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Altus Mid-Month Update

June 2021

Exciting times are upon us as we are in the midst of launching our first Debt Liquidity Fund, and we have several other deals that will be coming to fruition in the coming weeks. Our pipeline is at historical capacity, with plenty of investment opportunities for our investors on the horizon. See below for more details.

Activity Abuzz:

Debt Liquidity Fund: Due to increasing demand from our investors to be able to invest into a safe, liquid investment vehicle, we created the Debt Liquidity Fund. This provides investors with the opportunity to earn a solid return on cash (4-5%) 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, with additional capital invested by Altus’s shareholders in a junior position as additional collateral. This is an open-ended fund that allows investors to liquidate their position with 30-days-notice. In just under a week we have raised nearly the full amount for the fund. We have a small amount remaining, so please reach out ASAP if you would like to participate.

New Industrial (Charleston, SC) and New Multi-Family (KC MSA) Development: We are preparing to raise equity to invest in the pre-construction of a new 1.3m sq ft. industrial development in the Charleston, SC MSA, and the construction of a 399-unit luxury apartment complex located in a 200-acre master planned development in a high-end Kansas City, MO suburb. Investments made in this opportunity will be for both projects, therefore spreading risk across geographic locations and property types. Equity raised will be used to fund the pre-construction costs of the two projects, both of which already have entitlements in hand. Returns on the invested equity will accrue up until the start of construction; and will then vest into the project at the stepped up, accrued amount. The final investment structure has yet to be determined but returns are anticipated to be considerably higher than our normal offerings due to the nature of the investment.

QOZ Industrial Development in Taylor, TX (Austin MSA) (FULLY RESERVED): We have met our targeted raise amount and anticipate closing out the investment in the coming weeks. This is a great opportunity for investors with gains in late 2020 and 2021. Two leases totaling close to 40,000 sq ft have been agreed upon (~$350,000 of annual NOI). The total development will consist of close to 1 million square feet and be comprised of various industrial uses. The current tract is 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 site work already in process and first phase vertical construction starting in the coming weeks; with the expectation the first building will be completed this summer. The 2nd and 3rd phases will be 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.

Sacramento Strip Retail (FULLY RESERVED): While retail has generally been panned by real estate investors, we have remained bullish to specific types of retail, including surface centers in well located areas with businesses that can’t be “Amazoned”. We have a center in Sacramento in contract that fits that profile, and we are moving forward with the purchase. At the negotiated price, this California property will provide investor yields returns north of 7% from the time of purchase.

Miscellaneous: Negotiations are ongoing for the build out of a multifamily project in Northern California, a mixed-use development in Southern California, a mixed-use development in Oxford, Mississippi, a ground up development of 280 BFR duplex units in one of our favorite markets of NW Arkansas (where we just finished construction of another similar project), and the purchase of a light industrial property in the Austin metro. If successful we will be able to share those details in the coming months.

Altus Asset Sale and/or Refinance:

  • In Contract: Multi-Tenant Industrial For Sale: The buyer has removed all contingencies. The sale is scheduled to be finalized on the 24th of this month.
  • Multifamily For Sale: Our investment partner in a two-property package (194 units) we purchase several years ago has decided to sell. Both properties are in contract to sell with nonrefundable money having been received and the loan assumption by the buyers currently in process.
  • More Multifamily For Sale: We recently went under contract to sell three properties that were purchased as part of multifamily portfolio in Norman, OK. The originally strategy was to sell these properties once stabilized. Though the timelines got pushed back due to COVID revenue volatility, the properties are now in contract at or above our original projections.
  • And More Multifamily For Sale: We agreed to an off market offer to sell our Villagio property in Sacramento. This property value has more than doubled during our five-year hold period, producing over 300% returns (we had already refinanced out, and reinvested the original purchase capital). The sales proceeds will be 1031 exchanged into other opportunities.
  • And yet More Multifamily For Sale: We have just gone under contract to sell our Magnolia Place Apartments in Huntsville Alabama. This was a renovation and repositioning project whose original strategy was to sell upon completion. Based on the accepted offer price the project will outperform original projections.

ACG (Altus Capital Group): Private Money Lending:

Our private money business is off to a great start of the year with loan volume up sharply, AND, at least in our belief, high quality loans on a risk reward basis. The most recent loan, funded earlier this week, went to an experienced real estate investor, and had excellent collateral in place. Loans are currently funding so quickly we are not generally able to show them as opportunities in our mid-Month update. If you have interest in participating in private debt, please reach out to us so we can add you to our interested list.

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.