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314 BEACH LOFTS An urban ecovillage investment in Oceanside, CA
ABOUT THE PROJECT
PROJECT SUMMARY
➤ 314 N. Cleveland Street, Oceanside, CA 92054
➤ 11,000 sq. ft. urban infill lot (currently vacant)
➤ Mixed-use four story development (10 lofts, 2 retail) located two blocks from the beach in downtown Oceanside
➤ Property is entitled for ten lofts & two retail spaces
➤ Developer: Simcoe Green Homes
DESIGN & POSITIONING
PROJECT POSITIONING
➤ Luxury lofts in an urban ecovillage setting
➤ Energy Star certified building
➤ Zero-net electricity
➤ Walkable community, close to restaurants, entertainment, etc
➤ Beach living
TARGET MARKET
➤ Young professionals
➤ Vacation home buyers
➤ Second home buyers
➤ Los Angeles buyers
➤ Beach lovers
TEAM
TEAM
➤ Developer: Simcoe Green Homes
➤ Architect: Kristi Byers
➤ General Contractor: Murfey Construction
➤ Design Consultant: PrinceHouse Living
➤ Steel Fabrication - FrameMax
➤ Sales Director -Cindy Roush
ABOUT SIMCOE GREEN HOMES
➤ We are a socially-responsible company that builds ecovillages and develops healthy homes to protect the environment, create jobs and improve neighborhoods
➤ Our goal is to protect the environment while lowering utility costs through advanced green building practices
➤ 5% of company profits go to local non-profits
JIM SIMCOE BIO
Jim Simcoe is the Founder of Simcoe Green Homes (SGH), a socially-responsible healthy green home developer in California. SGH designs and builds homes that revitalize neighborhoods, create jobs and foster healthier, more community-based living.
Jim is the Chairman of the Building Industry Association’s Sustainable Building Committee in San Diego.
A nationally recognized green real estate developer, speaker and author, Jim has been featured on NBC, Fox, SmartMoney.com, ESPN AM Radio, San Diego Insider TV, and writes for EcoHome, San Diego Business Journal, Personal Real Estate Investor Magazine, etc.
Jim is a Certified Green Building Professional, EcoBroker and Real Estate Broker. Jim graduated from Manhattanville College in Purchase, New York in 1992 with a degree in Management and minor in Philosophy while playing varsity lacrosse. Jim lives with his wife, two daughters, two dogs and two cats in Cardiff-By-The-Sea, Ca.
THE GREEN BUILDING
OPPORTUNITY TODAY
JULY / AUGUST 2015 PRICE $5.95 US $6.95 CAN
PERSONALREALESTATEINVESTORMAG.COM
FEATURE
ONE-TO-ONE: WHO’S AFRAID OF A LITTLE HOUSING BUBBLE? | MASTER INVESTOR: EDDIE SPEED/COLONIAL FUNDING GROUP AND NOTESCHOOL
CAPITAL CITY
PREIM - AUGUST 2015
➤ Buyers are willing to pay 10-14% more for homes with green certifications (Harris Interactive Poll 2014)
➤ Analysis of 1.6M homes sold between 2007-2012 showed that a green certified home averages 9% price premium in California (USGBC report 2014)
➤ Millennials favor smaller, more energy efficient homes & Energy Star home rating is high on their “must have” list (2015 NAHB International Builders presentation)
WHAT BUYERS WANT
➤ Smaller homes
➤ Higher quality
➤ Energy efficiency
➤ Better air quality (healthier, less toxic materials)
➤ Lower utility bills
➤ Open floor plans
WHAT BUILDERS BUILD
➤ Homes barely built to new Title 24 building code
➤ Use wood framing almost exclusively (even by the beach)
➤ Few energy efficiency methods/materials
➤ Little attention given to healthy materials
➤ The fastest production homes that can be built in the shortest timeframe possible
GREEN BUILDING MYTHS
➤ It adds 10-15% on to the price of construction
➤ It takes longer
➤ It’s more complicated
➤ It doesn’t translate into more money for the developer
➤ REALITY: Right team + Right strategy = Success
THE OPPORTUNITY
➤ Demand for green homes outweighs the supply of green homes
➤ Currently there are less than 200 Energy Star buildings/homes in San Diego
➤ Build high-end, energy-efficient green homes that offer higher quality, durability and greater comfort than competing homes
TIMELINE &
FINANCIALS
UNIT MIX/PRICINGUnit Square feet Bed Sales Price Price per sq. ft
1 1246 2bd/1.5ba (M) $703,990 $565
2 1246 2bd/2.5ba (M) $722,680 $580
3 1246 2bd/2.5ba (M) $722,680 $580
4 1146 2bd/1.5ba (M) $647,490 $565
5 1272 2bd/2.5ba (M) $737,760 $580
6 965 2bd/1ba $554,875 $575
7 1025 2bd/1ba $589,375 $575
8 1754 3bd/2.5ba (M) $982,240 $560
9 1936 3bd/2.5ba (M) $997,040 $515
10 1905 2bd/2ba (M) $981,075 $515
Total Project Value
Projected Best
Total Project Cost
Profit
Profit Margin (RO)
IRR
$ 7,956,093.00 $ 8,327,656
$ 6,933,474 $ 6,932,270
$ 734,780 $ 1,092,684
16.2 % 24 %
22.3 % 32.4 %
FINANCIAL PROJECTIONS*
*Projections subject to change & do not include rebate and incentive money received
REVENUE/COST SAVINGS EXCLUDED FROM PROJECTIONS
➤ Solar rebates
➤ Any additional grants, rebates, incentives for energy efficiency methods
➤ 9% premium for green labeled homes
➤ 5% premium for new construction
CAPITAL STACK
➤ Total capital needed = $6,933,474
➤ Construction loan amount (65% LTC) = $4,506,758
➤ $2,426,715 required
➤ $1,080,000 raised
➤ $1,346,715 required*
➤ We will close the offering once we raise a max of $1.4M
CAPITAL RAISED COVERS
➤ Hard costs (land, construction, labor)
➤ Soft costs (permits, fees, architectural, consultants,etc)
➤ Operations (office, supplies, administrative expenses, etc)
PACE FINANCING POTENTIAL
➤ Used to finance any energy efficiency measures of the project including: structural, MEP systems, exterior walls, roofing, solar, consultant and design fees
➤ Financing is attached to property taxes for max of 20 years although we will repay upon sale of the units
➤ Can be used in conjunction with a construction loan
➤ The GREATER the amount of PACE financing approved, the LOWER the amount required for the construction loan
➤ LOWER construction loan = HIGHER profits
Date Pre-Sale Timeline
Nov/Dec 2015 Plan submittal, secure construction financing, apply for PACE financing, apply for Pink report
Jan 2016 Building plans approved, finalize construction financing, apply for Yellow report
Jan/Feb 2016 Start construction
March 2016 Yellow report complete, begin taking deposits
April/May White Report complete, begin pre-sales
Sept/Oct Construction complete
WHY THIS DEAL?
WHY THIS DEAL WORKS
➤ The right team: Our team is comprised of experts in their respective fields
➤ The right timing: Oceanside re-development is in full swing
➤ The right market: Large target market (young professionals, vacationers, beach lovers, city lovers, etc)
➤ The right product: brand new energy-efficient luxury lofts in the heart of downtown Oceanside
ANALYZING THE 314 OPPORTUNITY
➤ Market (neighborhood, city, street)
➤ Identify target market
➤ Identify competition
➤ Understand city politics and desires
➤ Talk to local agents, residents, retailers, etc
➤ Land appraisal ($1130,000 - July 2014)
➤ Project appraisal (Colliers’ - July 2014)
RISKS
➤ Entitlement
➤ Construction
➤ Not building “green” (becoming a “must have” vs. “nice-to have”)
RISK MITIGATION
➤ Entitlement risk is zero, project is fully entitled
➤ Project is aggressively backed by the City
➤ High demand, very little competition
➤ Team is experienced in green building
➤ Building with steel vs. wood, less impacted by El Nino
➤ Shorter timeframe than traditional development deals (3-4 years) so less market timing risk
COMPETITIVE MARKETPLACE - CINDY
➤ Comps per sq ft price: $837-$1057 (for new construction)
➤ Comparable price per sq. ft: $581 (existing condos)
➤ Our per sq.ft ave: $548
➤ Apartments and retail being built downtown
➤ No new condos being built within 1/2 mile of our location
ABOUT INVESTING
INVESTOR CHARACTERISTICS
➤ 1-2 year capital return window
➤ New to development deals
➤ $100k invested in project
➤ Previous experience investing in startups and/or real estate
➤ Legacy & Social impact important but not the deciding factor
➤ “Do good, make money”
RETURN ON INVESTMENT
➤ Financial - investors
➤ Societal - contribute to community
➤ Environmental - drastically reduce CO2 emissions
➤ Economic - create local jobs
➤ Legacy - example for future builders
INVESTMENT OFFERING
➤ You receive a pro-rata profit share of 50% of net profits
➤ Minimum investment - $50,000
➤ Structure: Cleveland Street Beach Lofts, LLC
➤ You are investing in the LLC that owns the land and the project
INVESTMENT DOCUMENTS*
➤ Capital Investment Agreement
➤ Capital Investment Agreement Addendum
➤ Operations Agreement *When you invest you become a member in the LLC that owns the property
FREQUENTLY ASKED
QUESTIONS
HOW IS MY INVESTMENT SECURED?
When you invest you become an equal Member in the LLC that owns the land. You investment is secured by your share in the LLC.
WHAT IS THE MINIMUM INVESTMENT AMOUNT?
➤ $50,000 is the minimum investment in the project
➤ Once invested, you are allowed to reinvest at the terms of your original investment
HOW DO I INVEST?
➤ Sign the Operations Agreement and the Capital Investment Agreement
➤ Make payment arrangements through Jim, Taj or Cindy. We accept wire transfers and checks made out to: Cleveland Street Beach Lofts, LLC*
➤ Return both signed agreements with your method payment to: Cleveland Street Beach Lofts, LLC, 676 Second Street, Encinitas, Ca 92024
*314 Beach Lofts is a dba of Cleveland Street Beach Lofts, LLC
CAN I PURCHASE A UNIT?
As an investor you will have first right of refusal to purchase one of the lofts prior to the lofts being offered to the general public.
HOW MUCH MONEY HAVE YOU RAISED?
As of November 1, 2015 we have raised $1,080,000.
HOW OFTEN CAN I GET UPDATES ON THE PROJECT?
Our team prides itself on frequent and transparent communication with our investors.
You are always welcome to contact our Managing Member, Jim Simcoe with any questions you have.
We also send out project update emails frequently so you’re always up to speed.
We also welcome visits to our office in Encinitas and the project site in Oceanside.
