|Current Ann. Return||9.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||9.0%|
|Accrued Ann. Return||+ 4.5%|
|Gross Ann. Return*||13.5%|
|Term Remaining||0 of 36 mo.|
|Underlying Security||Preferred Equity|
This is an opportunity to invest in a series of Notes tied to the performance of a 22,500 square foot industrial building located in the East New York neighborhood of Brooklyn, New York. The property consists of 6 adjoining buildings, of which 5 are currently leased. Cayuga Capital Management ("CCM") has been in discussions with brokers in the area and intends to lease-up the remaining vacant space shortly after acquisition. Additionally, CCM plans to spend $250,000 for capital improvements to address deferred maintenance and $100,000 for tenant improvements to attract new tenants to the property.
The Brooklyn market has seen significant growth amongst all asset classes over the last few years. Businesses, manufacturers and industrial tenants who were once tenants in the industrial markets of Williamsburg, Downtown Brooklyn and most recently Bushwick, have been unable to find affordable space as many industrial spaces continue to be converted to retail. CCM intends to capitalize on the marketplace fundamentals pushing tenants to the eastern part of Brooklyn in search of more affordable space.
According to CoStar, industrial rents have been increasing significantly in the outer boroughs. In 2013, rents had increased nearly 25% from an average of $11.50/sf in mid-2011 to $14.25/sf. This trend has continued over the last year with comparable properties in the East New York area renting for between $12/sf to $16/sf. In-place leases at the property are currently below market, averaging $11.68/sf.
Projected Financials Year 1:
Exit Strategy: The sponsor plans to exit the Investment via refinancing in year 3 of the investment.
Interest payments on the notes will be tied to the distribution schedule under the terms of the preferred equity investment, as follows:
The preferred equity investment into CCM’s 723 Van Sinderen project will be $300,000, which represents approximately 11% of the total capital of the project.
The investment will be junior to a senior loan of $1,400,000 and senior to $983,720 of equity.
The sponsor is purchasing the property for $94.30/sf. The replacement cost for a similar building could be upwards of $250/sf.
|Gross Annual Return*||13.5%|
|Capital Senior to Fundrise||50-59%||2|
|Capital Junior to Fundrise||30-39%||2|
|Sponsor’s Track Record||$250 million or more||1|
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|
|Preferred Equity||Fundrise Investment||11.2%||$300,000|
This industrial compound consists of 1 Lot and 6 buildings, which span along Van Sinderen Avenue between New Lots Avenue to Linden Boulevard. The total square footage of the buildings is 22,500 SF, the total size of the lots is 22,500 SF, all of which is zoned with Miscellaneous Gas or Garage usage, a sought after classification in industrial areas.
The property is currently set up as 6 individual units with an average ceiling height of 15 ft. Each unit is leased individually, with current leases in place for 5 of the 6 units.
Transportation is easily accessible from the subject site. The L line abuts the property, with a train stop within 30 ft of the property. New Lots Avenue and Linden Boulevard are both within short walking distance from the site.
|Address||723-747 Van Sinderen Avenue|
|City & State||New York, NY|
|Neighborhood||East New York|
|Product Type||Industrial / Light Industrial|
|Project Phase||Value-Add / Leasing|
The Brooklyn market has seen significant growth amongst all asset classes over the past several years. Businesses, manufacturers and industrial tenants who were once tenants in the industrial markets of Williamsburg, Downtown Brooklyn and most recently Bushwick, have been unable to find affordable space as many industrial spaces continue to be converted to retail. The remaining spaces have thus become increasingly competitive among operators, increasing rents. The property’s location in East New York provides a more affordable option for tenants who have been pushed out due to demand in these gentrified areas.
According to CoStar, industrial rents have been increasing significantly in the outer boroughs. In 2013, rents had increased nearly 25% from an average of $11.50/sf in mid-2011 to $14.25/sf. This trend has continued over the past year with comparable properties in the East New York area renting for between $12/sf to $16/sf. In-place leases at the property are currently priced below these comparable properties, averaging $11.68/sf.
Cayuga Capital Management LLC (“CCM”) is a real estate operating partner, development manager and property manager based in Brooklyn, New York. CCM identifies properties not operated at best and highest potential and invests to maximize returns. This is achieved through repositioning, renovation, or ground up construction.View full profile
|Gross ann. return*||13.5%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||13.2%|