Skip links

Altus Mid-Month Update

May 2022

As we strategically navigate this inflationary environment, we are still seeing opportunities to grow our Altus investment offerings. Rising interest rates, coupled with increasing commodity prices certainly create obstacles, but we have some exciting things to share in the coming months. See below for more details on Altus’ current deals in various stages.

Activity Abuzz:

Highland Court Retail, Oxford MS: We are in contract to purchase a 42,000 sq. ft. surface retail center in the heart of the Oxford, MS commercial district. We like the opportunity because it produces excellent yields from the date of purchase forward, while also offering the opportunity for upside through lease up of some existing vacancy. We had a large part of the equity already earmarked from 1031 funds from the sale of the Bennett Pointe Apartments in Edmond OK. There is a small amount yet to be raised, and we will be taking the opportunity to investors this week. The closing is scheduled for late-May.

Greenville Industrial, Greenville SC: We are in contract on a vacant, new construction light industrial building in Greenville, SC. We love the Greenville market and are optimistic about the leasing prospects of this project. 1031 funds from the sale of the Magnolia Terrace Apartments in Redding CA and the Windsor Wyndham Apartments in Norman, OK will provide the equity for this purchase. Due diligence has been completed, and we are working through the details with our lender. We anticipate raising a small amount for this project in the form of shorter-term debt. Details will be available in the next week or so.

Oxford QOZ: We have partnered on the ownership of QOZ land with experienced developers that live in Oxford, MS (Forrest’s favorite small town, and the home of Ole Miss). The project consists of a fully entitled master plan QOZ development. The development is slated for up to thirteen individual construction projects that will be offered to investors as they come to fruition. Proformas continue to be sharpened for the first two of the thirteen individual projects. The projects are expected to be structured for QOZ eligibility, and we have QOZ investors lined up and waiting for final details so their investment can be placed.  Additional projects and the associated investment opportunities are expected to continue throughout the next year.

Highfill Duplexes: Last fall we purchased land just outside of Bentonville, AR to build 147 duplexes (294 units). The entitlements are complete and the horizonal construction has commenced. We rolled 1031 funds into the purchase. We are still determining how we are going to structure the equity needs for the remainder of the project, but we anticipate that our investing community will be able to participate in a similar structure as the Chico Apartments development a few years ago, possibly in a fund structure with multiple other development opportunities. We are currently exploring fund structures and will have something more concrete to share with investors in the coming weeks/months.

New Industrial (Charleston, SC) and New Multi-Family (KC MSA) Construction and Lease-up: We originally closed out the equity raise in July of 2021 for the investment in the pre-construction of a new 1.4m sq ft. industrial development in the Charleston, SC MSA, and the construction of a 375-unit (estimated) luxury apartment complex located in a 200-acre master planned development in a high-end Kansas City, MO suburb.

Due to a rising hard cost environment, we have been navigating our way through several variables for both projects. Regarding the Camp Hall industrial property, our LP equity is contracted, term sheets are being negotiated with a lender, and we are working on locking in construction costs. We have received interest and are negotiating a PSA on a forward sale of the property. We will be closing on the purchase of the land at the end of May.

We have separately received interest in the equity and debt for the Kansas City apartments, though negotiation with those parties is currently on hold while we work on nailing down the costs. The rapidly changing economic inputs have brought about some challenges, but we are working every angle possible to make the deal.

Debt Liquidity Fund: The Debt Liquidity Fund continues to be a popular investment for investors that want to park cash into a safe, liquid investment vehicle. The fund provides investors with a solid monthly yield (4% per annum) on funds that may otherwise be sitting around in a CD or a bank account not earning much interest. The fund is comprised of a portfolio of real estate loans that are in 1st lien position and are all below 50% LTV. This is an open-ended fund that allows investors to redeem their position (or a portion of their position) with 30-days-notice. We are currently fully funded but there will continually be opportunity for investors to place funds as the fund is able to identify qualified loans, so let us know if you would like to be added to the wait list.

Murrieta Mixed-Use Development: Located in Old Town Murrieta, the project consists of bottom floor restaurants and retail with three floors of apartments above the street level. Our direct involvement in the project won’t commence until late summer, at which time we will determine the best route for debt and equity options.

Arrow’s Edge Apartments, Sherwood AR: We are in contract to sell the Arrow’s Edge Apartments located in the northern part of the Little Rock, Arkansas metro. The buyer has a nonrefundable deposit on the property, but the closing has been extended for the time being. Despite the hefty prepayment penalty on the debt, the project IRR will still end up being around 30% (including the penalty). Investors in this project have indicated a desire to 1031 the proceeds into a new investment. We are currently brainstorming on different possibilities.

Miscellaneous: We are close to finalizing a deal for a fully entitled apartment opportunity in the north part of the Dallas metro. Assuming we are able to proceed, this deal structure will likely be part of a larger fund opportunity that will be structured very similarly to the Skyline Apartments that we built and sold in Chico, CA.

ACG (Altus Capital Group): Private Money Lending:

Demand for private money lending investments continue to be very strong, though despite some increases in government bond rates, we have not yet seen strong upward movement in private money lending rates. We recently closed on funding a $2.6 mil loan for the purchase of a commercial property located on the outskirts of the town of Sonoma. We will be raising $1.55 mil for the purchase of a spec industrial building in Greenville, SC (mentioned above), and will start work on a land loan north of Dallas in the coming weeks. Additionally, there are small loans that we have closed on throughout each month.

As always, opportunities are first offered to our active investor interest list. Please reach out to us if you have funds for lending and would like to be added to the list. If you are trying to figure out the capital stack for your own project, feel free to reach out and we are happy to brainstorm possibilities with you.

If you have interest in discussing equity or lending 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.