Property Details
Stabilized Occupancy  Stabilized Income  Stabilized Cashflow  Below Market Rent  NOI Growth 
Asset Profile
Multiple

Ashton Condominiums

Arlington Heights, IL

Multi-Family Property
Randolph Street Realty Capital, LLC Chicago, IL
Randolph Street Realty Capital, LLC
  • IRR 14.8-18.1%
  • Equity Multiple 1.86-2.24x
  • Hold Period 4-7Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash 7%
  • Stabilized Cash on Cash 8.1% in Y2
  • First Distribution Jun 2021
  • Distribution Frequency Quarterly
  • Co-Investment 8.4% ($750K)
  • Preferred Return 9%
  • Investor Profit Share See Financials
  • Asset Profile Multiple
  • Loan-to-Value 70%
  • Current Occupancy 94%

About this Property

"Acquisition of 217 condominium units and controlling interest in 240-unit complex in suburban Chicago which permits Sponsor to gain control of the remaining 23 units, deconvert and add value through multiple strategies."

-Jonathan Saliterman, Randolph Street Realty Capital, LLC

Address 2302-2416 S Goebbert Rd
Square Footage 173,962 sq. ft.
# of Units 217
Year Built 1989
Year Renovated 2015-19
Current Occupancy 94%
Market Occupancy 95%
Current Average Rents $1.49 psf
Average Market Rents $1.61 psf
Purchase Price $29,468,750
Price/Sq. Ft. $169 psf

Top Questions

All answers are provided by the sponsor, Randolph Street Realty Capital, LLC, or its representatives.

 

Why are you buying this property?

Jack von Albade, Randolph Street Realty Capital, LLC: "RSRC owns a controlling interest in this suburban Arlington Heights, Illinois condominium project built in 1989 and is executing its de-conversion plan to acquire the remaining units and operate the property as an integrated rental apartment community which will significantly increase the value of the asset. RSRC acquired 185 units in a bulk purchase in December, 2020 and currently controls all of the HOA Board Seats. RSRC is under contract to acquire 32 additional units from a single owner with a closing date scheduled at the end of May, 2021. RSRC owns above the statutory threshold of units required to purchase or cause the sale of all remaining units by right, without need of any consent. After the acquisition of the 32 units under contract, RSRC will own 217 units (90%) and will continue to pursue acquisition of the remaining 23 units through negotiated sales and believes it will be able to acquire all of them without resorting to the forced sale provisions of the condominium statute."

 

What is Round 2?

Jack von Albade, Randolph Street Realty Capital, LLC: "Round 2 is the planned follow-on capital offering for the second bulk acquisition of condominium units. Sponsor acquired 185 of the 240 condo units in December, 2020 and is raising additional equity to acquire the remaining 55 units, at least 32 of which are under contract and will close in May, 2021. Round 2 invested dollars will be treated on the same economic basis as the dollars invested in the first round offering, with returns equitably adjusted based on the respective dates of the investment."

 

What are the most important aspects of this investment opportunity for the investors?

Jack von Albade, Randolph Street Realty Capital, LLC:

  • "Acquire additional 32 condominium units totaling 217 of the total 240 units at the complex"
  • "Build to stabilized cap rate of 6.6% cap versus low 5% cap rates for 80s vintage value-add projects in current environment"
  • "Projected 1.85x – 2.4x LP cash multiple between 4 and 7-year hold"
  • "Finance with loan from TCF at Libor + 300 bps. interest rate; lender is providing a facility to buy back units at 70% of acquisition price"
  • "Opportunities to improve rental revenue and cut expenses"
  • “Commence resident utility reimbursement program which is already underway to the tune of $40-$60/month per unit”
  • “Renovate clubhouse gym and outdoor amenities; HOA funds to be used for common area rehab"
  • "Install in-unit washers/dryers and increase rents to the 1-bedroom units"
  • "De-convert condo regime either through buy-backs or forced sale through the IL Condo Act 75% rule"
  • "De-conversion will add value by expanding buyer pool to conventional multi-family operators and lower the exit cap rate"

 

What is your investment strategy/business plan?

Jack von Albade, Randolph Street Realty Capital, LLC: "Sponsor will close on the acquisition of the additional 32 units in May, 2021 and will then own 217 rental units. It will direct the HOA to renovate the clubhouse and improve the fitness room as well as invest up to $1,050,000 in interior renovations to the units primarily focusing on adding in-unit washers and dryers. Adding in-unit washer dryers will allow Sponsor to increase revenue throughout the hold and support strong cash annual yield throughout the investment. The average projected annual cash yield for a four-year and seven-year hold is 7.5% and 10.3% (including refi proceeds) respectively. Sponsor will also move to acquire as many of the remaining 23 units as possible at pricing which is accretive to projected cash yield, or alternatively, force de-conversion of the condominium as permitted by statute and sell the property. By abrogating the condominium declaration (that is, de-converting), the asset will attract a larger pool of potential buyers as a Value-Add multifamily property with consolidated ownership."

 

How has COVID-19 impacted your business plan?

Jack von Albade, Randolph Street Realty Capital, LLC: "Despite in-place rents being 6.1% below market levels, RSRC has underwritten a more modest 2% rent growth through years 1 & 2 of the investment to account for the impact of COVID-19 limiting rent growth. RSRC is focused on adding washers and dryers as value-add strategy during years 1-2 rather than cosmetic upgrades as RSRC believes that will be a stronger value-add strategy during the COVID (and hopefully post-COVID) environment."

 

What are the risks and how are you mitigating those risks?

Jack von Albade, Randolph Street Realty Capital, LLC: "The extension of eviction moratoria related to COVID-19 may impact revenues. RSRC will stay up to speed on programs to help residents pay rent. Pushing a value-add strategy may be impacted if a prolonged economic recession occurs resulting from COIVD, but risk is mitigated by good in place income for the property."

NOTE: All answers provided by the sponsor, Randolph Street Realty Capital, LLC, or its representatives.

About this Property

"Acquisition of 217 condominium units and controlling interest in 240-unit complex in suburban Chicago which permits Sponsor to gain control of the remaining 23 units, deconvert and add value through multiple strategies."

-Jonathan Saliterman, Randolph Street Realty Capital, LLC

Address 2302-2416 S Goebbert Rd
Square Footage 173,962 sq. ft.
# of Units 217
Year Built 1989
Year Renovated 2015-19
Current Occupancy 94%
Market Occupancy 95%
Current Average Rents $1.49 psf
Average Market Rents $1.61 psf
Purchase Price $29,468,750
Price/Sq. Ft. $169 psf

Top Questions

All answers are provided by the sponsor, Randolph Street Realty Capital, LLC, or its representatives.

 

Why are you buying this property?

Jack von Albade, Randolph Street Realty Capital, LLC: "RSRC owns a controlling interest in this suburban Arlington Heights, Illinois condominium project built in 1989 and is executing its de-conversion plan to acquire the remaining units and operate the property as an integrated rental apartment community which will significantly increase the value of the asset. RSRC acquired 185 units in a bulk purchase in December, 2020 and currently controls all of the HOA Board Seats. RSRC is under contract to acquire 32 additional units from a single owner with a closing date scheduled at the end of May, 2021. RSRC owns above the statutory threshold of units required to purchase or cause the sale of all remaining units by right, without need of any consent. After the acquisition of the 32 units under contract, RSRC will own 217 units (90%) and will continue to pursue acquisition of the remaining 23 units through negotiated sales and believes it will be able to acquire all of them without resorting to the forced sale provisions of the condominium statute."

 

What is Round 2?

Jack von Albade, Randolph Street Realty Capital, LLC: "Round 2 is the planned follow-on capital offering for the second bulk acquisition of condominium units. Sponsor acquired 185 of the 240 condo units in December, 2020 and is raising additional equity to acquire the remaining 55 units, at least 32 of which are under contract and will close in May, 2021. Round 2 invested dollars will be treated on the same economic basis as the dollars invested in the first round offering, with returns equitably adjusted based on the respective dates of the investment."

 

What are the most important aspects of this investment opportunity for the investors?

Jack von Albade, Randolph Street Realty Capital, LLC:

  • "Acquire additional 32 condominium units totaling 217 of the total 240 units at the complex"
  • "Build to stabilized cap rate of 6.6% cap versus low 5% cap rates for 80s vintage value-add projects in current environment"
  • "Projected 1.85x – 2.4x LP cash multiple between 4 and 7-year hold"
  • "Finance with loan from TCF at Libor + 300 bps. interest rate; lender is providing a facility to buy back units at 70% of acquisition price"
  • "Opportunities to improve rental revenue and cut expenses"
  • “Commence resident utility reimbursement program which is already underway to the tune of $40-$60/month per unit”
  • “Renovate clubhouse gym and outdoor amenities; HOA funds to be used for common area rehab"
  • "Install in-unit washers/dryers and increase rents to the 1-bedroom units"
  • "De-convert condo regime either through buy-backs or forced sale through the IL Condo Act 75% rule"
  • "De-conversion will add value by expanding buyer pool to conventional multi-family operators and lower the exit cap rate"

 

What is your investment strategy/business plan?

Jack von Albade, Randolph Street Realty Capital, LLC: "Sponsor will close on the acquisition of the additional 32 units in May, 2021 and will then own 217 rental units. It will direct the HOA to renovate the clubhouse and improve the fitness room as well as invest up to $1,050,000 in interior renovations to the units primarily focusing on adding in-unit washers and dryers. Adding in-unit washer dryers will allow Sponsor to increase revenue throughout the hold and support strong cash annual yield throughout the investment. The average projected annual cash yield for a four-year and seven-year hold is 7.5% and 10.3% (including refi proceeds) respectively. Sponsor will also move to acquire as many of the remaining 23 units as possible at pricing which is accretive to projected cash yield, or alternatively, force de-conversion of the condominium as permitted by statute and sell the property. By abrogating the condominium declaration (that is, de-converting), the asset will attract a larger pool of potential buyers as a Value-Add multifamily property with consolidated ownership."

 

How has COVID-19 impacted your business plan?

Jack von Albade, Randolph Street Realty Capital, LLC: "Despite in-place rents being 6.1% below market levels, RSRC has underwritten a more modest 2% rent growth through years 1 & 2 of the investment to account for the impact of COVID-19 limiting rent growth. RSRC is focused on adding washers and dryers as value-add strategy during years 1-2 rather than cosmetic upgrades as RSRC believes that will be a stronger value-add strategy during the COVID (and hopefully post-COVID) environment."

 

What are the risks and how are you mitigating those risks?

Jack von Albade, Randolph Street Realty Capital, LLC: "The extension of eviction moratoria related to COVID-19 may impact revenues. RSRC will stay up to speed on programs to help residents pay rent. Pushing a value-add strategy may be impacted if a prolonged economic recession occurs resulting from COIVD, but risk is mitigated by good in place income for the property."

NOTE: All answers provided by the sponsor, Randolph Street Realty Capital, LLC, or its representatives.

Offered By

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Assets Under
Management

Currently
$251MM 10+ assets
Exited
$192MM 10+ assets
Portfolio LTV
58%  
Historical
Realized Returns

Total IRR
N/R  
Equity Multiple
2.37x  
Annual Cash
7%  
Years Of
Experience

As Principals
20+ years  
In Business
12 years  
Size
4 Staff  
* All information is reported by Randolph Street Realty Capital, LLC as of 11/23/2020.
Assets Under
Management

Currently
$251MM 10+ assets
Exited
$192MM 10+ assets
Portfolio LTV
58%  
Historical
Returns

Total IRR
N/R  
Equity Multiple
2.37x  
Annual Cash
7%  
Years Of
Experience

As Principals
20+ years  
In Business
12 years  
Size
4 Staff  
* All information is reported by Randolph Street Realty Capital, LLC as of 11/23/2020.

Financials

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Offering Financial

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Location Details

Arlington Heights, IL

Jack von Albade, Randolph Street Realty Capital, LLC: "The property is near the intersection of Algonquin Road and Arlington Heights Road in Arlington Heights, IL, approximately 23 miles northwest of downtown Chicago. The location affords the property with immediate access to I-90 and only an eight-minute drive to both the Arlington Heights and Mt. Prospect Metra stations, making the property a great location for commuters to downtown Chicago by car or train. The property is also only a short 10-minute drive from O’Hare International Airport, the second busiest airport in the US as well as a 10-minute drive to Woodfield Mall and adjoining Schaumberg Office Submarket which houses 37.2M sf of office space."

Documents

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Offering Agreement Documents

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