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Altus Mid-Month Update

September 2020

Our acquisitions team has been busy unearthing new investment opportunities that we will be sharing with our investment community in the coming months. We are finding that with creative deal structuring, there are some attractive deals to be obtained. We remain interested in properties with solid real estate fundamentals, so let us know if something comes across your desk that looks promising….

Activity Abuzz:

  • NW Arkansas Multi-Family: We have negotiated the purchase of two multi-family properties in a booming NW Arkansas community. The first property consists of 100% occupied, new construction duplexes on individual parcels. The second property is a QOZ (Qualified Opportunity Zone) development from the same owner/developer as the other property. All the entitlements are in place and construction has started. We are in the midst of putting the marketing package together and will commence raising investment equity for the deal in the next week.
  • QOZ- Santa Rosa Hotel Extension: We are working in partnership with a local builder on a hotel expansion in Santa Rosa, CA. Altus and affiliates are raising a little over $8m of new equity for this project. Due to impacts of COVID progress has been slower than anticipated, but the project remains attractive so we remain hopeful we will be able to identify interested equity joint venture partners.
  • 130 Unit Multi-Family Development in Santa Rosa: This 130-unit apartment build out project is continuing forward, although more slowly than preferred due to the current impacts of the COVID virus on the working efficiencies of local government employees. The project approval letter from Fish and Wildlife that was anticipated being received at the end of August has been postponed until mid-November. While this delay affects the project breaking ground, we remain optimistic the project will move forward. Pricing for the improvements are being obtained and negotiated. The long-term expectation is that the project will be refinanced to HUD 35-year fixed rate financing at completion, and we will offer investors a long-term equity investment opportunity. We will continue to share details as they become available.

Altus Asset Purchase and/or Refinance:

  • Purchased: Brixton Apartments (Beech Grove, IN): We worked with our partners on a buyout in which Altus and our investors have taken full ownership of the property. This is a great stabilized property that we have wanted to own outright for quite some time. The long-term equity ownership opportunity was fully funded by the existing lenders/investors, which we closed on in mid-August.
  • Construction loan: Taylor Industrial QOZ: Development and Construction of our QOZ cold storage project in Taylor Tx (Austin MSA) is underway with initial improvements being paid out of cash on hand. The construction loan was completed last week and construction is barreling forward. The tenant is anxious to receive the space as their business is growing rapidly. Additionally, because of market demand, we are now planning to build out the second ten-acre lot sooner than we originally anticipated. We are in the process of starting a second QOF to fund some initial spec development so we have product ready to lease. A marketing package will be available in the coming weeks.

ACG (Altus Capital Group): Private Money Lending:

Though the Asset Based Lending market slowed as a result of the shutdown, it is starting to come back to life with more loan pricing requests. We anticipate that there will be increasingly more opportunity in the coming months. With local banks and institutions tightening up their lending requirements, we feel it is an opportune time to launch a debt fund to step in and assist borrowers that will be searching for alternative financing. There will be ample opportunity for investors to invest in the Altus Debt Fund soon. Stay tuned for details. Loan currently being worked on:

  • Elk Grove area SFD – A relatively straight first position loan on a property currently owned free and clear and an interest rate of 9%. This loan will be funded in the coming week.
  • Mill Valley SFD – This is a $3 Mil second loan behind a low interest rate first, with a combined loan to value of 65%. The expected interest rate is a little over 10%. Due to complexities of the ownership and debt structure progress has been slow. Assuming those issues are able to be understood and resolved we will begin to raise funds in the coming weeks.
  • We just completed a mezzanine debt raise for an apartment complex in the Midwest with a sub 65% combined loan amount, and an interest rate of 8.5%.
  • Due to experience in raising debt funds, Altus Capital has been hired as a consultant to help a rapidly growing business obtain debt to fund inventory purchases. The company currently has 100% of their inventory presold and are in desperate need for funds to be able to pay for the third-party factories to ramp up production of their product.

If you have interest in discussing opportunities in greater detail, please reply to this email or call our office at (707) 932-5887.  We will gladly add you to our distribution list and/or schedule an appointment to discuss your investing needs.

Happy Investing,

The Altus Investment Team

 

This message is not an offer or solicitation of an offer to buy or sell any securities.  Offers are made only by prospectus or other offering materials.  The information contained herein has been obtained from a variety of sources which are believed to be reliable, but have not been independently verified, and may be subject to change without notice.  To obtain further information, you must complete our investor questionnaire and meet the suitability standards required by law.