Venture at Villa Hermosa

• Capital Structure

   % of Total Project Costs

    65-70%        Loan

    20-35%   Preferred Equity from Crowdfunding

    1-5%       Common Equity from 66th Place Capital LLC

  Investors are purchasing preferred equity membership interests in Venture at Villa Hermosa, LLC,  which will in turn purchase and hold title to 5407 North 10^th Street, Phoenix, Arizona 85014. Over the 2 year hold period, the preferred equity is expected to yield 12% total annualized return, with an average of 4% of the total return coming from rents (paid quarterly) and the other 8% coming from capital gains when the property is sold.

  In addition to this crowdfunding offering, Venture at Villa Hermosa LLC is taking on approx $2,228,571-$2,400,000 in debt to complete the funds needed of $3.6 mn.

Property Transformation Plan

Each unit has 2 bedrooms and 1 bathroom. 

It is the intention of the Sponsor to renovate the interior of each unit with new flooring, cabinets, fixtures, paint, and appliances. On the exterior, we plan to enhance the building’s curb appeal by new trim painting and updating the roof. We also plan to replace the facia and update the landscaping. 

Neighborhood Overview

Venture at Villa Hermosa is located at the north end of Phoenix’s North Central Submarket, often referred to as Phoenix Midtown. The submarket is comprised of four major neighborhood/districts:

1. Phoenix College/Melrose (85013 zip code)
2. The Yard/Cheery Lynn (85014 zip code)
3. Christown (85015 zip code)
4. North Central (85012 zip code)

Existing Housing

In the 85014 zip code there are 130 properties (10+ units in size) containing 6,788 units (or 31% of the entire multifamily housing stock for the submarket) with an average year built of 1968.

Under Construction

85012                             85013                                 85014                                 85016

11 Projects                     12 Projects                         7 Projects                           16 Projects

$1.3 Billion (Total)          $404 Million (Total)*           $206 Million (Total)              $511 Million (Total)*       

$122 Million (Avg)          $34 Million (Avg)                $29 Million (Avg)                 $32 Million (Avg)

Of the 46 total projects noted above, 23 are multifamily or have a multifamily component as part of a larger mixed-use or master-planned development. These projects total more than $2 Billion. Total estimated construction and development costs for the 10 North Central Phoenix projects identified exclusively as apartment/condo, senior housing or student housing amount to $428 Million.

Opportunity in Rents as Airbnb property

Current Rents for the property are $800 per unit. After renovation, if operated the property as a traditional apartment building we would expect to rent each unit for $1,250 per month. 

As an Airbnb property, we expect to generate around $1,450 per unit per month. This implies a 45% occupancy rate at $139 nightly rent. 

Occupancy

For a growing MSA, much like the Phoenix MSA, a general rule-of-thumb is that occupancy should trend between 94 to 96% for equilibrium.

Average occupancy for both the submarket and neighborhood/zip code has been trending in the 95% range for the last several years.

With little in the construction pipeline, and the area’s continued population growth, occupancy rates should increase with rental rates correspondingly rising in both the near-to-mid term.

Two-bedroom units

Neighborhood/Zip Code Average              $1,212/month

Project Breakdown

Purchase Price:                           $2,450,000

Renovation:                                 $   650,000

Furnishings:                                 $   150,000

Closing Costs and Reserves:      $   275,000    

Total:                                           $3,525,000

Capital Structure

 % of Total Project Costs

  65-70%        Loan

  20-35%   Preferred Equity from Crowdfunding

  1-5%       Common Equity from 66th Place Capital LLC

Investors are purchasing preferred equity membership interests in Venture at Villa Hermosa, LLC,  which will in turn purchase and hold title to 5407 North 10^th Street, Phoenix, Arizona 85014. Over the 2 year hold period, the preferred equity is expected to yield 12% total annualized return, with an average of 4% of the total return coming from rents (paid quarterly) and the other 8% coming from capital gains when the property is sold.

In addition to this crowdfunding offering, Venture at Villa Hermosa LLC is taking on approx $2,228,571-$2,400,000 in debt to complete the funds needed of $3.6 mn.

Purchase & Sale Price

                                                                    Per Unit                Total

Purchase Price                                           $175,000             $2,450,000

Renovation                                                 $  46,500             $   650,000

Furnishings                                                 $  10,700             $   150,000

Target Sale Price                                       $275,000             $3,850,000 

New Completed Developments

Crown on 7th

The $7.8 million Crown on 7th project was built at the former Crown Imports building between Missouri Avenue and Bethany Home Road.

Venture REI principal Dan Noma Jr. and real estate executives Buzz Gosnell and Niels Kreipke purchased the building in 2014 for $1.8 million and have spent $6 million on its redevelopment which opened at the end of 2015.

The Colony

The Colony, an adaptive reuse project by Western Vertical Holdings, several restaurants, a gastro pub among other tenants.  It is currently finishing construction near 7th Street and Missouri Avenue, just south of the popular eatery venue The Yard.

Western Vertical Holdings, led by Bob Agahi and David Sellers, is redeveloping a vacant 1950s building and constructing a smaller new one next to it to create 22,467 square feet of space at The Colony.

The Yard

What was once a motorcycle garage and dealership on 7th Street and Montebello Avenue is now a restaurant cluster known as the Yard.  The concept from restauranteur Sam Fox, the Yard opened on February 11, 2013, in north-central Phoenix. The 53,000-square-foot space is home to the Valley’s second Culinary Dropout gastropub; the other location is in Scottsdale.

The Yard boasts an open gathering space outside as well as $8 million courtyard was a product of Fox Restaurant Concepts and WDP Partners.

Pomo Pizzeria Napoletana | Cold Beer & Cheeseburgers | Pita Jungle

Across the street from Fox Restaurant Concepts, The Yard, and just a block northeast of Western Vertical Holding’s, The Colony, Western Vertical is developing another restaurant space in the Restaurant Row District, Pomo Pizzeria,

To Pomo’s south, Cold Beer & Cheeseburgers 7^th Street location completed construction in March 2017 and just south of Cold Beer, Pita Jungle opened their largest restaurant to date at the NEC of 7^th St and Missouri.

240 Missouri

K Hovnanian Homes acquired this 2.47-acre property in 2015 for $5.51M with plans to develop 29 high-end townhomes on the site which was completed by 2017.  Featuring a highly desirable location within midtown Phoenix, AZ, 240 Missouri will offer three new home designs of 2- and 3-bedroom townhomes.

This upscale gated community will put you within minutes of excellent restaurants, shopping, and public transportation.  All units have been sold starting in the mid $400’s.

200 East

It is an under-construction residential subdivision consisting of 10-luxury, single-family homes by Porchlight Homes at 2^nd Street and Georgia Avenue in Phoenix. 

Uptown Plaza Shopping Center Redevelopment

The center, built in 1955 by Del Webb on the northeast corner of Camelback Road and Central Avenue, is being revamped by Phoenix-based Vintage Partners. Uptown Plaza is undergoing a wall-to-wall renovation dedicated to restoring this Mid-Century Modern gem to its former glory. Originally located just outside the city limits, this once distant shopping center is now considered part of Phoenix’s urban core, with the surrounding Windsor Square neighborhood recently ranked as one of the “best big city neighborhoods in America” by Money magazine. 

With completion expected in late 2016, the restored Uptown Plaza will once again serve as a bustling, brick-lined heartbeat for all of north-central Phoenix, and featuring the same vibrant mix of local, regional and national tenants that helped make this historic development such a success in previous decades.

Creighton University to build $150M Phoenix medical school next to Park Central Mall

Creighton University plans to build a $150 million medical school at Park Central Mall next to St. Joseph's Hospital and Medical Center in Phoenix. Plans call for training 700 medical students in what will be two buildings totaling 300,000 square feet on the southeast corner of the mall property at Central Avenue and Catalina Drive.

Phase I will be a 150,000-square-foot building that will cost between $75 million and $100 million to develop, followed by a mirror image of a second 150,000-square-foot building at a later time as the school grows. Creighton expects to break ground in spring 2019, said Dale Davenport, senior associate dean for Creighton University School of Medicine. He said the Phoenix campus is expected to welcome students beginning in July 2021. Phase I of the project will include the construction of a 2,000-space parking structure that will cost $25 million to build and will be funded by bonds, said Christine Mackay, economic development director for the city of Phoenix.

Creighton University Medical School has been growing its presence in partnership with Dignity Health's St. Joseph's Hospital and Medical Center for more than a decade. Creighton's third- and fourth-year medical students do clinical rotations at the Phoenix hospital. By 2016, the Jesuit Catholic medical school — based in Omaha, Nebraska — signed an affiliation agreement with Maricopa Integrated Health System and Dignity Health. That relationship solidified further when the three organizations created the Creighton University-Arizona Health Education Alliance to oversee graduate medical education programs for MIHS and St. Joseph's, as well as the program for District Medical Group, the physician partnership that works at MIHS.

Now 325 graduate medical education residents are under the alliance's umbrella, with 204 residents coming from MIHS and 111 from St. Joseph's. The goal is to have 700 to 800 students on campus. Creighton currently has 100 medical students in Phoenix.