- Low land costs (project $35per BSF – vs $500+ in Manhattan)
- Low construction costs (projected to be $240 psf vs $450+ psf in Manhattan)
- Low total project costs (projected to be $395 psf vs $1000+ psf in Manhattan)
- High rent per square foot (projected to be $64 psf comparable to Manhattan)
- High cash yield (projected to be 7.5%)
- High investor returns (projected to be 16%+ IRR)
Key Pro-Forma Investment Figures
- 92.5′ x 100′ site
- 42,500sf building
- 122 micro-units
- 6 1/2 stories
- $17M project cost ($393/bsf)
- $1.5M land cost ($35/bsf)
- 33% equity / 67% debt
- $1,100-1,250/mo rent, furnished
- $60+psf rents
- $1,203,000 stabilized NOI
- $630,000 stabilized cash flow
- 16% Investor pro-forma IRR*
*the information is set forth with more particularity and detail in the Executive Summary attached to the PPM and is subject to the qualifications and assumptions described therein.
When completed, the project will be a 122 unit, 6 ½ story (7 in front, 6 in rear) building with amenities including café, gym, rooftop deck with grills and showers, bike storage and laundry facilities. The site is located in a rapidly changing and easily accessible market located just outside Manhattan in Jersey City, NJ. The NYC downtown and midtown employment centers are just minutes away on the PATH train and more quickly accessible than many established neighborhoods within Manhattan. Jersey City’s large office market with many financial institution’s back offices is only 7 minutes away. The site itself is a “Walker’s Paradise” scoring a high 95 Walkscore and is in the fastest growing quadrant of the Journal Square Redevelopment Zone by the PATH.
The economics of this investment are quite compelling. Land costs of $35per BSF is a small fraction of the $500+ per BSF in Manhattan and other emerging sub-markets nearby like Williamsburg in Brooklyn and Long Island City in Queens. And due to the type of construction allowed, and lower construction costs in NJ, construction costs are about half of those markets ($240 psf vs $450 psf). Yet projected rents per square foot of $60+psf are comparable to luxury buildings being built in those markets due to the small size of the apartments. With rents starting at $1,130, they become an extremely attractive alternative to meet the needs of millennials and others.
Investors will receive an accrued 8% per annum preferential return (ie paid before profit sharing with the sponsors), then receive 12% of remaining profits, which combined represents a pro-forma 16% IRR or ROI of 53% (ie a $100,000 investment has a pro-forma return of $153,000). These returns, plus a relatively short turnaround time of 3 years for a development project, make this an extremely attractive opportunity for investors.
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Minimum Investment: $100,000.00