Construction Update
(Recorded November 2024) Join Ted Aust, VP of Wealth Development, and Chris DuCharme, Director of Acquisitions and Real Estate Services, as they walk through our SP10 property.
Recorded Live – November 2024
Offering Summary
Southpointe Apartments* is a build-to-rent product centered around a mid-rise apartment building in the Phoenix Valley. The full site currently includes a hotel owned by Caliber as well as a recently acquired adjacent parcel.
Upon completion, the complex will feature a conversion of the existing hotel tower to high-density units and ground-up development of the surrounding land to low-density, for-rent units: 104 high-density units in the tower and 84 low-density surface units
The hotel tower will include studio, one-bedroom, and two-bedroom units. The surrounding low- density units will be one to three-bedroom units, some with attached garages.
- Phoenix ranks among the top 10 real estate markets in PwC’s 2023 Emerging Trends Real Estate report.
- Second-highest tracked market for in-migrations over the last 5 years***
- Average market-asking rents up over 20% since the end of 2019 (Q4 2019-Q1 2024)**
- Strong local employment growth and a lack of new apartments delivered to support that growth.
- Only 583 units delivered in a 3-mile radius around the Intel Campus since 2018**
- Only 232 units delivered in a 3-mile radius around Southpointe Apartments since 2018
Offering Highlights
Legal Entity Name | SP 10 Preferred Equity, LLC |
Property Location | Ahwatukee Foothills |
Asset Class | Multi-Family |
Investment Type | Single Asset |
Investment Strategy | Opportunistic, Development |
Investment Objective | Income or Growth |
Occupancy | None |
Investor Profile | Accredited Investors Only |
1031 Exchange Allowed? | No |
Strategy | Opportunistic, Development |
Opportunity Zone? | No |
SD-IRAs Allowed? | Yes |
Targeted Hold Period | 3-5 years |
Targeted Total Raise | $30,200,000 |
Sponsor Co-Investment | N/A |
Minimum Investment | $100,000 |
* Marketing name of asset still to be finalized.
*** https://www.cbre.com/insights/articles/retail-markets-in-focus-phoenix
** Source: CoStar Data
Investment Details
Investment Description
This offering is for a preferred equity investment in a planned multi-family residential development and the adaptive reuse of a Caliber hotel which will be converted into a multi-family apartment complex. The site consists of ±8.04 acres and is located on the southwest corner of the I-10 Freeway and Elliot Road in Phoenix, Arizona.
Property Details
ADDRESS | 10831 S 51st St Phoenix, AZ 85044 |
ASSET CLASS | MultiFamily |
YEAR BUILT | Estimated Completion 2026 |
ACRES | ±8.04 |
UNITS | 188 |
NUMBER OF BUILDINGS | 2 |
PARKING SPOTS | 320 |
OCCUPANCY | N/A |
Property Details
Demographics | 5-Mile Radius |
---|---|
Population | 253,392 |
Median Age | 36.8 |
People per Household | 2.5 |
Growth Projection (2024-2029) | 1.5% annually |
Unemployment | 3.9% |
*Source: CoStar |
Business Plan
General Business Summary
The development is a conversion of a 160-key hotel to a 188-unit multifamily apartment project. The hotel tower will be converted to 104 units (studios, one-bedrooms, and a two-bedroom) with the ground up development of an additional 84 townhome-style units (one-, two-, and three-bedrooms) on the land around and adjacent to the hotel. The project will feature modern amenities including a fitness center, pool, co-working spaces, and a tenant clubhouse.
Business Plan Assumptions
Net Operating Income (NOI)
Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | |
---|---|---|---|---|---|
Total Revenue | $0 | $1,467,792 | $5,245,996 | $6,521,261 | $6,716,898 |
Operating Expenses | $0 | $406,349 | $996,358 | $1,361,312 | $1,571,411 |
NOI | $0 | $1,061,442 | $4,249,638 | $5,159,948 | $5,145,487 |
NOI Growth (% YOY) | – | – | 300% | 21% | 0% |
Exit Strategy
The exit strategy for the SP 10 project is focused on the sale or recapitalization of the asset. This will provide a liquidity event for investors, with the goal of maximizing returns. The exit is currently projected for Year 5 from the start of the project.
Assumptions
At Aquisition | At Sale (Year 5) | |
---|---|---|
NOI | N/A | $5,300,000 |
Occupancy | N/A | ±95% |
Cap Rate | N/A | 5.50% |
All in Cost / Sale Price | N/A | $96,000,000 |
Price per Unit | N/A | $500,000 |
Average Rent / SqFt | N/A | $3.02 |
Financial Plan
Capital Plan
Capital Sources | |
---|---|
Equity Offering Raise | $30,200,000 |
Construction Loan | $39,200,000 |
TOTAL SOURCES | $69,400,000 |
Capital Uses | |
---|---|
Acquisition Costs | ($13,900,000) |
Pre Development & Soft Costs | ($13,400,000) |
Hard Costs | ($25,500,000) |
Financing Costs | ($5,700,000) |
Fee Reserve | ($10,800,000) |
TOTAL USES | ($69,400,000) |
Investment Options & Terms
Option 1: SP10 Preferred Equity, LLC Priority Preferred Units
Target Raise (for all units)
$30,200,000
Minimum Investment
$100,000
Anticipated Hold Period
3-5 years
Equity Multiple Cap: **
Up to 2X Return on Capital Contributed
Management Fee
1.5%
Initial Price Per Unit
$1,000
** 2X return on investment is not guaranteed. Inclusive of return of capital and all interest.
Option 2: SP10 Preferred Equity, LLC 12% Current Pay Units
Target Raise (for all units)
$30,200,000
Minimum Investment
$100,000
Anticipated Hold Period
3-5 years
Current Pay *
12%
annualized, paid quarterly
Management Fee
1.5%
Initial Price Per Unit
$1,000
* 12% annualized is not guaranteed.
Key Dates
Construction timeline
Closed on Construction Loan for Phase I
April 2024
Interior and Exterior Demolition of Hotel Tower
Q2 2024 – Q4 2024
Building Permits and Begin Phase I Tower Renovation
Q4 2024
Delivery of Phase I units
Q4 2025 – Q1 2026
Phase II and Phase III Development
2025 – 2027
Executive Team
Our executive team brings extensive experience in scaling businesses, having grown Caliber to $2.9 billion in assets under management, serving over 2,000 customers with more than 80 employees. With broad expertise in strategy, capital raising, real estate investing, product development, and capital markets, they are entrepreneurial leaders with a growth mindset and a contrarian approach. Aligned with shareholders, the team holds approximately 50% stock ownership, including the Co-Founders, ensuring their interests are fully aligned with investors.
CEO
Chris LoefferAs CEO, Chris oversees all acquisitions, manages investment funds, and builds strategic partnerships.
PRESIDENT, CO-FOUNDER & DIRECTOR
Jennifer SchraderJennifer is in charge of daily operations at Caliber and provides hands-on direction for all new construction and redevelopment projects across the company’s portfolio.
CHIEF FINANCIAL
OFFICER
Jade LeungAs CFO, Jade Oversees corporate financial planning, reporting, operational optimization, and risk management across Caliber’s business units.
CHIEF DEVELOPMENT OFFICER
Roy BadeRoy is responsible for sourcing and analysing potential properties for the company, seeking ways to maximize returns on existing properties, and managing construction and development activity.
Documents & Resources
SP10 Preferred Equity, LLC Documents
Other SP10 Documents
Articles & Press Coverage
Assumptions & Risks
Below are selected risk factors associated with an investment in Pickleball at Riverwalk Opportunity Zone Fund, LLC and Pickleball at Riverwalk Fund, LLC. Investments in Caliber private placements can lose entire value, are illiquid and are speculative.
- Investment involves high degree of risk; limited liquidity; no public market; suitable only for sophisticated investors;
- Investment strategy is speculative; returns are not guaranteed and no assurance objectives will be achieved;
- May pay distributions and fund redemptions from borrowings, offering proceeds, or asset sales with no limits on amounts it may pay from such sources;
- May invest in securities that involve a higher degree of risk or have valuations that fluctuate dramatically;
- Access to debt financing may be limited and subject to rate increases, restrictive covenants, or untimely repayment obligations;
- Involves unique risks associated with real estate investment, including competition for tenants, interest rate risk, occupancy issues, insurance risks, inflation risk, among others.;
- Offering is not contingent on a minimum capital raise;
- Multiple conflicts of interest, including compensation arrangements, incentive fee structures, positions held with affiliated entities, co-ownership arrangements, and the purchase of and allocation of investment opportunities.
- For a more complete discussion of risk factors, please refer to the SP10 Preferred Equity PPM.
Disclosures
This website is neither an offer to sell nor an offer to buy securities. An offering is made only by the private placement memorandum (“PPM”) or similar offering document. This material must be read in conjunction with the PPM in order to fully understand all the risks and benefits of the offering. Neither the U.S. Securities and Exchange Commission (“SEC”) nor any state regulator has approved or disapproved this offering. Any representation to the contrary is false and misleading. A copy of the PPM must be made available to you in connection with any offering.
Investment is restricted to accredited investors only, as that term is defined by the SEC.
SEC.gov | Accredited Investors
The above includes statements concerning the Company’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance, or growth and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, readers and the audience can identify these forward-looking statements through the use of words or phrases such as “estimate,” “expect,” “anticipate,” “intend,” “plan,” “project,” “believe,” “forecast,” “should,” “could,” and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events. The Company’s expectations, beliefs, and projections are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections will result or be achieved or accomplished. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, factors affecting the Company’s ability to successfully operate and manage its business, including, among others, title disputes, weather conditions, shortages, delays, or unavailability of equipment and services required in real estate development, property management, brokerage and investment and fund operations, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; changes in costs of operations; loss of markets; volatility of real estate prices; imprecision of property valuations; environmental risks; fluctuations in weather patterns; competition; inability to access sufficient capital from internal and external sources; general economic conditions; litigation; changes in regulation and legislation; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks, or pest infestation; increasing costs of insurance, changes in coverage and the ability to obtain insurance; and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission. In addition to financial measures calculated in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures are useful because they provide an alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations, for measuring the Company’s cash flow and liquidity, and for comparing the Company’s financial performance to other companies. The Company’s management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures prepared in accordance with GAAP. This information does not constitute an offering of, nor does it constitute the solicitation of an offer to buy securities of the Issuer. This information is provided solely to introduce the Issuer to the recipient and to determine whether the recipient would like additional information regarding the Issuer and its anticipated plans. Any investment in the Issuer or sale of its securities will only take place pursuant to an appropriate, private placement memorandum and a detailed subscription agreement. This information is confidential and may not be distributed to any other person without prior written consent. An investment is suitable only for persons of substantial net worth that are willing, and have the financial capability, to bear the economic risk of an investment for an indefinite period of time. Past performance is not necessarily indicative of future results and there is no assurance that the offering will achieve its objectives or avoid significant losses. There is no public market for the securities and the Issuer is not required to redeem the units. Investors should consult their own financial professional for advice specific to them. Circumstances may exist where potential conflicts of interest exist between the Investor, Advisor, Sponsor, and affiliates in connection with the management and operation of the offering. This offering may be subject to volatility of public securities that may impact the net asset value (NAV) and total return due to market risk. The use of borrowed funds to leverage investments involves a higher degree of financial risk and may impact performance. Also, the ability to obtain financing or adverse economic/property conditions impacting debt strategies can affect returns. Direct and indirect purchase of real property and commercial real estate involves significant risk, including, market risks, risks related to the sale of land, risks specific to a given property, principal risk and liquidity risk. These Real estate risks included, but are not limited to regulation and zoning, economic conditions, financial resources of tenants, changes in interest rates and availability of mortgage funds, casualty losses, decreased property values, development and construction risks, and acts of God.
Securities offered through Tobin & Company Securities (Member FINRA/SIPC )
Schedule an Investor Strategy Call
Stay Informed
Sign up for our newsletter to learn about new offerings coming soon.