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Altus Mid-Month Update

May 2020

As we continue to try to make sense of the many uncertainties both social and economic, we at Altus have been proactively pivoting to adapt to the ever-changing environment. Much of our focus has been engaged in long-term asset preservation and downside mitigation, but we are also actively pursuing future opportunities.

The last month was pretty intense for our asset optimization and accounting teams. After a brief respite at the end of the month, we are back into it, trying to ensure the short-term survival of each property while also keeping an eye on the properties’ long-term success. In many cases, April was a far better month than we had anticipated, but there are definitely still challenges on the horizon. This is both at the individual property level in dealing with residents/tenants and changing local regulations, as well as on a broader level.

While in the short run these challenges create stress and lots of work, these same challenges we are dealing with today are likely to be the opportunities of tomorrow. With this in mind, we continue to look for investment opportunities in individual assets, while also trying to come up with a larger and longer-term strategy. We are very interested in deals with solid real estate fundamentals, so let us know if something comes across your desk that looks interesting….

Our fearless leader, Forrest Jinks, was recently interviewed on the “Rock Your Talk” Expert Interview Series. You can check his insightful perspectives here:

3 Tips To CEO Leadership During COVID-19 from Forrest Jinks, CEO of Altus Equity Group

Activity Abuzz:

  • QOZ- Santa Rosa Hotel Extension: Initial terms have been reached on a partnership with a local builder for a QOZ eligible hotel expansion in Santa Rosa. Altus and affiliates are raising $16 Mil for this project. The marketing package and financials are complete and have been sent out to prospective investors. We are now in the process of updating our financial analysis to take into consideration the short and long term affects of the Covid-19 pandemic.
  • OKC Retail Portfolio: We are again negotiating the purchase of a portfolio of retail properties spread throughout Oklahoma City, OK. We worked with this seller more than a year ago for several months and wasn’t able to come to final terms. The current offer being considered is far below replacement cost. With the severe disruption to the retail economy we believe this presents a unique opportunity to buy at the bottom. However, with the current situation we don’t feel any need to rush and are taking our time in negotiations to make sure we have a good picture of how the assets will be performing coming out of the shut downs.
  • 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 COVID virus. The outline of terms has been agreed too and the formalization of such terms is on-going. This will likely be offered as a long-term equity investment opportunity to our investor community. We will continue to share details as they become available, but we are hopeful we will still be able to break ground on the site improvements later this summer.

Altus Asset Purchase and/or Refinance:

  • Purchase/Refinance: Brixton Apartments (Beech Grove, IN): We are working with our partners on a buyout and refinance in which Altus will take ownership of the property and allow investors to convert debt to equity positions.
  • Refinance: Charleston Apartments (Norman, OK): We have agreed to terms on a refinance of the property and are in the initial stages of underwriting with the lender.
  • 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. We are in conversations with several banks about providing the rest of the construction funds needed for the project.

ACG (Altus Capital Group): Private Money Lending:

Upcoming Lending Investment Opportunities:

  • $12 million 1st DOT or combination of 1st and 2nd for a cannabis industrial complex in Santa Rosa, CA: Less than 50% LTV (1st & 2nd combined). We presented multiple loan options to the property owners, but at this time the borrower has chosen to not move forward.

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.