|Property Type:||Distribution Warehouse|
|Total Equity Raise:||$12,550,000|
|10-Yr Targeted IRR:||14%-16%|
|10-Yr Targeted Equity Multiple:||2.40x - 2.60x|
|10-Yr Targeted Average Cash Yield:||8% - 9% once stabilized|
|Targeted Distribution Commencement:||Following Stabilization (expected in year 3)|
With increased construction costs, additional funding is required for SMARTCAP Opportunity Zone Fund 3. Additional proceeds are being raised on a first come first serve basis, targeting approximately $3MM in additional proceeds. Final raise amount is subject to change based on final lender loan proceeds.
Prior to the additional funding request, SMARTCAP has been diligently working with our lending partners to increase proceeds while staying within the initial lending parameters. Both Bank of the West and Banner Bank (Lenders for Buildings A & B, respectively) have already agreed to increase proceeds with the support of a revised appraisal. SMARTCAP DC North Building B has already received an updated appraisal supporting rental rates of $0.82 PSF. on the shell and $1.85 PSF on the office, significantly higher than our original proforma!
Several sales transactions have also supported valuations higher than our initial projections (See Sale Comps for additional detail). The last three sale comps in the North End Industrial Market have average $232 PSF and 4.03% CAP rate vs. original proforma 5.00% CAP and $190 PSF.
SMARTCAP Opportunity Zone Fund 3, LLC will be the developer and owner of 308,000 SF of Class A distribution warehouse in the North Seattle Opportunity Zone located in Marysville, WA. The investment will be the fourth development, and SMARTCAP’s third designated Opportunity Zone investment, in the emerging Cascade Industrial Center of North Seattle.
This is an Opportunity Zone investment and only qualified capital gains can be invested to receive the additional tax advantages associated with the 2018 Opportunity Zone Tax Incentive. Projected returns are before additional tax advantages.
SMARTCAP, Inc is acquiring two neighboring sites totaling 23.09-acres in Marysville, WA, the Pacific Northwest’s Premier Industrial Market. SMARTCAP has entered a Joint Venture Agreement with a local high net-worth Family Trust, which is contributing $10mm of the estimated $19,550,000 total equity for the development. The remainder will come from SMARTCAP Opportunity Zone Fund 3, LLC.
NOTE REGARDING PROJECTED FINANCIAL INFORMATION: THE FINANCIAL INFORMATION SET FORTH IN THIS DOCUMENT INCLUDES UNVERIFIED THIRD PARTY VALUATIONS AND FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE PROJECTIONS OF EXPECTED VALUE AT DISPOSITION IN THE CASE OF PROPERTIES THAT HAVE NOT YET SOLD, TOTAL RETURN IF SOLD TODAY, AND SIMILAR PROJECTIONS INCLUDED IN THE PROJECTED FINANCIAL INFORMATION ABOVE AND BELOW IS BASED UPON ESTIMATES MADE BY SMARTCAP. SMARTCAP HAS COMPILED AND PROVIDED THE PROJECTED FINANCIAL INFORMATION BASED ON A METHODOLOGY OF ITS CHOOSING, WHICH IS NEITHER AUDITED NOR REVIEWED BY AN INDEPENDENT ACCOUNTING FIRM. THERE MAY BE OTHER VALUATION METHODOLOGIES THAT WOULD PRODUCE DIFFERENT RESULTS. THE PROJECTIONS OF VALUE, RETURN AND SIMILAR PROJECTIONS INCLUDED IN THE PROJECTED FINANCIAL INFORMATION HEREIN ARE BASED UPON ESTIMATES MADE BY SMARTCAP AND NOT UPON ANY ACTUAL OPERATING RESULTS OF SMARTCAP OR THE PROPERTIES. THERE IS NO ASSURANCE OR GUARANTEE THAT THE ACTUAL OPERATIONS OF SMARTCAP OR THE VALUATION OF THE PROPERTIES WILL EQUAL ANY OF THE PROJECTIONS. YOU SHOULD NOT RELY ON THE PROJECTED FINANCIAL INFORMATION CONTAINED IN THIS SUMMARY IN EVALUATING SMARTCAP’S FINANCIAL CONDITION AND PERFORMANCE.
3% of Construction Cost Development Fee
1.5% annual asset management fee charged on equity raised
The above fee table is a summary, and there may be additional fees associated with this offering. Please refer to the Company’s Operating Agreement and Private Placement Memorandum for further details.
8% IRR paid to investor.
70%/30% split thereafter with no upside CAP for investors.
SMARTCAP is a Washington State company who has been building in the Arlington / Marysville submarket since 2018. During this time, SMARTCAP has delivered four successful buildings: SCG 180th St. Industrial Park (98,003 SF) and SMARTCAP 188th St. Industrial Park Buildings A & B (99,555 SF) with SMARTCAP’s third development projected (Arlington Airport Industrial Park) set to be delivered in September 2021.
Long Term Goal - SMARTCAP is the leading developer in the Arlington / Marysville Industrial Market and has a long-term strategy of building / delivering Class A Industrial assets. A growing portfolio will allow SMARTCAP the ability to offer readily available space requirements to land perspective tenants, have better control over rental rates and maximize asset value with the potential of exiting the portfolio in the future to a single investor who is looking to enter the market at scale.