CAPITAL REAL ESTATE 1800 Larimer Street, Suite 1700 Denver, Colorado Telephone: (303) Fax: (720) Web site:

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1 CAPITAL REAL ESTATE 1800 Larimer Street, Suite 1700 Denver, Colorado Telephone: (303) Fax: (720) Web site:

2 TABLE OF CONTENTS ABOUT CRE INVESTMENT STRATEGY...4 TRACK RECORD MEET THE TEAM For more information please contact: DAN LEVIN Managing Director Levin@CRE-USA.com 1800 Larimer Street, Suite 1700 Denver, Colorado Phone: (303)

3 ABOUT CRE ABOUT CRE Capital Real Estate, LLC (CRE) is a Denver, Colorado based real estate investment firm specializing in the acquisition, management and disposition of multi-family real estate investments. CRE leverages unique expertise in market intelligence, deal sourcing and asset management to optimize investment yields and investor returns. Since its formation in 2005, CRE has established a real estate portfolio of approximately $456,600,000 in apartment communities consisting of 21 properties and 3,957 units. CRE s management team brings to the table a wealth of experience in the multihousing industry. Dan Levin comes with 27 years of multifamily experience including acquisition and development, property management, asset management, conversion and investor relations. Jeff Hawks and Doug Andrews have teamed as Denver s leading apartment brokers for the last 21 years and are industry veterans of 42 and 31 years, respectively. This team offers extensive experience in sourcing acquisitions and due diligence, as well as providing effective asset management and accounting to optimize the upside potential on each individual property. We believe that the current economic environment presents a window of opportunity to acquire apartments at very attractive prices with compelling IRRs and cash-on-cash returns. Our strategy is to purchase apartments with strong fundamentals of location and design in recovering markets with solid prospects for cash flow and appreciation. Our focus is on the markets we know, including Colorado and the Phoenix metropolitan area. At CRE, we believe that the current economic environment presents a window of opportunity to acquire apartments with exceptional returns to our investors. CAPITAL REAL ESTATE 3

4 INVESTMENT STRATEGY Why Apartments? Apartments differ from other commercial asset classes because they are fundamentally a cash flow business. By contrast, in the case of commercial assets like office buildings and retail centers, investors typically make their returns or fail to make them upon disposition. Tenant improvements and leasing commissions can soak up cash flow and, as we have recently observed in this cycle, even credit tenants can fail. Apartments fundamentally present lower risk. There are no tenant improvements or large leasing commissions and a single tenant can t create a vacancy problem. As long as debt service is well covered, it is unlikely that either vacancy or dropping rents will result in any significant investment stress. This is reinforced by certain unique dynamics in the market during the past four years that included a compression of multifamily cap rates, positive cash-flow dynamics caused by historic low interest rates, and the reduced demand for single family homes. Our strategy is based on utilizing our market knowledge and management expertise to identify special opportunities and situations that are generally overlooked as a result of the rigid parameters set by institutional purchasers. Apartment demand is expected to increase significantly over the next 20 years. The national home ownership rate rose to 69% in 2006 from the historical norm of 65%. Today, the rate is falling due to tighter credit, a weaker economy and a growing belief among potential buyers that owning a home is not a great investment. The national howeownership rate has now fallen to 63%, the lowest it has been in over 20 years and it continues to fall even as the economy has recovered. Conclusion. The current economic cycle offers the best opportunity to purchase multifamily assets in over 15 years. The combination of historically low interest rates from Fannie Mae and Freddie Mac, strong rental demand and low suburban construction volume allow for the purchase of multifamily assets at prices that are well below replacement cost. CAPITAL REAL ESTATE 4

5 INVESTMENT STRATEGY These current market conditions are perfect for multifamily acquisitions in both Colorado and Arizona. CAPITAL REAL ESTATE 5

6 THE SEASONS AT HORSETOOTH CROSSING Fort Collins, CO 208 units YOC: 2000 Acquired September 2006 Premier property initially built as condominiums Long-term financing at 5.94% Excellent location; proximate to Colorado State University and major arterials 2016 annualized cash yield to investors projected at 11.0% CAPITAL REAL ESTATE 6

7 THE BUTTES Loveland, CO 111 units YOC: 1997 Acquired July 2011 Class A property Excellent location and drive-by traffic Additional land provides opportunity for expansion Long-term financing at 4.85% 2016 cash yield to investors projected at 14.5% CAPITAL REAL ESTATE 7

8 SAGE BROOK Denver, CO 216 units YOC: 1973 Acquired December 2011 Excellent visibility on high-traffic corridor Long-term financing at 4.24% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 8

9 CITY SQUARE Denver, CO 131 units YOC: 1973 Acquired June 2012 Excellent location near I-25 corridor Value-add program Long-term financing at 3.92% Supplemental loan in 2015; 56% of equity returned to investors 2016 cash yield to investors on remaining equity projected at 12.0% CAPITAL REAL ESTATE 9

10 COPPER RIDGE Louisville, CO 129 units YOC: 1994 Acquired March 2013 Premier boutique property with excellent location and drive-by traffic Long-term financing at 3.84% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 10

11 VILLAS AT MOUNTAIN VISTA RANCH Surprise, AZ 256 units YOC: 2003 Acquired April 2013 Class-A product Excellent location, proximate to I-303 corridor, currently under construction Long-term financing at 3.82% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 11

12 HEIGHTS ON HURON Northglenn, CO 252 units YOC: 1970 Acquired November 2013 Excellent location and proximity to major arterials Value-add program Long-term financing at 4.70% Supplemental loan projected in 2015/16; Project 80% of initial equity returned to investors 2016 cash yield on initial equity amount to investors projected at 7.25% CAPITAL REAL ESTATE 12

13 THE FLATS AT PINECLIFF Colorado Springs, CO 196 units YOC: 1971 Acquired May 2014 Excellent location and visibility proximate to I-25 corridor Long-term financing at 4.72% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 13

14 VISTA PARK Aurora, CO 283 units YOC: 1973 Acquired August 2014 Great drive-by visibility proximate to I-225 corridor Long-term financing at 4.28% Value-add program 2016 cash yield to investors projected at 7.25% CAPITAL REAL ESTATE 14

15 SKY AT BEAR CREEK Colorado Springs, CO 148 units YOC: 1970 Acquired January 2015 Located in prestigious Broadmoor area Value-add program Long-term financing 4.31% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 15

16 FALLS AT LAKEWOOD Lakewood, CO 96 units YOC: 1969 Acquired February 2015 Turn-key renovated property Located proximate to Denver Federal Center Excellent employment base Long-term financing 4.38% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 16

17 HIGHLAND WAY Northglenn, CO 230 units YOC: 1973 Acquired February 2015 Excellent location and proximity to major arterials Value-add program Long-term financing at 4.29% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 17

18 BELLAIRE RANCH Colorado Springs, CO 240 units YOC: 2003 Acquired April 2015 Premier community in strong Colorado Springs trade area Long-term financing at 4.35% 2016 cash yield to investors projected at 7.5% CAPITAL REAL ESTATE 18

19 AURA AT MIDTOWN Phoenix, AZ 96 units YOC: 1959 Acquired May 2015 Located in trendy infill central Phoenix Proximate to light rail corridor, major arterials and newly opened cafes, restaurants and shops Value-add program Long-term financing at 4.08% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 19

20 SUNSET PEAK Thornton, CO 184 units YOC: 1977 Acquired June 2015 Unique asset with 85% townhome-style living Located proximate to I-25 corridor Long-term financing at 4.60% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 20

21 MONACO SOUTH Denver, CO 220 units YOC: 1971 Acquired July 2015 Great drive-by visibility and convenient access to southeast Denver business parks Value-add program Long-term financing at 4.24% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 21

22 PONDEROSA RANCH Tempe, AZ 272 units YOC: 1983 Acquired September 2015 Located in one of the strongest submarkets in the metro area Long-term financing 4.47% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 22

23 THE SPRINGS AT ALTA MESA Mesa, AZ 200 units YOC: 1999 Acquired September 2015 Located in the heart of Falcon Field Employment Center Long-term financing 4.39% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 23

24 ALTURAS AT BELLAIRE RANCH Colorado Springs, CO 60 units YOC: 2013 Acquired October 2015 Brand new, turn-key Class A asset Long-term financing 4.76% 2016 cash yield to investors projected at 8.0% CAPITAL REAL ESTATE 24

25 OMNIA MCCLINTOCK Tempe, AZ 181 units YOC: 1971 Acquired December 2015 Located in one of the strongest submarkets in the metro area Long-term financing 4.60% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 25

26 PAVILIONS AT ARROWHEAD Phoenix, AZ 248 units YOC: 1997 Acquired February 2016 Located within a 4,200-acre master-planned golf course community. Long-term financing 4.29% 2016 cash yield to investors projected at 7.0% CAPITAL REAL ESTATE 26

27 INVESTMENT CASE STUDY BELLAIRE RANCH APARTMENTS Colorado Springs, Colorado 240 Units Built in 2003 INVESTMENT SUMMARY Date Acquired: June-10 Date Recapitalized: April-15 Purchase Price: $19,000,000 Recapitalization Price: $28,500,000 Price per Unit: $79,167 Price Per Unit: $118,750 NOI at Purchase: $1,137,155 NOI at Recapitalization: $1,560,707 Cap Rate: 5.99% Cap Rate: 5.48% Total Equity Raised: $3,300,000 Total Distributions: $10,462,350 INVESTOR IRR: INVESTOR EQUITY MULTIPLE: 25.96% 3.2x TERM OF HOLD: 5 Years INVESTOR AVERAGE ANNUAL CASH RETURNS: 8.92% CAPITAL REAL ESTATE 27

28 INVESTMENT CASE STUDY HIGHLAND WAY APARTMENTS Northglenn, Colorado 230 Units Built in 1973 INVESTMENT SUMMARY Date Acquired: September-10 Date Recapitalized: March-15 Purchase Price: $10,600,000 Recapitalization Price: $22,050,000 Price per Unit: $46,087 Price Per Unit: $95,870 NOI at Purchase: $786,877 NOI at Recapitalization: $1,345,711 Cap Rate: 7.42% Cap Rate: 6.10% Total Equity Raised: $3,000,000 Total Distributions: $11,988,237 INVESTOR IRR: INVESTOR EQUITY MULTIPLE: 38.98% 4.0x TERM OF HOLD: 4.6 Years INVESTOR AVERAGE ANNUAL CASH RETURNS: 9.00% CAPITAL REAL ESTATE 28

29 INVESTMENT CASE STUDY MONACO SOUTH APARTMENTS Denver, Colorado 216 Units Built in 1971 INVESTMENT SUMMARY Date Acquired: February-12 Date Recapitalized: June-15 Purchase Price: $13,400,000 Recapitalization Price: $19,500,000 Price per Unit: $62,037 Price Per Unit: $90,278 NOI at Purchase: $824,964 NOI at Recapitalization: $1,237,217 Cap Rate: 6.16% Cap Rate: 6.34% Total Equity Raised: $4,509,000 Total Distributions: $9,036,454 INVESTOR IRR: INVESTOR EQUITY MULTIPLE: 26.37% 2.0x TERM OF HOLD: 3.3 Years INVESTOR AVERAGE ANNUAL CASH RETURNS: 8.00% CAPITAL REAL ESTATE 29

30 CAPITAL REAL ESTATE TEAM DAN LEVIN, Managing Director Dan Levin serves as the Managing Director of Capital Real Estate, LLC where his duties include the oversight of community acquisitions, asset management, investor relations, and the corporate obligations associated with the management of CRE. Mr. Levin s 27 years of multifamily experience includes property management, development and acquisition analysis, conversion, and investor relations. Prior to joining CRE Mr. Levin held the position of President of Koelbel Property Management for five years. During his tenure Mr. Levin s responsibilities included the direct management of a $500 million portfolio comprised of over 3,200 multifamily units located in the Denver metropolitan area. The portfolio was comprised of properties in which Mr. Levin represented the principalowner, third party owners and homeowner associations. His duties included the oversight of on-site management teams, financial analysis of operations, budgeting, marketing, acquisition analysis, and client relations. Prior to joining Koelbel, Mr. Levin served for 15 years as the Vice President of The Feld Company, a multifamily developer in the Denver area. His responsibilities included the oversight of the management division, development and operations analysis, marketing, budgeting, financial reporting, and client relations. The company developed over 3,400 units in the metro Denver area, including the prestigious Palomino Park Resort and The Breakers Resort. In addition to managing the development portfolio, Mr. Levin had oversight responsibilities over additional third party management and oversaw the conversion of Silver Mesa at Palomino Park, a 264 unit townhome project from its inception in 2001 to During this process he served as Broker for the principal and managed the sales and marketing teams, and served as the President of the homeowner association. CRE professionals have been involved in the acquisition, disposition or brokerage of over $5.0 billion in multifamily properties. In addition to Feld and Koelbel, Mr. Levin s clients have included Wellsford Real Properties, Invesco, Heitman, MIG, GE, Bascom Group, and TIAA- CREF. Mr. Levin received a law degree and an MBA from the University of Denver. He has served on the executive committees of the Colorado Apartment Association and the Apartment Association of Metro Denver where he was active in legislative issues. CAPITAL REAL ESTATE 30

31 CAPITAL REAL ESTATE TEAM JASON WINE, Director of Acquisitions Jason Wine serves Capital Real Estate as Director of Acquisitions. In this capacity he is responsible for asset acquisitions, market underwriting, transaction / due diligence management and business development. His 21-year multifamily career has given him extensive experience and a broad perspective including property management, development, investment and multifamily brokerage. Mr. Wine came to CRE after serving as Associate Broker with an institutional sales team on a national brokerage platform. In this capacity Mr. Wine worked on a broad range of apartment sale transactions including institutional income, value-add, development equity raises, construction project / pre-lease sales, HUD and/or bond financing, broken condo deals, GP buy outs and ownership entity transfers. Total deal volume during this 7 year period was approximately $2.5 billion in investment sales and transaction management. Jason graduated from the University of Colorado with a Bachelor s Degree in Economics and in 2006 received a Master s of Science from Denver University s Real Estate and Construction Management program. Jason is a licensed Colorado Real Estate Broker and a fourth generation Colorado Native. CAPITAL REAL ESTATE 31

32 CAPITAL REAL ESTATE TEAM PATRICK MACALIK, Vice President of Asset Management Patrick Macalik serves as Capital Real Estate, LLC s Vice President of Asset Management. He works closely with CRE s property management companies, identifying opportunities to achieve maximum financial returns for each asset. Patrick s 14 years of experience gives him keen insight into market trends and operational strategies on a diverse range of asset types. His abilities to train and develop teams, his viable financial acumen, and his innovative marketing strategies have served him well in operational capacities. These strengths give him a distinct edge in the Denver market and make him a valuable addition to the CRE team. Prior to joining CRE Patrick managed properties for Carmel, Alliance Residential, Echelon Property Group, Zocalo, The Pauls Corporation, and AIMCO. While at Echelon Patrick achieved one of his most notable successes. He completed a $2 million renovation and repositioning of a 280-unit community in Denver. This community was recognized at the Apartment Association of Metro Denver s Tribute Awards, winning the award for Most Outstanding Renovated Property in Patrick studied mechanical engineering and landscape architecture at Colorado State University and is an active member of the Apartment Association of Metro Denver. CAPITAL REAL ESTATE 32

33 CAPITAL REAL ESTATE TEAM KATIE VANDERVEEN, Vice President of Asset Management Katie Vanderveen joined Capital Real Estate, LLC as Vice President of Asset Management in the beginning of She brings to the role 15 years of diverse experience in property management including onsite management, multi-site management, renovations at value-add properties, condo conversions, acquisitions and due diligence, client relations, home owners association management and property accounting. She has a proven record of building strong onsite management teams and creating operational efficiencies. Prior to joining CRE, Katie was a Regional Manager for Laramar Group overseeing a portfolio of units in the Denver market. Her other roles with Laramar included Property Accountant and Yardi Specialist and Trainer. She started her career on-site in 2001 and has managed properties for Windsor Communities and East West Urban Management with experience in the Denver, Chicago and Houston markets. Katie holds a Bachelor of Business Administration in Finance from Grand Valley State University in Allendale, Michigan. CAPITAL REAL ESTATE 33

34 CAPITAL REAL ESTATE TEAM DOUG ANDREWS, Principal Doug Andrews has worked in commercial real estate in Colorado since 1983 and has specialized in apartments and multifamily land since In the last ten years, with his partner Jeff Hawks, he has closed more than $7.4 billion in multifamily transactions, representing a list of clients that includes JPI, Equity Residential Properties Trust, AMLI Residential Trust, Blackrock, The Carmel Companies, Embrey Partners, The Morgan Group, Archstone/Smith, TIAA/CREF, Wellsford Real Properties, First Pacific, Rocky Mountain Mutual Housing, Griffis Blessing, Waterton Associates LLC, Pauls Corporation, Baron Properties, CAN Insurance, Sentinel Real Estate, Lincoln Property Company, Columbia Savings, John Hancock, Henderson Global Investors, Prudential Real Estate Investors, Goldman Sachs, RREEF, Allied Realty Services, PaineWebber Properties, Principal Insurance and Simpson Housing. Mr. Andrews has been a member of the portfolio disposition teams for Balcor/American Express ($600 million), Archstone Communities ($650 million), Mitsui Real Estate ($225 million), and Jupiter Realty Corp. ($65.5 million). In 2005, Doug co-founded Capital Real Estate. He is also a partner in ARA Newmark s Denver office. ARA Newmark is a full-service investment advisory brokerage firm that focuses exclusively on the multifamily industry. He was honored as the Denver Realtor s Investment Broker of the Year in 2000 and has been the #1 multi-housing specialist in Denver for 20 of the last 21 years. Jeff and Doug have sold more Colorado apartments than any other broker in Colorado s history. Prior to 1991, Mr. Andrews was president of Andrews & Company, a family held commercial real estate investment and development firm with more than $30 million in assets, including apartments, office and retail properties. Mr. Andrews is a native of Denver and a graduate of The Colorado College in Colorado Springs. He is a past president of the Rotary Club of Denver Southeast, currently serves as a director on the board of the Colorado I Have A Dream Foundation and has served as president of Apartment Realty Advisors, Inc. CAPITAL REAL ESTATE 34

35 CAPITAL REAL ESTATE TEAM JEFF HAWKS, Principal Jeff Hawks is a 42-year veteran of the real estate business, specializing in apartments for the last 30+ years. In the last ten years he sold in excess of $7.4 billion in Colorado apartment properties. In 2005, Jeff co-founded Capital Real Estate. He is also a partner in ARA Newmark s Denver office. Jeff, with his partner Doug Andrews, was selected as Denver s top commercial real estate broker by the Denver Board of Realtors. He has been the top apartment broker in Colorado, along with his partner for the last 21 years. Jeff and Doug have sold more Colorado apartments than any other broker in Denver s history. Mr. Hawks is a member of the Apartment Association of Metro Denver, and the National Multi-Housing Council. He is a frequent speaker, writer and educator on the apartment market and investment strategies in the multifamily sector. Jeff has been a speaker or writer for many companies and associations, such as: National Apartment Association (NAA); Tenants in Common Association (TICA); the Multi Housing Executive Magazine; Real Estate Media; University of Denver; Apartment Association of Metro Denver; University of Colorado, MP/F Research; Trammel Crow Market Watch; Colorado Real Estate Journal; NAIOP; Appraisal Institute of Colorado; Multi-Housing World; and Units magazine. Jeff is on the board of the Arapahoe House Foundation, a non-profit drug and alcohol counseling organization. Jeff and his wife of 39 years have three adult sons. CAPITAL REAL ESTATE 35

36 CAPITAL REAL ESTATE TEAM KADRA KNUDSON, Vice President of Accounting Kadra Knudson brings over 26 years of accounting experience in the fields of development, construction, architecture, landscape architecture, property management, and asset management to Capital Real Estate, LLC. Her breadth of experience makes her a valuable team member for CRE s corporate accounting and as the liaison with the property management companies. She is involved with acquisitions, financing, investor relations and with CRE s CPAs. The majority of Kadra s work experience came from her 15 years as the Controller for The Feld Company, a Denver real estate development company which built and managed many premier apartment communities in Denver. She helped the company grow to over 3,400 developed units including The Breakers Resort and Palomino Park Resort as well as various third-party management properties. Partners and clients included Allied Signal, Koelbel and Company, TIAA-CREF, US Air, and Wellsford Real Properties. In the last three years of her tenure at Feld, she worked as a sales associate for the condominium conversion of one of the company communities. Prior to joining Capital Real Estate in February of 2010, Kadra spent six years as an accounting consultant for landscape architecture and architecture firms involved in their commercial, single-family, and multi-family businesses. Kadra has a Bachelor of Science with a double major in finance and marketing from the University of Denver. CAPITAL REAL ESTATE 36

37 CAPITAL REAL ESTATE TEAM JEFF CARVER, Controller Jeff Carver joined Capital Real Estate, LLC as Controller in early He works closely with the CRE management team to ensure the timely and accurate completion of all accounting processes and functions related to CRE s multifamily property portfolio. Jeff maintains oversight of both the corporate and property level accounting, and he serves as a key contact for the company s investor relations. Jeff brings over eight years of accounting experience in commercial real estate to CRE s team. Prior to joining CRE, Jeff served as Controller for four years at Johnson Capital Group, Inc., a national commercial mortgage real estate firm. During his time with Johnson Capital, Jeff was responsible for managing and performing the corporate accounting for the firm s nationwide offices and affiliated companies. Before his appointment as Controller, Jeff gained valuable experience as a Senior Accountant with the firm. Preceding his time at Johnson Capital in 2006, Jeff worked in the budget office for the University of Colorado at Boulder School of Arts & Sciences serving as a Financial Service Center Supervisor. Jeff graduated from the University of Colorado at Boulder with a Bachelor of Science in Business Administration. CAPITAL REAL ESTATE 37

38 CAPITAL REAL ESTATE TEAM team. ELYSE WIECKNICKI, Asset Management Accountant Elyse Wiechnicki joined Capital Real Estate at the beginning of 2015 and serves as the Asset Management Accountant. She s involved in all aspects of the corporate-level accounting including acquisitions, refinances, dispositions, investor relations, financial statement preparation, and yearend duties. In addition she works with CRE s property management companies on global accounting issues including review of property financial statements. Elyse s energy and adaptability make her a great asset to the CRE Elyse brings over six years of experience in real estate. She worked for three years at Prior & Associates where she started as a Research Assistant, which included the company accounting. She was then promoted to a Real Estate Market Analyst where she traveled nationally to gather data and perform market feasibility studies for apartment projects that were funded through the Low Income Housing Tax Credit Project. Prior to joining CRE, Elyse worked for Apartment Realty Advisors, as a Research Analyst. There she gained experience in multifamily brokerage, research, and in-depth analyses. Elyse holds a Bachelor of Arts in Psychology from Bates College in Lewiston, Maine. CAPITAL REAL ESTATE 38

39 CAPITAL REAL ESTATE TEAM SAMANTHA MARTIN, Accounting Assistant Samantha is the Accounting Assistant for Capital Real Estate and joined the company in early She supports the Accounting team with maintaining a variety of administrative and accounting tasks including investor documentation, A/P, banking tasks, and file organization. She worked for four years as an intern for the Chicago Federation of Labor, before being promoted to Program Specialist, where she assisted her team with organizing workshops and events for job seekers. Before starting at CRE she worked as an Operations Associate for Advance Group, which is part of a multi-sector group of staffing agencies. It was there that she assisted her team with rebuilding processes, testing new programs, building reports, as well as organizing events for the company. Samantha graduated from Eastern Illinois University with a Bachelor of Arts in Sociology. CAPITAL REAL ESTATE 39

40 CAPITAL REAL ESTATE 1800 Larimer Street, Suite 1700 Denver, Colorado Telephone: (303) Fax: (720) Web site: