Management Joe Drabkin is President and co-founder of Paradigm Real Estate Group, which offers triple net commercial real estate investments, asset and property management, brokerage and development projects in the U.S. Our clients range from international high net worth individuals, U.S. high net worth individuals and institutional investors as well as family offices and sovereign funds. Joseph Drabkin President & CEO Mr. Drabkin has more than 30 years of industry experience in commercial real estate acquisition, development, strategic planning, management, sales, and leasing. Paradigm Real Estate Group is comprised of four separate operating companies: Paradigm Real Estate Development Group LLC, Paradigm NNN Real Estate Group, LLC, Paradigm Real Estate Operations Group, LLC and Drabkin Asset Management Group LLC Prior to starting Paradigm, Mr. Drabkin was Vice President and Managing Director for the Stiles Corporation. He opened the Miami office and was responsible for the company s third party brokerage services, ranging from leasing to syndication and executing development deals. Before working with Stiles, Mr. Drabkin was Vice President & Managing Director at Adler Realty Services. He was responsible for developing new business and servicing nine million square feet of commercial property. Paradigm Development Paradigm Development Real Estate Group has earned its reputation as experts in the industry. Current projects include a 59-Story tower one block from Brickell City Centre; as well as over 600 multifamily units within Miami-Dade. Paradigm real estate Development has recently signed a contract with Heritage Hospitality Group to build 70-100 new Limited Service flagged hotels over the next 5 years. Paradigm has 12 projects approved and shovel-ready in the expansion pipeline. Our collective experience totals over 6,000 multifamily units over two decades of ground-up development on the east coast. We are currently working on future multifamily projects in Miami-Dade totaling over 1,000 units that are in various stages of assemblage, entitlement and permitting. Our focus is on Multifamily & Hospitality solely. We are seeking equity investment partners to complete these projects Paradigm Development 21
Table of Contents Management 1 Services 3 The Edge on Brickell 4 Key Biscayne Residential 11 82nd & Biscayne 17 NW 7th Street 23 NW 13th St & NW 7th Ave 29 NE 135th Street 35 Development Schedule 42 Safe Harbour 44 Joe Drabkin President & CEO Paradigm Real Estate Group 5201 Blue Lagoon Drive, Suite 200 Miami, Florida 33126 joe@paradigmregp.com + 1 786 518 0841 www.paradigmregp.com Paradigm Development 2
Services Development Property Management Paradigm Real Estate Group has an unwavering commitment and passion for developing high quality, uniquely designed commercial and residential buildings. We strategically position assets in the most diverse markets, through the most challenging market conditions. We employ the highest industry standards in all of our processes to ensure regulatory compliance, consistency and service excellence. Asset Management We assess the performance of each individual property as well as your overall portfolio to develop a wealth plan which includes to recommend the sale, exchange, or repositioning of your real estate assets, and advise on capital improvements. Advisory & Brokerage The real estate requirements of today's businesses are increasingly complex, and they increasingly impact a companies' strategic decisions and bottom line. We provide a complete spectrum of commercial real estate advisory and transaction services. Paradigm Development 23
The Edge THE EDGE ON BRICKELL Project Type: Hotel, Residential & Marina Architect: Kobe Karp Description: Conveniently located within walking distance from Brickell City Center, The Edge will stand out for it s shape and international prestige. This architectural and engineering challenge will test your visual perception when the 40-foot wide 57-story tower rises over 630 ft high. Program: 57-story tower with 70 residential and 198 hotel keys. 4 boat slips with boardwalk. 1 restaurant at the rooftop and mezzanine level. 1 spa and interior pool with hotel full-service. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The information contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Paradigm Development 24
The Edge Paradigm Development 25
The Edge Land Purchase Costs Land Purchase 45,000,000 Aquistion Period 0 months Jan-18 Construction Assumptions Project Start Date Jan-18 Preconstruction Ends Jan-18 Construction Month - Start 12 months Jan-19 48 Construction Period (Months) 36 months Jan-22 Disposition of Asset 24 months Jan-24 Residential Pre-sales Start 24 months Jan-20 Residentail Pre-sales End 24 months Jan-22 Hotel Begin Operating Jan-25 Construction Loan Assumptions Construction LTC 100.00% 184,177,148 Construction Loan Interest Rate 10.00% Closing & Finance Costs 1.00% Repayment Month after Completion - Permanent Financing Assumptions Hold Period 24 months Jan-24 Interest Rate of Permanent Financing 5.00% Permanen Financing Periods 10 Years Jan-22 Paradigm Development 26
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Key Biscayne Residential RESIDENTIAL WATERFRONT DEVELOPMENT 2 Project Type: Residential and Marina Description: Last undeveloped land facing the Biscayne Bay. Premium location for its waterfront view, access to schools and religious community. Perfect location to raise a family with access to a marina within a few steps from home. Program: 4-story building with 66 residential units. 14 boat slips with boardwalk. 34 one-bedroom, 27 two-bedroom and 5 three-bedroom units. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The information contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Rendering use approved by 33intracoastal for marketing purposes on 02/26/18 Paradigm Development 211
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82nd and Biscayne SHULI S MIXED-USE DEVELOPMENT Project Type: Residential, Office and Retail Description: Mixed-use development where people can live, work and play. Located on a metropolitan dense area, Shuli s is conveniently and efficiently designed to maximize Program: 2 towers with 600 units. 10,000sqft of retail space and 60,000sqft of office space. The total building area is 563,965 sqft. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The information contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Paradigm Development 217
82nd and Biscayne Sources of Funds Partner Equity 35.00% 49,637,828 Construction LTC 65.00% 92,184,537 Total 100.00% 141,822,364 Uses of Funds Uses Costs $/NSF Acquisition & Land Costs Land Cost 21,200,000 34.04 Total Acquisition Costs 21,200,000 34.04 Construction Costs Building Construction 104,460,698 167.72 General Contractor Fee 0 0.00 Total Project Costs 104,460,698 167.72 Soft Costs Taxes & Insurance 509,167 0.82 Architecture & Engineering 2,875,000 4.62 Legal/Closing/Accounting 509,167 0.82 Development Fee 5,419,167 8.70 Builders Risk & General Insurance 1,029,167 1.65 General & Administrative 520,000 0.83 Marketing 450,000 0.72 Financing Fee 1,040,000 1.67 Consultants/Appraiers 520,000 0.83 Contingency 2,090,000 3.36 Amenity Area/ Model Unit FF&E 160,000 0.26 Impact Fees/Permits 1,040,000 1.67 Total Soft Costs 16,161,667 25.95 TOTAL CAPITALIZATION 141,822,364 227.70 % of Total Capitalization Lease Up (Income)/Loss (14,552,824) (23.37) TOTAL DEVELOPMENT COST 127,269,540 204.34 Deferred Costs Construction Loan 13,859,257 22.25 Deferred Mezzanine Interest 0 0.00 Permanent Loan Interest 2,630,284 4.22 Comissions on Sale 10,766,764 Leasing Commissions 0 0.00 Total Deferred Costs 27,256,305 43.76 TOTAL PROJECT COST 154,525,845 248.10 Paradigm Development 218
82nd and Biscayne PROFITABILITY Asset Disposition 215,335,286 346 Less: Total Project Cost (154,525,845) (248) NET PROFIT 60,809,441 98 Stabalized Rent PSF 2.40 NOI to Cost 8.44% Leveraged IRR 20.86% Combined NOI 11,969,691 Return on Cost 139.35% Shuli's Income Assumptions UNIT MIX Stabalized Monthly Market Monthly Stabalized Rent Avg Unit Base Rent / Monthly Market # of Units % of Mix Total SF SF Month Rent PSF Unit Type Rent / Unit PSF Studios 51 8.5% 440 22,440 $ 925 2.10 $1,011 2.30 1 Bedroom Units 357 59.5% 600 214,200 $ 1,300 2.17 $1,421 2.37 2 Bedroom Units 178 29.7% 1,050 186,900 $ 2,320 2.21 $2,535 2.41 3 Bedroom Units 14 2.3% 1,250 17,500 $ 3,100 2.48 $3,387 2.71 Total / Weighted Avg 600 100.0% 735 441,040 $1,613 $2.18 $1,762 2.40 Unit Type # of Units % of Mix Avg Unit SF UNIT MIX Total SF Annual Triple Net Rent Annual CAM Reimb. Total Monthly Payment PSF Monthly Market Rent PSF Retail 1 14.3% 10,000 10,000 $ 35.0 $ 7.5 $42.5 3.54 Office 1 85.7% 60,000 60,000 $ 35.0 $ 1.1 $36 2.92 Total / Weighted Avg 2 100.0% 52,857 70,000 $35 $2 $37 3.01 OTHER INCOME Item # of Units % of Units $ / Unit / Month Total Monthly Amount Total Annual Amount Annual % of Other Income Garage Inco 200 33.3% $75 $15,000 $180,000 16.1% Water/ Sew 600 100.0% $45 $27,000 $324,000 29.0% Other Incom 600 100.0% $85 $51,000 $612,000 54.8% Total $93,000 $1,116,000 100.0% Paradigm Development 219
82nd and Biscayne Shuli's Proforma Operating Statement Income Total Unit Sq. Ft. % of Rev Annual Base Rental 12,688,331 21,147 28.77 96.75% Garage Income 180,000 300 0.41 1.37% Utility Collections 324,000 540 0.73 2.47% Other Residential Income 612,000 1,020 1.39 4.67% Vacancy and Collection Loss: (690,217) (1,150) (1.56) -5.26% Total Income 13,114,114 21,857 29.73 100.00% Operating Expenses Real Estate Tax 720,000 1,200 1.63 5.49% Insurance 360,000 600 0.82 2.75% Repairs and Maintenance 117,000 195 0.27 0.89% Redecorating and Turnover 138,000 230 0.31 1.05% Payroll & Benefits 600,000 1,000 1.36 4.58% General and Administrative 138,000 230 0.31 1.05% Marketing, Advertising, Referral 165,000 275 0.37 1.26% Contract Services 600,000 1,000 1.36 4.58% Utilities 438,000 730 0.99 3.34% Management Fee 3% 393,423 418 0.89 3.00% Total Operating Expenses 3,669,423 5,878 8.32 27.98% Net Operating Income 9,444,691 15,979 21.41 72.02% Replacement Reserve 180,000 300 0.20 1.37% Shuli's Retail/ Office Proforma Operating Statement REVENUE Total Sq. Ft. Base Rent $ 2,525,000 $ 36.07 CAM Reimbursements $ 75,750 $ 1.08 Vacancy (Rent and Reimb.) $ - TOTAL REVENUES $ 2,600,750 $ 37.15 Operating Expenses Real Estate Taxes $ - $ - Repairs & Maintenance $ - $ - Contract Services $ - $ - Maintenance Payroll $ - $ - Administrative Payroll $ - $ - Utilities $ - $ - General and Administrative $ - $ - Insurance $ - $ - Management Fee 3% $ 75,750 $ 1.08 Total Operating Expenses $ 75,750 $ 1.08 Net Operating Income $ 2,525,000 $ 36.07 Paradigm Development 20
82nd and Biscayne Shuli's Annual Cash Flow Totals Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Revenue Growth 3.00% 3.00% 3.00% 3.00% 3.00% Expense Growth 3.00% 3.00% 3.00% 3.00% 3.00% Rental Income 16,071,886 - - - 4,123,707 10,943,685 1,004,493 Retail Income 3,198,333 - - - 820,625 2,177,813 199,896 Other Income 1,413,600 - - - 362,700 962,550 88,350 Potential Gross Income 20,683,819 - - - 5,307,032 14,084,048 1,292,739 Operating Expenses (6,130,995) - - - (2,155,786) (3,669,423) (305,785) Residential Net Income 14,552,824 - - - 3,151,246 10,414,624 986,953 Reserves for Replacement (375,000) - - - (180,000) (180,000) (15,000) Net Operating Cash Flow 14,177,824 - - - 2,971,246 10,234,624 971,953 Adjusted NOI (Exc Reserve) 14,552,824 - - - 3,151,246 10,414,624 986,953 Asset Disposition 215,335,286 - - - - - 215,335,286 Brokerage Fee on Sale (10,766,764) - - - - - (10,766,764) Total Net Residential Revenues 219,121,346 - - - 3,151,246 10,414,624 205,555,475 Less: Development Cost (excl. Interest) Land 21,200,000 21,200,000 - - - - - Hard 104,460,698-52,230,349 52,230,349 - - - Soft 16,161,667 1,305,000 7,406,667 7,450,000 - - - Total 141,822,364 22,505,000 59,637,016 59,680,349 - - - Net Cash Flow Before Interest 77,298,981 (22,505,000) (59,637,016) (59,680,349) 3,151,246 10,414,624 205,555,475 Permanent Loan Loan Draws (105,530,120) - - - - (105,530,120) - Interest Paid (2,630,284) - - - - (1,755,657) (874,627) Principal Paid 0 - - - - - - Total Payment 108,160,404 - - - - 2,266,034 105,894,370 Ending Balance After Permanent 74,668,697 (22,505,000) (59,637,016) (59,680,349) 3,151,246 113,678,711 99,661,105 Construction Loan Draws (92,184,537) - (32,504,188) (59,680,349) - - - Interest Due (13,859,257) - (444,243) (3,600,850) (5,773,778) (4,040,386) - Repayments from Cash Flow or Sale 106,043,794 - - - - 106,043,794 - Ending Balance After Construction Lo 60,809,441 (22,505,000) (27,132,828) - 3,151,246 7,634,917 99,661,105 Equity Funding (49,637,828) (22,505,000) (27,132,828) - - - - Repayments from Cash Flow 0 - - - - - - Ending Balance 110,447,268 - - - 3,151,246 7,634,917 99,661,105 Paradigm Development 21
82nd and Biscayne Structure Total Return Equity Invested Capital 49,637,828 Percent of Equity 100% Equity Net Profit 60,809,441 Equity Multiple of Capital 2.23x IRR 20.86% Total Return 110,447,268 SENSITIIVITY TABLES Project IRR Exit Cap Rate Rent Per Square Foot 13.8% 2.34 2.37 2.40 2.43 2.46 2.49 5.00% 16.0% 16.4% 16.8% 17.3% 17.7% 18.1% 5.25% 14.4% 14.9% 15.3% 15.7% 16.2% 16.6% 5.50% 13.0% 13.4% 13.9% 14.3% 14.7% 15.1% 5.75% 11.6% 12.1% 12.5% 12.9% 13.3% 13.7% 6.00% 10.3% 10.8% 11.2% 11.6% 12.0% 12.4% 6.25% 9.1% 9.5% 10.0% 10.4% 10.8% 11.2% Project Equity Multiple Exit Cap Rate: Rent Per Square Foot 2.23x 2.34 2.37 2.40 2.43 2.46 2.49x 5.00% 2.52x 2.58x 2.64x 2.70x 2.77x 2.83x 5.25% 2.31x 2.37x 2.43x 2.49x 2.54x 2.60x 5.50% 2.12x 2.17x 2.23x 2.29x 2.34x 2.40x 5.75% 1.94x 2.00x 2.05x 2.10x 2.16x 2.21x 6.00% 1.78x 1.83x 1.89x 1.94x 1.99x 2.04x 0.06x 1.63x 1.68x 1.73x 1.79x 1.84x 1.89x Project Equiy Return Exit Cap Rate Rent Per Square Foot 20.9% 2.34 2.37 2.40 2.43 2.46 2.49 5.00% 24.3% 25.0% 25.7% 26.3% 27.0% 27.6% 5.25% 21.9% 22.6% 23.3% 24.0% 24.6% 25.3% 5.50% 19.5% 20.2% 20.9% 21.6% 22.3% 23.0% 5.75% 17.1% 17.9% 18.6% 19.3% 20.1% 20.7% 6.00% 14.8% 15.6% 16.4% 17.1% 17.8% 18.5% 6.25% 12.6% 13.4% 14.1% 14.9% 15.7% 16.4% Paradigm Development 22
NW 7th St. Edmonson Center Commercial and Residential Project Type: Mixed-Use. Residential and Commercial Description: Edmonson Center is a mixed use commercial and residential project that will be a catalyst for neighborhood restoration and serve as an icon in the heart of Miami s historic Overtown district. The Project will feature 600 residential rental apartments, consisting of affordable housing to satisfy pent-up demand in the Overtown community, plus workforce and market rate housing. Program: 2 towers with 600 units. 10,000sqft of retail space and 60,000sqft of office space. The total building area is 563,965 sqft. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The inforation contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Paradigm Development 23
NW 7th St. Sources of Funds Partner Equity 35.00% 48,942,828 Construction LTC 65.00% 90,893,823 Total 100.00% 139,836,651 Uses of Funds Uses Costs $/NSF Acquisition & Land Costs Land Cost 21,200,000 29.51 Total Acquisition Costs 21,200,000 29.51 Construction Costs Building Construction 102,729,151 143.02 General Contractor Fee 0 0.00 Total Project Costs 102,729,151 143.02 Soft Costs Taxes & Insurance 499,375 0.70 Architecture & Engineering 2,820,000 3.93 Legal/Closing/Accounting 499,375 0.70 Development Fee 5,339,375 7.43 Builders Risk & General Insurance 1,019,375 1.42 General & Administrative 510,000 0.71 Marketing 450,000 0.63 Financing Fee 1,030,000 1.43 Consultants/Appraiers 510,000 0.71 Contingency 2,050,000 2.85 Amenity Area/ Model Unit FF&E 150,000 0.21 Impact Fees/Permits 1,030,000 1.43 Total Soft Costs 15,907,500 22.15 TOTAL CAPITALIZATION 139,836,651 194.68 % of Total Capitalization Lease Up (Income)/Loss (15,634,369) (21.77) TOTAL DEVELOPMENT COST 124,202,282 172.91 Deferred Costs Construction Loan 13,676,934 19.04 Deferred Mezzanine Interest 0 0.00 Permanent Loan Interest 2,593,747 3.61 Comissions on Sale 11,510,000 Leasing Commissions 0 0.00 Total Deferred Costs 27,780,681 38.68 TOTAL PROJECT COST 151,982,963 211.59 Paradigm Development 24
NW 7th St. PROFITABILITY Asset Disposition 230,200,004 320 Less: Total Project Cost (151,982,963) (212) NET PROFIT 78,217,041 109 Stabalized Rent PSF 2.53 NOI to Cost 9.14% Leveraged IRR 25.19% Combined NOI 12,787,250 Return on Cost 151.46% Shuli's Income Assumptions UNIT MIX Stabalized Monthly Market Monthly Stabalized Rent Avg Unit Base Rent / Monthly Market # of Units % of Mix Total SF SF Month Rent PSF Unit Type Rent / Unit PSF Studios 51 8.5% 440 22,440 $ 950 2.16 $1,038 2.36 1 Bedroom Units 357 59.5% 600 214,200 $ 1,450 2.42 $1,584 2.64 2 Bedroom Units 178 29.7% 1,050 186,900 $ 2,320 2.21 $2,535 2.41 3 Bedroom Units 14 2.3% 1,250 17,500 $ 3,100 2.48 $3,387 2.71 Total / Weighted Avg 600 100.0% 735 441,040 $1,704 $2.33 $1,862 2.53 Unit Type # of Units % of Mix Avg Unit SF UNIT MIX Total SF Annual Triple Net Rent Annual CAM Reimb. Total Monthly Payment PSF Monthly Market Rent PSF Retail 1 14.3% 10,000 10,000 $ 35.0 $ 7.5 $42.5 3.54 Office 1 85.7% 60,000 60,000 $ 35.0 $ 1.1 $36 2.92 Total / Weighted Avg 2 100.0% 52,857 70,000 $35 $2 $37 3.01 OTHER INCOME Item # of Units % of Units $ / Unit / Month Total Monthly Amount Total Annual Amount Annual % of Other Income Garage Inco 387 64.5% $75 $29,025 $348,300 27.1% Water/ Sew 600 100.0% $45 $27,000 $324,000 25.2% Other Incom 600 100.0% $85 $51,000 $612,000 47.7% Total $107,025 $1,284,300 100.0% Paradigm Development 25
NW 7th St. Land Purchase Costs Land Purchase 21,200,000 Aquistion Period 5 months Jun-18 Construction Assumptions Project Start Date Jan-18 Preconstruction Ends Jun-18 Construction Month - Start 12 months Jan-19 36 Construction Period (Months) 24 months Jan-21 Disposition of Asset 24 months Jan-23 Residential Pre-sales Start 0 months Jan-18 Residentail Pre-sales End 0 months Jan-18 Hotel Begin Operating Jan-23 Construction Loan Assumptions Construction LTC 65.00% 90,893,823 Construction Loan Interest Rate 6.00% Closing & Finance Costs 1.00% Repayment Month after Completion 20 Permanent Financing Assumptions Permanen Financing Begins Sep-22 Hold Period 24 months Jan-23 Interest Rate of Permanent Financing 5.00% Permanen Financing Periods 30 Years Sep-22 Project Characteristics Number of Residential Units 600 Residential RSF per Unit 735 SF Residential RSF 441,040 SF Gross Residential SF 512,837 SF Retail/Office SF 70,000 SF Residential Ratio 71.40% Residential Efficiency Ratio 14.00% Total Building Area 718,287 Lease-Up & Operations Assumptions Initial Vacancy Rate Residential 95.00% $ 30.40 psf/year Year 1 Rent 2.53 $ 1,862.12 psf/year Other Income Per Month 107,025 $178.38 Operating Expenses Residential (as a $ PSF) $0.70 $ 513 /unit/mnth CapEx Reserves $ 300 per unit/year Lease-Up Period 18 months Jul-22 Residential Vacancy Rate 5.00% Residential Commision on Sale 6.00% Retail/Office Vacancy Rate 0.00% Retail/Office Commissions 3.00% Retail/Office Lease Term 10 Retail Annual Rent Per SF $35 Retail and Office CAM $2 Terminal Cap Rate (Hotel) 5.50% Commission on Sale 5.00% Paradigm Development 26
NW 7th St. Shuli's Annual Cash Flow Totals Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Revenue Growth 3.00% 3.00% 3.00% 3.00% 3.00% Expense Growth 3.00% 3.00% 3.00% 3.00% 3.00% Rental Income 16,982,499 - - - 4,357,352 11,563,741 1,061,406 Retail Income 3,198,333 - - - 820,625 2,177,813 199,896 Other Income 1,626,780 - - - 417,398 1,107,709 101,674 Potential Gross Income 21,807,612 - - - 5,595,374 14,849,262 1,362,976 Operating Expenses (6,173,243) - - - (2,170,641) (3,694,709) (307,892) Residential Net Income 15,634,369 - - - 3,424,733 11,154,553 1,055,083 Reserves for Replacement (375,000) - - - (180,000) (180,000) (15,000) Net Operating Cash Flow 15,259,369 - - - 3,244,733 10,974,553 1,040,083 Adjusted NOI (Exc Reserve) 15,634,369 - - - 3,424,733 11,154,553 1,055,083 Asset Disposition 230,200,004 - - - - - 230,200,004 Brokerage Fee on Sale (11,510,000) - - - - - (11,510,000) Total Net Residential Revenues 234,324,373 - - - 3,424,733 11,154,553 219,745,087 Less: Development Cost (excl. Interest) Land 21,200,000 21,200,000 - - - - - Hard 102,729,151-51,364,576 51,364,576 - - - Soft 15,907,500 1,280,000 7,292,500 7,335,000 - - - Total 139,836,651 22,480,000 58,657,076 58,699,576 - - - Net Cash Flow Before Interest 94,487,722 (22,480,000) (58,657,076) (58,699,576) 3,424,733 11,154,553 219,745,087 Permanent Loan Loan Draws (104,064,219) - - - - (104,064,219) - Interest Paid (2,593,747) - - - - (1,731,269) (862,478) Principal Paid 0 - - - - - - Total Payment 106,657,966 - - - - 2,234,557 104,423,409 Ending Balance After Permanent 91,893,975 (22,480,000) (58,657,076) (58,699,576) 3,424,733 112,984,216 115,321,678 Construction Loan Draws (90,893,823) - (32,194,248) (58,699,576) - - - Interest Due (13,676,934) - (443,571) (3,555,525) (5,693,575) (3,984,262) - Repayments from Cash Flow or Sale 104,570,757 - - - - 104,570,757 - Ending Balance After Construction Lo 78,217,041 (22,480,000) (26,462,828) - 3,424,733 8,413,459 115,321,678 Equity Funding (48,942,828) (22,480,000) (26,462,828) - - - - Repayments from Cash Flow 0 - - - - - - Ending Balance 127,159,869 - - - 3,424,733 8,413,459 115,321,678 Paradigm Development 27
NW 7th St. Structure Total Return Equity Invested Capital 48,942,828 Percent of Equity 100% Equity Net Profit 78,217,041 Equity Multiple of Capital 2.6x IRR 25.19% Total Return 127,159,869 SENSITIIVITY TABLES Project IRR Exit Cap Rate Rent Per Square Foot 16.5% 2.47 2.50 2.53 2.56 2.59 2.62 5.00% 18.7% 19.1% 19.5% 19.9% 20.3% 20.7% 5.25% 17.1% 17.5% 18.0% 18.4% 18.8% 19.2% 5.50% 15.7% 16.1% 16.5% 16.9% 17.3% 17.7% 5.75% 14.3% 14.7% 15.1% 15.5% 15.9% 16.3% 6.00% 13.0% 13.4% 13.8% 14.2% 14.6% 15.0% 6.25% 11.7% 12.1% 12.5% 12.9% 13.3% 13.7% Project Equity Multiple Exit Cap Rate: Rent Per Square Foot 2.60x 2.47 2.50 2.53 2.56 2.59 2.62x 5.00% 2.91x 2.98x 3.04x 3.10x 3.16x 3.23x 5.25% 2.68x 2.74x 2.80x 2.86x 2.92x 2.98x 5.50% 2.48x 2.53x 2.59x 2.65x 2.71x 2.76x 5.75% 2.29x 2.34x 2.40x 2.45x 2.51x 2.56x 6.00% 2.11x 2.17x 2.22x 2.27x 2.33x 2.38x 0.06x 1.95x 2.01x 2.06x 2.11x 2.16x 2.21x Project Equiy Return Exit Cap Rate Rent Per Square Foot 25.2% 2.47 2.50 2.53 2.56 2.59 2.62 5.00% 28.4% 29.1% 29.7% 30.3% 30.9% 31.4% 5.25% 26.1% 26.7% 27.4% 28.0% 28.6% 29.2% 5.50% 23.8% 24.5% 25.1% 25.7% 26.4% 27.0% 5.75% 21.6% 22.3% 22.9% 23.6% 24.2% 24.8% 6.00% 19.5% 20.1% 20.8% 21.5% 22.1% 22.7% 6.25% 17.3% 18.0% 18.7% 19.4% 20.0% 20.7% Paradigm Development 28
NW 13th St. & NW 7th Ave NW 13th St. & NW 7th Ave - Residential and Commercial Project Type: Mixed-Use. Residential and Commercial Description: This development is a highly efficient development priced for the young and modern professionals with the need for individual transportation in a central business district. The building has 1.12 parking spaces/ units. Program: 2 towers with 360 units. 15,000sqft of retail space. The average SF is 676 and $1527 per unit. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The inforation contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Paradigm Development 29
NW 13th St. & NW 7th Ave Paradigm Development 230
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NE 135th St, 135th St - Residential and Retail Project Type: Residential and Retail Description: Mixed-use development in one of the emerging areas in Miami. Quick absorption of units is expected for the project. Low construction cost and land basis provides an opportunity for high yield. Program: 220 residential units with 9,900sqft of retail space. Average unit size is 770sqft and average price $1,500/sqft. The information contained in this promotional material is for illustration purposes only and is subject to change. Statements, figures, calculations, plans, images, and representations are indicative only. Images may include sketches, artist impressions, and computergenerated images. Changes may be made during the further planning or development stages of any development and dimensions, fittings, finishes, ongoing costs and specifications and representations are subject to change without notice. Whilst all reasonable care has been taken in providing this information the developer and its related companies and their representatives, consultants and agents accept no responsibility for the accuracy of any information contained herein or for any action taken in reliance thereon by any party whether purchaser potential purchaser or otherwise. Prospective purchasers must make their own inquiries to satisfy themselves as to all aspects of any Paradigm Real Estate Group project, design or product and further should seek independent legal and financial advice in relation to all of the information contained herein. The information contained in this material is a guide only and does not constitute an offer, inducement, representation, warranty or contract. Paradigm Development 235
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Development Schedule Paradigm Development 242
Development Schedule Paradigm Development 243
Safe Harbor This memorandum contains statements, estimates and projections that are forward-looking (collectively, "forward-looking statements ). When used in this report, the words " anticipate," " assume," become, " believe, "contemplate, " continue, "could, "designed, estimate, expect, going forward, future, hopeful, intend, look forward, may, "might, "opportunity, pending, plan, potential, project, scheduled, "shall, "should, target, "think, to be, upcoming, "well positioned, "will, "wish, would, other variations on such words and similar terminology, if and to the extent used, are intended to identify such forward-looking statements. All forward-looking statements are based on the current expectations and beliefs of the management of the general partner, Paradigm Development Group, LLC (the "General Partner ), concerning future events that are subject to substantial risks and uncertainties which may cause the actual results, performance or achievements of the Fund and/or its investments to be materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements. Factors that may cause or contribute to those potential differences include, but are not limited to, the following: national and local economic conditions; the terms of governmental laws, rules and regulations (including tax regulations) that affect the Fund and/or its investments and interpretations of those laws, rules and regulations; financing risks, including the inability of the Fund to obtain financing on favorable terms and the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; changes in the rate of inflation and interest rates; real estate risks, including variations of real estate values and the general economic climate in local markets; competition for tenants, imposition of rent controls, unfavorable enactments of zoning and other governmental laws, possible environmental liabilities, the prohibitive cost of casualty, windstorm, flood and other insurance, the occurrence of natural disasters, possible vandalism and competition; the Fund's ability or inability to acquire investments on the terms or at the costs currently contemplated and the timing of such investments; as well as other risks and uncertainties, some of which may not currently be foreseeable. The financial projections in this memorandum were prepared by the General Partner's management based on a number of estimates and assumptions which are described in this memorandum. The financial projections in this memorandum represent no more than an orderly presentation of results that might be achieved if all of the estimates and assumptions on which they are based were correct and fully achieved. Although such estimates and assumptions are considered reasonable by the General Partner, they are inherently subject to significant business, economic, real estate, financing, competitive, regulatory and other conditions, uncertainties, risks, contingencies and unforeseen changes, many of which are beyond the general partner 's control. In addition, many of such estimates and assumptions relate to future business decisions that are subject to change. As a result, there can be no assurance that any of such financial projections, or the estimates or assumptions on which they are based, can or will be achieved or that they are accurate. The projections must be reviewed with this general understanding and with careful attention paid to the estimates and assumptions described in this memorandum. The General Partner and the Fund do not in any way represent, warrant or guarantee that the projections, or the estimates or assumptions on which they are based, will be achieved (in whole or in part). All information in this memorandum speaks only as of the date of this memorandum. Neither the Fund nor the General Partner has any obligation to update any forward-looking statements to conform to actual results, performance or achievements or changes in the expectations or beliefs of the management of the Fund or the General Partner. Paradigm Development 244
Joe Drabkin President & CEO Paradigm Real Estate Group 5201 Blue Lagoon Drive, Suite 200 Miami, Florida 33126 joe@paradigmregp.com + 1 786 518 0841 www.paradigmregp.com Paradigm Development 245