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Altus Mid-Month Update

February 2021

As February rolls on, we are seeing an uptick in deal flow as we continue to evaluate and offer on numerous opportunities. We just closed on the purchase of an industrial portfolio in Tulsa, Ok, the sale of a 104 unit multi-family development in Chico, CA, and we are in the midst of raising equity for a QOZ industrial development in the Austin, TX MSA. 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:

  • QOZ Industrial Development in Taylor, TX (Austin MSA): We are rolling out “Site 2” of our long-term development plan. The total development will consist of close to 1 million square feet and be comprised of various industrial uses. Site 2 consists of 10 acres and will include over 200,000 sq ft across 6 light industrial buildings. The buildings will be constructed over 3 phases, with the first phase starting in the coming weeks, and the 2nd and 3rd phases constructed as the market demands. Investors will obtain 100% of all cash flow up to an annual average 14% cash on cash return, plus a true up to a 14% ten-year IRR at investment termination (either redemption or property liquidation). This transfers the risk away from the investors and onto the sponsors. Even prior to starting construction we have agreed to terms on two separate leases totaling over 30,000 square feet and hope to have the leases memorialized in next couple weeks. This presents a great opportunity for investors with expected gains in 2021.
  • 63,000+/- light industrial portfolio in Tulsa, OK: We closed on an off-market opportunity with a short due diligence time frame. We have begun repositioning these assets so that the leases are in line with market; and expect to hold the portfolio for long-term cash flow.

Altus Asset Sale and/or Refinance:

  • Multi-Family Sale: The sale of our newly constructed 104-unit Class A apartments in Chico, CA successfully closed Friday. While Altus normally has a long-term investment philosophy, the strategy included a purchase option we sold simultaneous to our purchase of the property, greatly reducing the construction and lease up risk. The project performed better than proforma and was truly a win for everyone involved.
  • Multi-Family For Sale: We currently are in contract to sell two small multifamily properties in the Norman, Oklahoma market; an 18 unit and an 8 unit. Both properties were originally purchased as part of an eleven property portfolio, rehabbed, stabilized, and now on the market. All contingencies have been removed and the close date is anticipated at the end of February.
  • Multi-Tenant Industrial For Sale: We are in contract to sell a multi-tenant industrial property located in Florida. The buyer is currently in their due diligence period. In the event of a successful transaction, we anticipate doing a 1031 exchange with the current investors that elect to participate.
  • More Multifamily For Sale: Our investment partner in a two-property package (194 units) we purchase several years ago has decided to sell. We are softly offering them on the market through agents that we have relationships in the area.
  • HUD Refinancing: After completing a HUD refinance in December, we have received full approval and locked the interest rate on a second HUD refinance this past week with an anticipated close date in late February or early March. The loan terms obtained are a 2.33% interest rate locked and amortized for 35 years. While HUD financing is expensive and massively difficult to obtain, the terms provided are in great alignment with Altus’s long-term investment philosophy and make it worth the effort.

ACG (Altus Capital Group): Private Money Lending:

Asset based lending activity is increasing with more loan pricing requests and strong loans entering the pipeline. Loans currently being worked on are as follows:

  • A $900k purchase money loan to buy a property in Occidental, CA. A second residential property will be used for additional 1st position collateral with the total collateral providing a loan to value below 50%. The buyers are scheduled to remove their due diligence today, at which point we will open the opportunity to our lender investors.
  • A $1.5 Million loan on a mixed use commercial and residential property in Sacramento. The loan will likely be split into 1st and 2nd deeds of trust, with the total loan amount equal to or less than 50% LTV. The term sheet has been signed by the borrower and we will begin compiling lenders as soon as the appraisal is received verifying the anticipated value.
  • A $200,000 construction loan on a property in Chico Ca. The property owner is waiting on permits before we fund the loan.
  • In the pipeline: A $1.5 Mil second position loan on a newly constructed residential and hospitality property located in Santa Rosa CA. Combined loan to value will be below 65% with an interest rate expected to be around 12%. Existing investors in the project will have the first opportunity to fund the loan after which we will be able to open up the opportunity to the rest of our lenders.

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.