EVolve Towers DENVER, COLORADO
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eVolve Towers D E N V E R , C O LO R A D O Confidential memorandum, not for publication.
UBUNTU PARTNERS LLC
UBUNTU PARTNERS LLC
UBUNTU PARTNERS LLC
UBUNTU PARTNERS LLC
Legal Notice NOTICE REGARDING FORWARD-LOOKING STATEMENTS This Investment Summary contains forward-looking statements and forecasts concerning the Company’s or management’s plans, intentions, strategies, expectations, predictions and financial forecasts concerning the Company’s future activities and results of operations and other future events or conditions. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “could,” “estimate,” “might,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Sections of this Investment Summary containing such statements include but are not limited to the Business Plan and the Financial Statements. The Company’s actual results or activities or actual events or conditions could differ materially from those forecasted by the Company, due to a variety of factors, some of which are beyond the control of the Company. Forecasts concerning the Company’s future results of operations and expansion plans are based on a number of assumptions and estimates made by management of the Company. These estimates and assumptions are believed by management to be reasonable but are uncertain and unpredictable. To the extent that actual events differ materially from management’s assumptions and estimates, actual results will differ from those forecasted. The investment returns outlined on the previous pages of this Investment Deck are in no way guaranteed by Ubuntu Partners, LLC, RRECap, LLC, Arx Capital Partners, Ltd. or any affiliate or representative thereof. NOTICE TO INVESTORS AN INVESTMENT IN THE OFFERED SECURITIES INVOLVES A HIGH DEGREE OF RISK. THE OFFERED SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAW. NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS SUMMARY MEMORANDUM OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. SECURITIES PURCHASED IN THIS OFFERING WILL BE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AS SET FORTH IN THE OPERATING AGREEMENT OF THE COMPANY. NOTICE TO COLORADO INVESTORS THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE COLORADO SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM. UBUNTU PARTNERS LLC
Opportunity and Project Overview Investment Thesis The sponsors Ubuntu Partners (“U/P”) will develop Evolve Towers, a 331-unit two tower high rise multifamily development, on 28,250 SF of land they own in downtown Denver. Their investment thesis includes: Deliver Studio, 1 & 2 BR units that fill the demand for these unit sizes and location in the highly sought out area of the Arapahoe Square District in downtown Denver. Create a cutting-edge design that is both unique to and reflective of the Denver market Diversify the project revenue stream through the leasing of residential units, retail and offices,as well as parking income and amenity club memberships that speak to a livable and walkable urban downtown. UBUNTU PARTNERS LLC
Project Summary Please visit this Dropbox link for a video showcasing the development. • 398,952 SF mixed-use two tower multi-family residential development in the Arapahoe Square District. • Each 23-story tower includes 19 stories of residential units over a 5-story podium with retail and a 258-space underground parking garage. • 331 multifamily units within 290,051 SF of total residential space. Private club/amenity, indoor/outdoor space on 6th floor comprises over 10,000 SF and ground level retail/office comprise over 19,000 SF. UBUNTU PARTNERS LLC
❑ Section 1: The Vision
❑ Section 2: Property Overview
❑ Section 3: Entitlement Status
❑ Section 4: Financials
❑ Section 5: Key Partners
❑ Section 6: Sponsor
❑ Section 7: Appendix/Comparables
UBUNTU PARTNERS LLC
Section 1: The Vision
Evolve Towers was designed to address some issues that currently plague growing tier three cities such as Denver.
The issues are as follows:
1) Cities are pushing for density, especially high rise living
2) Type 1 construction costs continue to escalate
3) Professionals attracted to those cities and work downtown cannot afford to live downtown
4) Apartment construction in those cities has been boiler plate design, focused on maximizing footprint but with no regard to
design or neighborhood quality and are therefore indistinguishable from one another
Ubuntu Partners (“U/P”) was committed to finding a solution that addressed the above concerns yet produced a project that
would attract tenants who worked downtown and were looking for an alternative to the “ugly box” apartment building and also
delivered a design centric project to the city which would provide for an architectural legacy. By being intimately familiar with all
the different downtown neighborhoods, U/P realized about three years ago that the Arapahoe Square neighborhood was prime for
development yet had not been “discovered”. Based on its proximity to the CBD and surrounded by 6 of the hottest neighborhoods
in Denver it had been the “ugly” stepchild of the city, consisting mostly of parking lots. In addition, it was recently re-zoned with a
high-rise incentive that allowed for point towers, which, however, most developers were at the time not aware of. It was for that
reason that U/P was able to acquire the two adjoining lots for an almost 30% discount. Continued…..
UBUNTU PARTNERS LLCThe Vision Continued..
To address the need to be able to create units that future tenants could afford, U/P hired a European Design architect,
Sanzpont, who was very familiar with designing compact but stylish spaces and also had won numerous International
Sustainability awards. The units were to be between 450 and 800 sf and range from studios to 2/2s. Based on the
smaller square footages, these units could be price in the “attainable” price range and easily compete with the “luxury”
apartments that are proliferating the downtown area.
The solution to ever increasing Type 1 construction costs was U/Ps decision to partner with TGE and their leading edge
“Top Down℠ Construction” technique; basically a modular approach to building high rises. This would not only allow the
project to be built for a much lower cost, but also reduces the construction time by almost 30%. The fact that this
method also uses a lot less materials and so is inherently sustainable was an additional draw to U/P.
By putting together such a uniquely qualified team and using the modular Top Down℠ method, U/P has paved the way
to easily replicate the Evolve Towers in other tier three cities such as Austin and Nashville, cities very similar to Denver
in their growth pattern and demographic.
UBUNTU PARTNERS LLCDesign Neo Design Approach: A cutting-edge exterior design which will be unique, modern and will stand out amongst other standard, more traditional projects in the area. Unit interiors will embody a European design philosophy with smartly designed, highly efficient living spaces. Urban Club/Amenity: A 14,000+ SF “urban club” space will house many of the building’s amenities. The purpose of the space will be for eating, drinking, meeting and socializing with clients, friends and residents. Residents will automatically have access to this coveted space, and it will be open to the public with a membership. 1st Floor Retail/Office: Over 10,000 SF of the 1st floor will be reserved for retail/office space. Desired tenants include a local bodega to serve the residences and adjacent community or other similar local authentic restaurants, retailers and artisans to provide for a unique micro-community within the heart of the historic Arapahoe square neighborhood. UBUNTU PARTNERS LLC
Construction
TGE, LLC (TGE) a building group specialized in systems
integration focused on a revolutionary building process
for the construction industry. Their vision is to
transform design and construction practices for faster
delivery, cost effectiveness, and a more sustainable
built environment. The TGE Top Down℠ building
process brings a new approach to building, with both
with Lean practices and a structural solution to the
traditional building model.
Benefits include:
• Substantial Cost and Time Savings
Click here for website and videos
• Elimination of Tower Cranes
• Reduced Structure Weight
• Column free interiors and exteriors
• Increased safety performance
• US supply chain
UBUNTU PARTNERS LLCSection 2: Property Overview Location: Arapahoe Square In 2007, the City of Denver recognized a roughly 40-square-block neighborhood in the central area of downtown that had been historically underutilized. Nestled between the Commercial Core, Lower Downtown (LoDo), the Ballpark marketplace, Curtis Park, and the River North (RiNo) district, Arapahoe Square was given a name and a future. To promote growth in this pocket, in 2016 the City of Denver created development incentives to allow for build heights of up to 250ft and 400ft (12+ and 20+ zones) along with the removal of maximum FAR. UBUNTU PARTNERS LLC
Vicinity Map
❑ Located between 6 of Denver’s
hottest neighborhoods
❑ Walking distance to Coors Field
and Downtown Walking Mall
❑ One block from 5280 Loop
❑ Three blocks from light rail
UBUNTU PARTNERS LLCLocation Maps The property is located on a prime corner in Arapahoe Square. The west facing site guarantees mountain views from the units starting at the fifth floor. Champa is one of the major arteries into the CBD and is a one-way street towards downtown. UBUNTU PARTNERS LLC
Location and
Transit
The Downtown Denver Partnership is
leading efforts to create The 5280
Trail, a bold, visionary project that will
transform how the public right-of-way
is used in Downtown Denver. The
5280 will link neighborhoods and
connect people by reimagining
underutilized streets into the essential
Downtown experience uniting urban life
with Colorado’s outdoor culture.
UBUNTU PARTNERS LLCSection 3: Entitlement Status ❑ Received Concept Approval in October 2019. ❑ Received Site Design and Massing Approval from the Design Advisory Board in February 2020 for 331 units and two 250ft towers. ❑ Received final Design Advisory Board approval October 27, 2020. ❑ Submitted the Site Development Plan (SDP) on August 27, 2020. Expect City approval by December 7, 2020. ❑ Upon receipt of SDP Approval, the next steps will be (i) Construction Document submittal and (ii) pulling the building permit to begin construction. ❑ Link to full entitlement package: click here UBUNTU PARTNERS LLC
Site Plan and Building Elevations UBUNTU PARTNERS LLC
Conceptual Drawings
Connector between Towers
Amenity Deck on 6th floor
Bird’s eye view of west side
UBUNTU PARTNERS LLCSection 5: Financials Sources and Uses UBUNTU PARTNERS LLC
Financials cont’d Exit Assumptions UBUNTU PARTNERS LLC
Line Item Value Cost per Unit %
Land $9,000,000 $27,190
TOTAL LAND $9,000,000 $27,190
HARD COSTS
Contractor Hard Costs $77,194,544 $233,216
Financials
Material Tax $366,778 $1,108
Home Office Overheard $3,102,453 $9,373 4.00%
Contractor Profit $2,419,913 $7,311 3.00%
Bond and Contractor Insurance $997,004 $3,012 1.20%
Builder's Risk Insurance (Owner Covered) $540,362 $1,633 0.70%
Cont’d
IPD Cost Savings ($5,403,618) ($16,325) 7.00%
GC's Hard Cost Contingency $1,661,674 $5,020 2.15%
Developer's Hard Cost Contingency $2,315,836 $6,996 3.00%
Retainage $1,809,904
TOTAL HARD COSTS $83,194,947 $251,344
SOFT COSTS
Marketing $0 $0 0.00%
Architect, Engineer / Other Design Consultants
Architect $1,929,864 $5,830 2.50%
Construction Budget Engineering Design
Architectural Reimbursable Expenses
$1,929,864
$135,090
$5,830
$408
2.50%
3.50%
Commissioning Agent $75,000 $227
Environmental Engineer $5,000 $15
Waterproofing Consultant (SBSA) $50,000 $151
Wind Study Consultant $25,000 $76
ALTA Survey $10,000 $30
Project Development Fees $3,757,161 $11,351 3.50%
Impact Fees, Sewer/Water Svc & Permits $1,692,421 $5,113 2.00%
Loan Transaction Fees $104,664 $316 0.15%
Construction Loan Fees $1,569,957 $4,743 2.25%
CPACE / MEZZ Loan Transaction Fees $154,389 $466 2.00%
Equity Placement Fee $597,043 $1,804 2.00%
Tenant Improvement Allowance $0 $0 $0.00
Rooftop bar Improvements $50,000 $151 $50.00
Soils Report $10,000 $30
Ongoing Materials Testing $225,000 $680
Taxes During Construction $83,182 $251
Owner FF&E $125,000 $378
Legal Fees $100,000 $302
Consulting Payroll / Fees $200,000 $604
Lease Up and Op Ex Reserve $503,911 $1,522 6.00%
Soft Cost Contingency $399,976 $1,208 3.00%
TOTAL SOFT COSTS $13,732,522 $41,488
Interest Reserve (Construction Loan) $1,420,000 $4,290
Interest Reserve (Municipality Incentive) $0 $0
TOTAL INTEREST RESERVE $1,420,000 $4,290
TOTAL BUDGET $107,347,469 $324,313
UBUNTU PARTNERS LLCInitial Year 1 Year 2 Year 3 Year 4 Year 5
Gross Potential Revenue (GPR) $8,398,515 $8,650,471 $8,909,985 $9,177,284 $9,452,603
(Vacancy/Collection Loss) ($4,199,258) ($692,038) ($712,799) ($734,183) ($756,208)
(Concessions) ($839,852) ($86,505) ($89,100) ($91,773) ($94,526)
Non-Rent Revenue from Tenants $478,250 $492,598 $507,375 $522,597 $538,275
Parking Income $619,200 $637,776 $656,909 $676,617 $696,915
Retail Income $222,516 $229,191 $236,067 $243,149 $250,444
Office Income $149,580 $154,067 $158,689 $163,450 $168,354
Financials
6th Floor Revenue $150,000 $154,500 $159,135 $163,909 $168,826
(Vacancy) ($75,000) ($83,407) ($85,909) ($88,486) ($91,141)
1G WifI Connection Annual Revenue $137,520 $141,646 $145,895 $150,272 $154,780
Effective Gross Income (EGI) $5,041,472 $9,598,300 $9,886,249 $10,182,836 $10,488,321
Cont’d
EGI per RSF $24.34 $46.34 $47.73 $49.16 $50.63
EGI per Unit $15,231 $28,998 $29,868 $30,764 $31,687
Operating Expenses (OE)
Payroll $562,700 $579,581 $596,968 $614,877 $633,324
MGMT Fee $151,244 $287,949 $296,587 $305,485 $314,650
Admin. Expenses $50,415 $95,983 $98,862 $101,828 $104,883
1G Wifi Cost Annually $158,880 $158,880 $158,880 $158,880 $163,646
Marketing $50,415 $95,983 $98,862 $101,828 $104,883
Maintenance $50,415 $95,983 $98,862 $101,828 $104,883
Pro Forma Utilities
Insurance
$157,500
$182,050
$162,225
$187,512
$167,092
$193,137
$172,105
$198,931
$177,268
$204,899
Property Taxes $563,400 $563,400 $563,400 $563,400 $563,400
Operating Expenses $1,927,018 $2,227,495 $2,272,652 $2,319,163 $2,371,836
Operating Expenses per RSF $9.30 $10.75 $10.97 $11.20 $11.45
Operating Expenses per Unit $5,822 $6,730 $6,866 $7,007 $7,166
Net Operating Income $3,114,454 $7,370,804 $7,613,597 $7,863,673 $8,116,485
NOI per RSF $15.04 $35.58 $36.76 $37.96 $39.18
Net Operating Income per Unit $9,409 $22,268 $23,002 $23,757 $24,521
Net Operating Income Margin 61.8% 76.8% 77.0% 77.2% 77.4%
Capital Reserves ($410,446) ($410,446) ($410,446) ($410,446) ($410,446)
Debt Service - Construction Loan ($2,311,829) ($4,623,658) ($4,623,658) ($4,623,658) ($4,623,658)
Debt Service - CPACE Loan ($277,692) ($555,384) ($555,384) ($555,384) ($555,384)
Equity Investment ($29,852,160) $0 $0 $0 $0 $0
Property Sale $0 $0 $0 $162,329,702 $0
Property Sales Cost $0 $0 $0 ($4,058,243) $0
Debt Repayment - Construction Loan $0 $0 $0 ($66,662,635) $0
Debt Repayment - CPACE Loan $0 $0 $0 ($7,417,166) $0
Cash Flow After Debt Service ($29,852,160) $114,486 $1,781,316 $2,024,108 $86,465,843 $0
Cash Flow Margin 2.3% 18.6% 20.5% 849.1% 0.0%
IRR 32.7%
Equity Multiple 3.03x
Yield on Total Equity 0.38% 5.97% 6.78% 289.65% 0.00%
Yield on Total Project Cost 0.11% 1.66% 1.89% 80.55% 0.00%
UBUNTU PARTNERS LLCSection 5: Key Partners UBUNTU PARTNERS LLC
Oz Architecture With roots dating to 1964, OZ is named for two founders Tom Obermeier and Alan Zeigel, who believed that collaboration sparks creativity. Today, we are comprised of 170 architects, interior designers, brand strategists, and support staff. The firm works in multiple practice areas that include cultural projects, such as libraries and museums, municipal and education facilities, urban living, workplace and hospitality projects. We have a large interior design group that works across practice areas and has extensive experience as well. Our diversity of expertise in multiple project types allows us to harness broad perspectives and share knowledge across our practice areas to drive innovative and sustainable design solutions. We value a pioneering spirit, an attitude of openness, collaboration, stewardship of our communities, and the continuum of our practice which is now more than half-a-century old. From our studio in the vibrant RiNo Arts District of Denver, we work across the nation and continents from Africa to Antarctica. www.ozarch.com UBUNTU PARTNERS LLC
Sanzpont Arquitectura Sanzpont is an award-winning international architecture firm with offices in Barcelona, Mexico and Chicago. Our main interest is creativity, design and the constant search for innovation. We strive to create connections between people and spaces, always prioritizing sustainability and the environmental environment. Having offices in three countries, Spain, Mexico and the United States, has allowed us to create an important network of professionals and companies that work with us to ensure the successful completion of our designs around the world. www.sanzpont.com UBUNTU PARTNERS LLC
Arx Capital Partners Josh Richards, Founder Mr. Richards began his 19+ year career as an analyst for GMAC Commercial Mortgage. His vast experience includes all asset classes, which include the basic four, in addition, to all Healthcare related projects, self storage, Hospitality, and Credit Tenant Data Centers Developments. Mr. Richards is the Founder and CEO of Arx Capital Partners (aka Arx Cap) and has successfully closed over $2 Billion of combined equity & debt capital over his career. Mr. Richards previously served as the Director of Debt for a large Commercial Real Estate Development and Management Company in Denver for over 3 ½ years. He managed over $400MM+ of debt for the firm, that required him to monitor all loan maturities, all refinance processes, in addition to sourcing new debt for current and all future acquisitions and ground up development projects. Mr. Richards was successful in closing 100% of the loans placed under his management during his tenure there, which equated to approximately $355,000,000+, spread over 20+ loans. Mr. Richards also provides clients access to LP or Preferred Equity Capital. This offers clients a “one stop” shop for all their capital needs, which ranges from $2MM to $2BB in overall capital stack scenarios. Currently Mr. Richards has been engaged to raise over $300MM in total capital for his various clients in 2020. Mr. Richards was the former Vice President with Berkadia Commercial Mortgage in Orlando, FL, bringing with him a wealth of Institutional Capital Markets experience in commercial real estate. He strong relationships with institutional capital and equity sources, which he maintains regularly. This includes Life Insurance Companies, Capital Market firms, Private Debt Funds, and highly respected Family Offices. Mr. Richards joined Berkadia Commercial Mortgage in September of 2011 as part of the Tavernier Capital Partners Florida Operations Acquisition, and worked out of the Orlando office since he started his career in 2002 with GMAC Commercial Mortgage/Capmark Finance. Mr. Richards has been instrumental in closing over $1.3 Billion dollars of equity & debt transactions during his tenure with these respective companies. Prior to joining Berkadia, he was the Vice President at Tavernier Capital Partner. Prior to that, he was a Senior Analyst/Junior Producer for GMACCM. Mr. Richards is an active member of ICSC, NAIOP, ULI and MBA. UBUNTU PARTNERS LLC
Fingerprint Strategic Marketing Partner Fingerprint Strategies Inc. evolved from Maverick Project Sales & Marketing Corporation in the United States and also from Maverick Real Estate Corporation in Canada. Maverick was founded in 1992 as Vigers Realty to build a channel for North American real estate and business into Asia. The organization had many successful years of selling multi-unit projects into the Hong Kong Market both for ourselves and for clients. We expanded into project marketing and sales for third party real estate developers in Asia, the USA and Canada. In 2000 we renamed the company Maverick. It grew to having 6 offices across North America, and evolved further into Fingerprint Strategies in 2009, as we refined our unique approach to selling real projects . The organization has had a successful history with over 100 projects amassing sales in excess of $6 billion. Fingerprint has built a reputation as a creative and innovative company that takes its work seriously, provides excellent advice and tells it like it is. www.fingerprintre.com UBUNTU PARTNERS LLC
TGE Top Down℠ Construction TGE, LLC (TGE) a building group specialized in systems integration focused on a revolutionary building process for the construction industry. Our vision is to transform design and construction practices for faster delivery, cost effectiveness, and a more sustainable built environment. The TGE Top Down℠ building process brings a new approach to building, with both with Lean practices and a structural solution to the traditional building model. The TGE Top Down℠ technology platform and building approach has proven to be a critical competitive edge for forward thinking developers and design teams looking for distinct and measurable differentiation from their competition. www.tgetopdown.com UBUNTU PARTNERS LLC
TGE Top Down℠ Partners UBUNTU PARTNERS LLC
TGE Partner Firms cont’d UBUNTU PARTNERS LLC
Section 6: Sponsor Ubuntu Partners LLC, the developer of record, was formed in 2018 by Patricia Watson and Karina Christensen with the express intent on bringing high density, attainable housing to the Denver urban core. Their philosophy is based on the South African concept of “Ubuntu” which translates to “I am therefore we are” or “community”. The founders are dedicated to creating projects through cooperation that will add value to its investors, the community and the people occupying those buildings. UBUNTU PARTNERS LLC
Co-Founder
As Co-Founder of the Company, Patricia is involved in all areas of the Company,
with special responsibility for analyzing all legal aspects of the company's
operations including all contracts, investor offering memorandums and
agreements, construction oversight and management and risk mitigation.
Patricia’s relevant experience includes having been the Co-Founder of a mid-size
commercial real estate investment sponsor in Denver. During her tenure Patricia
acted as lead property manager and construction manager for more than a
million square feet of Colorado based commercial real estate properties. In
addition, she acted as General Counsel for several years, further assisting the
company in successfully repositioning hundreds of millions of dollars worth of
commercial real estate investment properties.
Patricia has also owned and operated an independent real estate transactional
law firm for the past eight years, which was tasked with negotiating and drafting
leases for investment ownership entities, including major leases for tenants such
as Air Methods, ADT, CircleK, Waste Management, HomeAdvisors, The
Department of Disability Services for Colorado, Innovation Pavillion, Medical
Simulation, Edward Jones, and dozens of others.
Patricia Watson Finally, with an earlier career as an attorney assisting with construction defect
defense litigation, she is committed to and knowledgeable about managing
construction related risks for our investment partners.
UBUNTU PARTNERS LLCCo-Founder
As Co-founder of the company Karina is responsible for the day-to
operation of the company, finding and assessing new
opportunities, managing investor relationships and exploring
strategic partnerships.
With over 25 years experience in real estate, from franchise
ownership in several Keller Williams offices, to successfully
developing condo projects as the managing partner, Karina has a
proven track record in assembling successful teams to take
advantage of unique market opportunities. Before entering the
real estate arena she was a consultant in the private jet industry
where she managed complex and capital-intensive aircraft
completions on behalf of her clients.
Karina is a graduate of the Urban Land Institute’s REDI (Real Estate
Diversity Initiative) program, which promotes diversity in real
estate development in Colorado.
Karina Christensen She graduated with a Baccalaureate degree in Business
Management from the United World College in Singapore and
attended the prestigious Parsons School of Design in New York.
UBUNTU PARTNERS LLCSection 7: Appendix/Comparables UBUNTU PARTNERS LLC
1000 Speer
UBUNTU PARTNERS LLCSteele Creek
UBUNTU PARTNERS LLCSteele Creek
UBUNTU PARTNERS LLCEviva on Cherokeee
UBUNTU PARTNERS LLCEviva on Cherokee
UBUNTU PARTNERS LLCEviva on Cherokee
UBUNTU PARTNERS LLCUBUNTU PARTNERS LLC
UBUNTU PARTNERS LLC
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