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170 River Dr - StorageBlue Garfield NJ
Offering short link
Raise Details
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Gross Offering$575,000 USD
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Available Units0.00
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Minimum Investment$10,000 USD
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Maximum Investment$800,000 USD
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Open DateApr 01,2020
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Closing DateFeb 01,2021
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Investment TypePreferred Equity
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Maturity9 months
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Real Estate UseRetail
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Maturity End Date
Type
| Type | Number of Units | Available Units | Cost per Unit | Gross Offering | Annual Yield | Term |
|---|---|---|---|---|---|---|
| Preferred Equity | 10.00 | 0.00 | $57,500.00 USD | $575,000.00 USD | 25.51% | 9 months |
| Totals | 10.00 | 0.00 | $575,000.00 USD |
Executive Summary
Overview. Four Arrow Funding, Inc. (the “Issuer”) is making a $685,000 preferred equity investment (“PE”) to a newly formed limited liability LLC (the “Borrower”) formed by Alan Mruvka (the “Guarantor”). The PE is secured by 22 Passaic Street, Garfield NJ (the “Property”). The Property is a 47,925 SF self-storage facility with 643 units. The approximate value (the “Value”) is $7.5 million. The Property is near completion. An unexpected $500,000 is required to complete the construction. The PE (plus costs) will fill the gap for the Borrower. The Issuer is an affiliate of Chesterfield Faring Ltd (“CFL”).
Capital Structure. The Property is currently secured by a first mortgage loan (the “Loan”) of $4,805,000. The Borrower has $2.0 million of common equity (“CE”) invested in the Property. The PE has $2.0 million of CE subordinated to the PE. The Loan is 64.15% Loan to Value. The PE including the Loan is a 73.30% Loan/PE to Value. The Value of the Property must decrease by over 26.70% before you as investors (the “Investors”) would have any risk of principal loss.
PE Participations. The Issuer provides PE loan participations to its Investors. The Issuer is offering ten (10) $68,500 units (the “Units”) totaling $685,000 for $57,500 each for a profit of $11,000 per Unit. The term of the PE is nine (9) months, so the annualized return is 25.51%. The Investors will receive Units from the Issuer secured by the PE that the Issuer makes to the Borrower. See the PE Loan Participation agreement for more details and risk factors.
Collateral Held. The Collateral includes an unrecorded secondary assignment of the LLC membership interests. If and upon a default, if any, the Issuer has the right to sweep all monthly net cash flow to repay the balance in full. The Borrower and the Guarantor shall personally and severally guarantee repayment of the PE.
Property Description. The Property is a four-story industrial building with approximately 47,952 SF situated on 3.444 acres located near the Passaic River. It features 643 self-storage rentals with an average size of 166 SF, 24/7 surveillance, a climate-controlled environment, free curbside pickup for smaller units, business storage, moving equipment rental, online bill pay, U-Haul truck rental, and a moving supply shop. The Property was completed in 2018 except for some minor completion items which will be paid using the proceeds from the PE.
Self-Storage Industry. The self-storage industry, especially near major metropolitan SMSAs, has much greater demand than supply, especially in the northeast corridor of the US. Surging demand among consumers for same-day delivery, coupled with proximity to the ports, has encouraged healthy demand, particularly as rental rates remain less than half the price of similar spaces in New York City. Despite this strength, new supply growth has been marginal, averaging just over 1 million square feet annually over the past four years. Meanwhile, net absorption has more than tripled supply growth during this time, prompting a vacancy rate nearly 200 basis points below the previous cycle low. As a result, prospective tenants have rapidly pushed the average asking rent dramatically higher, with the typical rate up more than 40 percent over the past five years.
Highlights
- Preferred Equity
- Self Storage
Comments
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