|Current Ann. Return||8.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||8.0%|
|Accrued Ann. Return||+ 8.0%|
|Gross Ann. Return*||16.0%|
|Term Remaining||0 of 24 mo.|
|Security Type||Mezzanine Debt|
James Neu of Neu Projects, LLC (the "Sponsor") is seeking financing for the acquisition and minor renovation of 406 Rogers Avenue, Brooklyn, NY 11225 (the "Property"). The sponsor is raising $450k of unsecured mezzanine debt with a projected annual interest of 16% over the course of the investment. The sponsor will hold $30k in interest reserve and pay an annual current interest of 8% on a quarterly basis. The remaining 8% annual interest will be accrued and paid out at the maturity date.
A special purpose entity fully controlled by the Sponsor, Rogers 406, LLC, entered into a purchase contract with the seller, HOH Holdings, Inc on April 22, 2014. HOH Holdings, Inc. had owned and operated the building for over 30 years. The Property is currently vacant except for a family member who is serving as the caretaker for the building until the acquisition is complete. The Sponsor expects to close in late June; the property will be delivered vacant at the time of closing.
The Sponsor is a well-regarded and creditworthy individual with extensive experience in the real estate acquisition, development, construction and management.
The Property is located on a corner lot at the intersection of Rogers Avenue and Sterling Street in the Prospect Lefferts Gardens neighborhood of Brooklyn. The Property is in close proximately to multiple sub-way lines, the Lefferts Manor Historic District, Prospect Park, and Brooklyn Botanic Garden among other amenity rich areas.
The Property is three stories above grade plus a finished cellar. The total gross square feet (SF) of the property is 4,880 with 3,800 above grade. The 2nd and 3rd floors are currently configured as apartments and with some minor work each will be a legal 3 bedroom apartment. The corner lot and abundant windows provide excellent air and light; each of the two units will also have a dedicated roof deck space located on the ground floor setback. The ground floor and cellar is currently a commercial space and will remain as such with some minor renovation work to attract a new tenant to serve the gentrifying neighborhood.
The planned renovation work is minor but it will be completed by a licensed contractor and required permits will be obtained from the City of New York. The acquisition pricing is $1.2M ($246/GSF); expected closing costs, construction, design, filing, carry costs and interest reserve total $296K making the total project cost $1.5M ($307/GSF).
It is expected that the residential units will be completed and on the market in September with the commercial unit being completed and ready for occupants in October. Marketing of the commercial unit will commence in early June, prior to closing. Given the market conditions it is expected that leases will be in place within a month of listing for the residential units and within 3 months for the commercial though the financial projections contained with this memorandum are much more conservative. Once occupied, the senior debt from Country Bank will refinanced and proceeds will be used to pay back the Fundrise investors.
|Gross Annual Return*||16.0%|
|Capital Senior to Fundrise||60-69%||3|
|Capital Junior to Fundrise||10-19%||4|
|Sponsor’s Track Record||Less than $50 million||3|
The information contained in the Fundrise Rating is for informational purposes only. It is impersonal and not individualized for any specific investor's financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. You should always carefully consider investments in any security and be comfortable with your understanding of the investment. You may also consider consulting investment professionals.
|Type||Source||% of Total||Amount|
|Mezzanine Debt||Fundrise Offering||30.0%||$450,000|
The building is in general good condition which allows for a
limited renovation and a timely turnaround. The corner lot allows for
maximum commercial exposure as well as true 3 bedroom apartments on the
2nd and 3rd floors with excellent natural light.
|Address||406 Rogers Ave|
|City & State||Brooklyn, NY|
|Neighborhood||Prospect Lefferts Gardens|
|Product Type||Mixed-Use / Commercial, Residential|
|Project Phase||Value-Add / Renovation|
This is the Sponsor’s second project in the Prospect Lefferts Gardens (PLG) neighborhood of Brooklyn. PLG is recognized as an emerging neighborhood with a strong rental market. The Property is in close proximately to multiple sub-way lines, the Lefferts Manor Historic District, Prospect Park, and Brooklyn Botanic Garden among other amenity rich areas.
Neu Projects, lead by principal James Neu, focuses on small development projects in emerging markets in Brooklyn. He maintains a strong desire to apply his experience, skill and motivation in order to successfully execute projects of which he is proud and which provide a financial upside.View full profile