Liability Company and its investors.2) The loans will be secured by a single mortgage. The loan is will operate at a 3-year interest rate cap for a minimum of 3 years. 3) Two of the Sponsor’s principals will sign certain recourse carve out guaranties, which provide personal liability to the Sponsor’s principals upon the occurrence of certain enumerated “bad boy acts” committed by the borrower or its principals.4) All loan terms are subject to change prior to rate lock.


Physical Property Description

Property Name: RiverviewSales Price: $12,350,000Number of Units: 138Year Completed: 2007Lease-Up Year: 2008

Stories: 4 StoriesAverage Unit Size: 750 SFResidential Square Footage: 103,562 SF Address: 59 Anderson Avenue, Canton, GA 30114County: Cherokee CountySite Size: 7.55 AcresSite Density: 7.55 Acres/18.3 Units per AcreParking: 273 Spaces / 2 per Unit

Buildings: Single four-story elevatored residential building with interior corridors, common area offices, and activity rooms. Thirty-eight storage units range from 25 SF to 240 SF. One 192 SF unit is used as maintenance shop.

Improvements: In 2016, interior stairwells were painted and asphalt was repaired. In 2015, all building exteriors were painted. In 2014, the property added a bark park and reno vated the fitness center. Finishes: 9’ Ceilings with crown molding, painted walls and ceilings; carpeted living areas; faux wood vinyl entry, kitchen, and bathroom floors; window blinds; paneled interior doors; ceiling fans; track lighting; and chandeliers. All units are equipped with W/D connections; 71 units are equipped with W/D appliances (at a $40 premium rent). Construction: Wood-frame on concrete slab with lightweight concrete upper level subfloors. Exteriors are painted hardiplank with stacked stone and brick accents.

HVAC: Eight units have electric heat pump systems with closet-mounted air handler and exterior pad-mounted heat pump. The remaining 130 units have PTAC through- wall HVAC systems. Electric/Gas: Units are all electric and individually metered.

Plumbing: PVC domestic supply and PVC waste lines. Units equipped with 40-gallon electric water heater.

Life Safety: Building is fully sprinklered. Units are equipped with hard-wired smoke detectors with battery back-up. Property served by 2 hydrants, 22 fire alarm pulls, and 5 hose connection bibs.


Subtitle Here• Etowah River Front• Leasing Center• Resident Business Center• Controlled Building Access• Interior Corridors• Elevator-Serviced Building• Resident Activity Room• Storage Rooms• Sprinklered Building• Fitness Center• Dog Park• Walking/Jogging Trails

Community Amenities

Subtitle Here• 9’ Ceilings w/Crown Molding*• Ceiling Fans• Faux Hardwood Floors• Fully Equipped Kitchen• Granite Countertops• FF Refrigerator with Icemaker• Microwave Oven• Breakfast Bar*• Separate Dining Area*• W/D Connections• W/D Appliances (76 Units)• Separate Shower Stall*• Walk-In Closets*• Window Blinds• Private Patio/Balcony*• Cable & Internet Ready

Unit Amenities



Disclosures

FEES AND MANAGER RESPONSIBILITIES Upon closing, Collins Group, LLC will receive a deemed equity contribution of 1% of the total deal capitalization, which will be invested with all other investor capital in the transaction as common equity. Collins Group LLC will be reimbursed for all costs incurred by this transaction.

Upon purchase, Collins Group LLC will provide active asset management services, for which it will receive an asset management fee, paid monthly in arrears, equal to 2% of total collected income. As asset manager, Collins Group LLC maintains overall responsibility to establish strategic direction for the investment and the management of Riverview Apartments to ensure that all management and investment plans are executed efficiently. This includes accountability to engage day-to-day property management for the assets, to pay expenses, disburse cash flows, produce quarterly financial reports and oversee the employees of the properties, as well as engage service providers to implement the renovation and construction plan, and oversee all facets of the LLC’s operations.

As asset manager, Collins Group LLC and its agents may perform additional services for the partnership for which fees may be payable, such as construction management. Under the partnership operating agreement, all such arrangements must be commercially reasonable and on such terms as would be obtainable in an arms-length transaction.

Collins Group LLC will act on behalf of members to distribute investor cash flows. Priority returns equal to 8% annually will be paid out on a quarterly basis in arrears, within 30 days of quarter end. On a quarterly basis excess cash flows will also be disbursed, with 70% distributed to the members and 30% to Sponsor group as available, with a catch-up payment after the fourth quarter. All distributions will be at the sole discretion of Collins Group LLC

PROPOSED UNIT UPGRADES

Unit renovations will largely continue along the scope used to date by the seller. Differences will include the use of a more modern styled door for cabinetry, glass subway tile for backsplash, the addition of stainless steel appliance package, and adding washer/dryers appliances to all remaining units. All units feature washer/dryer connections. Paint colors throughout the unit will also be changed to a more modern gray with white trim. Additional unit renovations will include installation of wood-look vinyl plank flooring and upgraded lighting fixture package. We believe the combination of updated amenities and unit renovations will superbly position units Riverview to continue achieving rental premiums of at least $200 per month – as they have to date on renovation, and an additional $40 for washer/dryer units. Unit renovations are expected to continue across the portfolio through the initial 4 years of ownership.

ENVISIONED UNIT UPGRADES


FINANCIALS

Riverview Apartments

2008 ConstructionPurchase Price $12,350,000Closing Costs $150,000Capital Upgrades $1,000,000Total Cost $13,500,000First Mortgage -$9,000,000Owners' Equity $4,500,000

138 Units Historical YR 1 YR 2 YR 3 Yr 4Market Rent 1,346,784 1,349,544 1,349,544 1,349,544 1,349,544

Gross Potential Rent $1,346,784 $1,349,544 $1,349,544 $1,349,544 $1,349,544 Recovery of Loss To Lease $0 $72,204 $102,713 $102,713 $102,713 Washer/Dryer Premiums $0 $10,560 $33,360 $38,400 $38,400 Upgrade Income - 6 units/month $130/month premium $0 $51,480 $163,800 $215,280 $215,280 Organic Rent Growth-Yr1 4%, Yr2 4%, Yr3 4%, Yr4 4% $0 $58,008 $124,982 $201,860 $284,717

Vacancy, Concessions, Bad Debt, Loss to Lease (94,800) (125,655) (125,655) (125,655) (125,655)TOTAL RENTAL INCOME $1,251,984 $1,416,141 $1,648,744 $1,782,142 $1,864,999

Other Income 198,204 200,220 206,227 212,413 218,786TOTAL OTHER INCOME $198,204 $200,220 $206,227 $212,413 218,786TOTAL INCOME $1,450,188 $1,616,361 $1,854,971 $1,994,555 $2,083,785EXPENSES

Salaries & Related 209,684 180,000 183,600 187,272 191,017Maintenance 41,500 52,692 56,907 60,891 62,109Advertising & Administrative 95,000 84,252 85,937 87,656 89,409Management- 5% (Includes 2% Asset Management Fee) 58,008 80,818 82,434 84,083 85,765Utlities 120,000 119,628 122,021 124,461 126,950Insurance 69,750 53,736 54,811 55,907 57,025Taxes 78,000 144,000 144,000 144,000 144,000

TOTAL EXPENSES $671,942 $715,126 $729,710 $744,270 $756,275

NOI $778,246 $901,235 $1,125,261 $1,250,286 $1,327,510Replacement Reserves (41,400) (41,400) (41,400) (41,400) (41,400)

Cash Flow $736,846 $859,835 $1,083,861 $1,208,886 $1,286,110Debt Service Interest ($286,200) ($286,200) ($286,200) ($286,200)

Net Cash Flow $736,846 $573,635 $797,661 $922,686 $999,910Preferred Distribution-$4,500,000 at 8% ($360,000) ($360,000) ($360,000) ($360,000)Excess Cash Flow/Working Capital $213,635 $437,661 $562,686 $639,910Acquisition Cap Rate 5.97% 6.37% 8.03% 8.95% 9.53%VALUATION AT 5.25% CAP $14,035,171 $16,377,804 $20,644,962 $23,026,392 $24,497,331

Investment Analysis


Purchase Price $12,350,000Closing Costs $150,000Capital Upgrades $1,000,000Total Cost $13,500,000Working Capital Reserve $0First Mortgage -$9,000,000Owners' Equity $4,500,000

138 UnitsYR 1 YR 2 YR 3 Yr 4

Market Rent 1,349,544 1,349,544 1,349,544 1,349,544Gross Potential Rent $1,349,544 $1,349,544 $1,349,544 $1,349,544 Recovery of Old Loss To Lease $72,204 $102,713 $102,713 $102,713 Washer Dryer Premiums $10,560 $33,360 $38,400 $38,400 Upgrade Income $51,480 $163,800 $215,280 $215,280 Organic Rent Growth $58,008 $124,982 $201,860 $284,717

Vacancy, Concessions, Loss To Lease, Bad Debt, Model (125,655) (125,655) (125,655) (125,655)TOTAL RENTAL INCOME $1,416,141 $1,648,744 $1,782,142 $1,864,999

Other Income 200,220 206,227 212,413 218,786TOTAL OTHER INCOME $200,220 $206,227 $212,413 218,786TOTAL INCOME $1,616,361 $1,854,971 $1,994,555 $2,083,785EXPENSES

Salaries & Related 180,000 183,600 187,272 191,017Maintenance 52,692 56,907 60,891 62,109Advertising & Administrative 84,252 85,937 87,656 89,409Management- 5% (Includes 2% Asset Management Fee) 80,818 82,434 84,083 85,765Utlities 119,628 122,021 124,461 126,950Insurance 53,736 54,811 55,907 57,025Taxes 144,000 144,000 144,000 144,000

TOTAL EXPENSES $715,126 $729,710 $744,270 $756,275

NOI $901,235 $1,125,261 $1,250,286 $1,327,510Debt Service Interest 3.18% (286,200) (286,200) (286,200) (286,200)Replacement Reserves (41,400) (41,400) (41,400) (41,400)Loan Amortization 0 0 0 0Accounting, Audit and Asset Management (4,500) (4,500) (4,500) (4,500)

Net Cash Flow $569,135 $793,161 $918,186 $995,410

Investment Analysis

Riverview Apartments Cash Return Analysis 3 Year HoldSponsor

Contribution Year 1 Year 2 Year 3Cash on Cash

ReturnEquity Contribution at Acquisition -$4,500,000Distributions $569,135 $793,161 $918,186Sale After Yr 3

Sale Proceeds - Cap Rate 5.25% $23,026,392Cost of Sale (Percent) 0.50% $115,132Repayment of Debt -$9,000,000 % Ownership Share

Project Cash on Cash Return - Sale -$4,500,000 $569,135 $793,161 $15,059,709 264.93%

Riverview Apartments Cash Return Analysis 4 Year HoldSponsor

Contribution Year 1 Year 2 Year 3 Year 4Cash on Cash

ReturnEquity Contribution at Acquisition -$4,500,000Distributions $569,135 $793,161 $918,186 $995,410Sale After Yr 4

Sale Proceeds 5.25% $24,497,331Cost of Sale (Percent) 0.50% $122,487Repayment of Debt (9,000,000) % Ownership Share

Project Cash on Cash Return - Sale -$4,500,000 $569,135 $793,161 $918,186 $16,615,228 319.90%

$130 Upgrade Premiums @ 6/Month* $780 Year 1 Year 2 Year 3 Year 4

January 0 9,360 17,940 17,940February 780 10,140 17,940 17,940March 1,560 10,920 17,940 17,940April 2,340 11,700 17,940 17,940May 3,120 12,480 17,940 17,940June 3,900 13,260 17,940 17,940July 4,680 14,040 17,940 17,940August 5,460 14,820 17,940 17,940September 6,240 15,600 17,940 17,940October 7,020 16,380 17,940 17,940November 7,800 17,160 17,940 17,940December 8,580 17,940 17,940 17,940Yearly Totals 51,480 163,800 215,280 215,280

Aggregate Units 66 138 138 138

138 units @ 130 $130

Washer/Dryer Premiums @ 4/Month* $160 Year 1 Year 2 Year 3 Year 4

$160 $180 $200 $200January 0 1,940 3,200 3,200February 160 2,120 3,200 3,200March 320 2,300 3,200 3,200April 480 2,480 3,200 3,200May 640 2,660 3,200 3,200June 800 2,840 3,200 3,200July 960 3,020 3,200 3,200August 1,120 3,200 3,200 3,200September 1,280 3,200 3,200 3,200October 1,440 3,200 3,200 3,200November 1,600 3,200 3,200 3,200December 1,760 3,200 3,200 3,200Yearly Totals 10,560 33,360 38,400 38,400

Aggregate Units 44 76 76 76

76 units @ $40 yr1, $45 yr2(The rest currently have).

Organic Rent Growth Year 1 Year 2 Year 3 Year 44.0% 4.0% 4.0% 4.0%

Yearly Totals 58,008 66,975 76,878 82,857


RIVERVIEW APARTMENTS138 UNITS | CANTON, METRO ATLANTA, GACANTON’S PREMIERE CLASS A ASSETUNLIMITED VALUE-ADD UPSIDE

OCTOBER 2016 | Collins Group LLC

riverview apartments · riverview’s units feature expansive layouts in multiple condo-like...

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