McKee Private Capital

Address: 350 Lackawanna Street Reading, PA 19601

Asset Class: Multifamily, Section 42

Size: 90 units

Year Built: 2002

Acquisition Date:  December, 2020

Acquisition Cap Rate: 

Capital Structure:
Debt: 71%
Equity: 29%

Financial Performance:
Original Capital Investment: $2,400,000

Projected Investor Dividends (Year 1): 7%

Description:
Oakshire Senior Apartments consists of 1 three-story apartment building situated on a parcel totaling approximately 2.9 acres in Reading, PA. Reading is centrally located in southeast Pennsylvania, within 60 miles of major metropolises such as Philadelphia, Lancaster, and Harrisburg. The community features a mix of one-bedroom and two-bedroom apartments with an average unit size of 769 square feet. The property is age restricted to seniors (55+) and income restricted to households earning no more than 50% and 60% of the Berks County AMI (area median income). Community amenities include a fitness center, elevator service, theatre room, game room, community room, hair salon, three on site laundry facilities, and three libraries.

MPC Strategy:
McKee Private Capital purchased Oakshire Senior in December 2020, marking our first expansion into the Pennsylvania market. MPC raised equity from five private investors, two of whom were in exchange, and fixed rate debt financing was provided by Freddie Mac.

While operations were stable under previous ownership, MPC is confident that meaningful NOI growth is achievable through more aggressive leasing and expense control. Physical occupancy rates among similar type properties in Reading have averaged 95%+ for the past three years providing proof of concept to our improved occupancy projections under new ownership. Year 1 investor dividends are projected at 7% annually.

Address: 940 West College Drive |Cheyenne, WY 82007

Asset Class: Multifamily, Section 42

Size: 66 units

Year Built: 2005

Acquisition Date: May 1, 2020

Acquisition Cap Rate: 7.02%

Capital Structure:
Debt: 75%
Equity: 25%

Financial Performance:
Original Capital Investment: $1,500,000
Projected Investor Dividends (Year 1): 7.5%

Description:
Capital Greens Apartments consists of 12 two-story apartment buildings situated on a 5.52-acre parcel located in Cheyenne, Wyoming. Cheyenne is the capital city in Wyoming, the county seat of Laramie County, and the principal city of the Cheyenne, Wyoming, Metropolitan Statistical Area which encompasses all of Laramie County. It is located 102 miles north of Denver and has a population of 63,957, making it the most populous city in the state. Cheyenne is the northern terminus of the extensive and fast-growing Front Range Urban Corridor that stretches from Cheyenne to Pueblo, Colorado, and has a population of 4,333,742.

Government is the largest sector of Cheyenne’s economy. The state of Wyoming operates a multitude of offices in downtown Cheyenne. Many area residents are employed by or are dependent on the U.S. Air Force, through F.E. Warren Air Force Base to the west of the city, and by the Wyoming National Guard. Railroads remain a major economic force for the city, with both the Burlington Northern Santa Fe and Union Pacific employing many residents. Lowe’s and Wal-Mart both operate distribution centers on the city’s outskirts. Sierra Trading Post is headquartered in the city and also operates its distribution and fulfillment centers in the city. In addition, because of the towns cooler summers and abundant electricity supplies (both renewable and non-renewable), Cheyenne has been able to attract a number of data centers including the NCAR supercomputing center, along with a Microsoft data center, powered by bio gas, and Green House Data’s data centers powered by wind energy.

MPC Strategy:
McKee Private Capital continued to expand its geographic footprint, entering Wyoming for the first time in May, 2020, and expanding our LIHTC tax credit portfolio. Capital Greens was packaged with another asset, River Run Apartments, located in Laramie, Wyoming, and we were able to purchase both assets at favorable terms. We also benefited from historically low interest rates, locking in a 3.25% rate on a 10 year fixed term with Freddie Mac. Year 1 investor dividends are projected at 7.5% annually.

We have retained the services of Syringa Property Management located in Boise, Idaho, a specialist in LIHTC properties, and active in the Wyoming market.

Address: 1228 South 17th Street | Laramie, WY 82070

Asset Class: Multifamily, Section 42

Size: 64 units

Year Built: 2004/2005

Acquisition Date: May 1, 2020

Acquisition Cap Rate: 7.02%

Capital Structure:
Debt: 75%
Equity: 25%

Financial Performance:
Original Capital Investment: $1,500,000
Projected Investor Dividends (Year 1): 7.5%

Description:
River Run Apartments I & II is a 64-unit affordable housing community located in Laramie, WY. The property is located minutes from schools, shopping, Interstate 80, and the University of Wyoming. Phase I of the property was built and placed in service in 2004 and Phase II of the property was built and placed in service in 2005 under the Section 42 Low-Income Housing Tax Credit (LIHTC) program. There are existing regulatory agreements in place which requires all units to be rented to income qualifying residents earning no more than 40%, 45%, 50%, and 55% of Area Medium Income (AMI) limits, which are provided by the Wyoming Community Development Authority.

The property offers two, three, and four-bedroom apartment homes complete with a fully equipped kitchen with a patio/balcony, walk-in closets, and extra storage. Community amenities include an on-site leasing office, on-site maintenance, computer room, fitness center, on-site laundry facility, playground, & picnic area.

Laramie is a city in Albany County, Wyoming with a population of 32,104. Located on the Laramie River in southeastern Wyoming, the city is west of Cheyenne, at the junction of Interstate 80 and U.S. Route 287.

Laramie was settled in the mid-19th century along the Union Pacific Railroad line, which crosses the Laramie River at Laramie. It is home to the University of Wyoming, Wyoming Technical Institute, and a branch of Laramie County Community College. Laramie Regional Airport serves the area. The ruins of Fort Sanders, an army fort predating Laramie, lie just south of the city along Route 287. Located in the Laramie Valley between the Snowy Range and the Laramie Range, the city draws outdoor enthusiasts because of its abundance of outdoor activities including skiing, snowmobiling, mountain biking, hunting, fishing, and hiking.

MPC Strategy:
McKee Private Capital continued to expand its geographic footprint, entering Wyoming for the first time in May, 2020, and expanding our LIHTC tax credit portfolio. River Run was packaged with another asset, Capital Greens Apartments, located in Cheyenne, WY and we were able to purchase both assets at favorable terms. We also benefited from historically low interest rates, locking in a 3.27% rate on a 10 year fixed term with Freddie Mac. Year 1 investor dividends are projected at 7.5% annually.

We have retained the services of Syringa Property Management located in Boise, Idaho, a specialist in LIHTC properties, and active in the Wyoming market.

Address: 4101 Central Avenue | Greats Falls, MT 59405

Asset Class: Section 42 Affordable Housing Community

Size: 121 Units

Year Built: 1999

Acquisition Date: Closed on November, 2019

Pro Forma Cap Rate: 5.95%

Capital Structure:
Debt: 75%
Equity: 25%

Description:
Autumn Run is comprised of ten, two-story multifamily apartment buildings. The community features a well- balanced mix of one, two and three-bedroom apartments totaling approximately 99,000 rentable square feet. Autumn Run provides affordable housing to families earning no more than 60% of Cascade County’s AMI (area median income). Ownership must lease to renters within this prescribed income cap.

The Opportunity:
Autumn Run will provide investors with the opportunity to acquire a high quality, stabilized asset, at well below replacement cost. Modest rent increases coupled with more efficient management practices will bolster investor returns over the 10 year life of the investment. We anticipate investor cash-on-cash returns in excess of 7% year one with subsequent annual increases as we optimize operations and grow income over the term of the investment.

Address: 825 N Cotner Blvd
Lincoln, NE 68505

Asset Class: Senior Housing

Size:   94 units

Year Built: 1997

Acquisition Date:  August, 2019

Acquisition Cap Rate:  5.85%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 70%
Equity: 30%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Sunrise Gardens is comprised of one, three-story multifamily apartment building with a total of 69,745 rentable square feet. The community features a mix of one-bedroom and two-bedroom apartments with an average unit size of 742 square feet. The property is age restricted to seniors (55+), but there are no rent limit restrictions. Community amenities include an onsite laundry facility, two elevators, and a community room. The property benefits from close proximity to the Gateway Mall, Lincoln’s largest shopping center.

The Opportunity/span>:
Sunrise Gardens will provide investors with the opportunity to acquire a stabilized asset at below replacement cost. With ever greater numbers of baby boomers looking to downsize in retirement, this asset is well positioned to benefit from demographic trends. Modest rent increases coupled with more efficient management practices will bolster investor returns going forward. We anticipate investor cash on cash returns in excess of 6% year one with subsequent increases as we benefit from fixed debt service payments for the term of the investment.

Address: 506 Timber Ridge Drive
Cushing, OK 74023

Asset Class: Project-Based Section 8

Size: 30 units

Year Built: 1980

Acquisition Date:  TBD

Acquisition Cap Rate:  8.5%

Disposition Date:  TBD

Disposition Cap Rate:  TBD

Capital Structure:
Debt: 75%
Equity: 25%

Market Overview:

Cushing, OK is located 70 miles northeast of Oklahoma City and just 20 miles east of Stillwater, which is home to the main campus of Oklahoma State University. Apartment vacancy rates in this submarket are sub 5% as a result of low apartment housing inventory and limited supply in the pipeline. Additionally, Cushing is one of the largest oil storage locations in the country.

Property Description:

Eastbrook Apartments is comprised of 9 single story multifamily apartment buildings. The community features a well balanced mix of one-bedroom, two-bedroom, and three-bedroom apartments totaling 22,000 rentable square feet. A portion of tenant rent payments are government subsidized as specified in the Housing Assistance Payments (HAP) Contract.

The Opportunity:

Eastbrook will provide investors with the opportunity to acquire a stabilized asset in a supply constrained market. While the property is subject to affordable restrictions through 2032, existing contract rents are substantially above market. And given the nature of the HAP contract, Eastbrook has zero exposure to market rent reductions for the term of the contract providing investors with a truly risk adjusted yield. This investment should generate solid, double-digit returns to investors each month.

Address: 1928 5th Street
Springfield, OR 97477

Asset Class: Multifamily, Conventional

Size: 38 units

Year Built: 2016

Acquisition Date:  December, 2017

Acquisition Cap Rate:  5.68%

Disposition Date:  TBD

Disposition Cap Rate:  TBD

Capital Structure:
Debt: 70%
Equity: 30%

Financial Performance:
Original Capital Investment: $1,910,804.00
Total Cumulative Investor Distributions: T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
The Reserve at 5th consists of 5 two-story townhouse apartment buildings which are situated on a 1.59 acre site. The garden style community features a desirable unit mix of two-bedroom/1.5-bathroom townhouses which are appointed with high end finishes including granite countertops and in suite laundry appliances.

MPC Strategy:
Located four miles east of Eugene, the city of Springfield has experienced a housing shortage in recent years and has an average vacancy rate of just 2% as a result. McKee Private Capital identified this asset as a replacement property for a 1031 exchange and successfully closed the transaction in December, 2017, marking its first acquisition in the state of Oregon. We obtained financing through Freddie Mac’s small balance loan program. In addition to monthly cash distributions, investors can expect steady appreciation in asset value given the underlying fundamentals in this growing market.

Address: 1906 18th Street | Bakersfield, CA 93301

Asset Class: Multifamily, Conventional

Size:  35 units

Year Built: 1912

Acquisition Date:  September, 2017

Pro Forma Cap Rate:  7%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 72%
Equity: 28%

Financial Performance:
Original Capital Investment: $830,000
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
The New Yorker Apartments is comprised of one three-story building located in the historic district of Downtown Bakersfield. This midrise community features a unique unit mix of studio, one, and two bedroom apartments all of which have been thoughtfully restored to maintain their authentic vintage ambiance. Common area amenities include on site laundry facility, off street parking, and a beautifully landscaped courtyard appointed with a koi pond.

The Opportunity:
McKee Private Capital purchased the New Yorker Apartments in September, 2017, marking our first expansion into the Bakersfield market. MPC raised equity from two private investors and utilized Freddie Mac’s small balance loan program, which features a 36 month interest only period. MPC investment projections indicate that this investment will generate a cash on cash yield in excess of 9% per annum. With limited supply in the pipeline and Bakersfield citywide vacancy rates averaging just 2.3%, investors can expect outsized cash on cash returns with their participation in this investment.

Address: 13501 Nall Avenue
Overland Park, KS 66224

Asset Class: Single Tenant, Net Lease

Size: 6,760 SF

Year Built: 2014

Acquisition Date:  April, 2017

Acquisition Cap Rate:  6.08%

Disposition Date:  TBD

Disposition Cap Rate:  TBD

Capital Structure:
Debt: 60%
Equity: 40%

Description:
Constructed in 2014 as a build-to-suit for Charles Schwab & Company, this property is located in Overland Park, one of the highest income, high growth corridors of Johnson County, Kansas. Charles Schwab (NASDAQ: SCHW) is a publicly traded company with a Standard & Poor's A+ credit rating.

Purchased subject to a 10 year triple net, fully guaranteed corporate lease, plus three 5 year options, each with 10% rent increases, this investment will generate solid, growing returns over the next 20+ years, with virtually no landlord responsibilities.

The hard corner signalized intersection where the property is located boasts daily traffic counts of over 50,000 cars per day, and the average household incomes within a 1 mile radius of the property exceed $145,000 annually.  We are confident that this investment will produce good long term income, as well as value appreciation due to its outstanding location.

MPC Strategy:
This investment will provide MPC investors with a truly passive income by producing immediate cash flow in excess of 6%, with steady increases over the life of the tenancy.

Address: 614 Park Madison Drive Greenwood, IN 46142

Asset Class: Multifamily, Conventional

Size:  56 units

Year Built: 2004

Acquisition Date:  January, 2017

Pro Forma Cap Rate:  6.8%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 65%
Equity: 35%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Situated just 15 minutes south of Indianapolis, Park Madison Apartments is comprised of 7 two-story multifamily apartment buildings located on approximately three acres of land. The community consists of 56 two-bedroom floor plans totaling 64,400 rentable square feet for a generous 1,150 square feet of living space per apartment. Property amenities include built-in microwaves, washers/dryer connections, private patios and balconies, walk-in closets, and ample off street parking.

The Opportunity:
Park Madison provides investors with the unique opportunity to acquire real estate below replacement cost in a growing secondary market. With rents in the Indianapolis market expected to expand by 3.5% in 2017, Park Madison will continue to provide our investors with solid, conservative revenue growth. This investment is currently generating annualized cash flow in excess of 10%.

Address: 1703 El Centro Street, Seeley, CA 92273

Asset Class: Multifamily, Section 42

Size:  48 units

Year Built: 2000

Acquisition Date:  December, 2016

Pro Forma Cap Rate:  6.5%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 75%
Equity: 25%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Sierra Vista consists of 6 two-story multifamily apartment buildings located in Seeley, CA, just 10 miles west of El Centro. The community contains 24 two-bedroom, two bath apartments and 24 three-bedroom, two bath apartments. Sierra Vista provides affordable housing to families earning no more than 30%, 40%, 50%, and 60% of Imperial County AMI (area median income). Each set aside has a dedicated number of units ownership must lease to renters within the prescribed income caps. Community amenities include washer/dryer connections, playground, clubhouse, and covered parking.

The Opportunity:
Acquired in December of 2016, Sierra Vista has provided investors with the opportunity to acquire Southern California real estate at a significant discount to replacement cost. The affordability designation is advantageous in this lower income MSA, which caters to workforce families primarily in the agriculture and services sectors. Modest rent increases coupled with more efficient management practices will bolster investor returns going forward.

Address: 650 South International Boulevard | Calipatria, CA

Asset Class: Multifamily, Section 42

Size:  81 units

Year Built: 2001

Acquisition Date:  December, 2016

Pro Forma Cap Rate:  8.5%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 75%
Equity: 25%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Casa Del Sol consists of 10 two-story multifamily apartment buildings located in Calipatria, CA, just 25 miles north of El Centro. The community contains 41 two-bedroom, two bath apartments and 40 three-bedroom, two bath apartments. Casa Del Sol provides affordable housing to families earning no more than 30%, 40%, 50%, and 60% of Imperial County AMI (area median income). Each set aside has a dedicated number of units ownership must lease to renters within the prescribed income caps. Community amenities include covered parking, washer/dryer connections, playground, clubhouse, and barbecue area.

The Opportunity:
Acquired in December 2016, Casa Del Sol provides investors with the unique opportunity to acquire Southern California real estate at below replacement cost. The affordability designation is advantageous in this lower income MSA, which caters to workforce families primarily in the agriculture and services sectors. Modest rent increases coupled with more efficient management practices will bolster investor returns going forward.

Address: 1503 N 2100 W, St. George, UT 84770

Asset Class: Multifamily, Section 42

Size: 168 units

Year Built: 1995/1996

Acquisition Date:  January, 2016

Acquisition Cap Rate:  6.5%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 80%
Equity: 20%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Sierra Pointe consists of 15 two-story apartment buildings situated on two parcels totaling approximately 11 acres in St. George, UT. Just 40 miles west of Zion National Park, this garden style community features an attractive unit mix of studio, one, two, and three bedroom apartments. Common area amenities include on site laundry facilities, community fitness center, playground, sauna, and garage parking.

MPC Strategy:
McKee Private Capital purchased Sierra Pointe in January 2016, marking our first expansion into the Utah market. MPC raised equity from seven private investors and assumed the Seller’s existing debt, which will mature in 2023. MPC investment projections indicate that Sierra Pointe will generate a cash on cash in excess of 9% per annum. While operations were stable under previous ownership, MPC is confident that meaningful rent growth is achievable with moderate unit upgrades and a more aggressive lease renewal campaign. Median physical occupancy rates among similar type properties in St. George have been 99% for the past three years. Additionally, the local population has increased by approximately 30% over the last ten years and is poised for further growth.

Address: 123 N 25th Street, Norfolk, NE 68701

Asset Class: Multifamily, Project Based Section 8

Size:   50 units

Year Built: 1979

Acquisition Date:  January, 2013

Acquisition Cap Rate:  13.0%

Disposition Date:  T.B.D.

Disposition Cap Rate:  T.B.D.

Capital Structure:
Debt: 60%
Equity: 40%

Financial Performance:
Total Cumulative Investor Distributions:  T.B.D.
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
Woodwinds Apartments consist of 6 two-story multifamily apartment buildings located in
Norfolk, Nebraska. The buildings contain a total of 44 two-bedroom and 6 three-bedroom apartment townhomes all of which are made affordable to our residents with rental assistance provided under a HAP Contract (Housing Assistance Payments), administered by the U.S. Department of Housing and Urban Development.   Amenities include an onsite laundry facility, playground, and central air conditioning.

MPC Strategy:
McKee Private Capital had the opportunity to acquire Woodwinds Apartments on an off-market basis in January of 2013. Upon takeover, MPC terminated the existing HAP Contract and negotiated a new, budget based Contract with HUD.  As a result, Woodwinds is no longer subject to periodic RCS (rent comp surveys) and therefore has zero exposure to market rent reductions.  This investment continues to generate solid, double-digit returns to investors each month.

Address: Various Lehigh Acres, FL

Asset Class: Single Family Home Development

Size: 16 Single Family Homes

Year Built: 2005 - 2007

Acquisition Date:  2004 - 2006

Acquisition Cap Rate:  -

Disposition Date:  Various

Disposition Cap Rate:  -

Capital Structure:
Debt: 90%
Equity: 10%

Financial Performance:
Total Cumulative Investor Distributions:  -
Net Sale Proceeds: T.B.D.
Annualized Return on Investment: T.B.D.

Description:
16 single family homes, built between 2005-2006 in Lehigh Acres, FL, east of Ft. Myers, and just 20 minutes from the Gulf of Mexico. Homes range in size from 3BR/2BA to 4BR/2.5BA and are situated on ¼ acre lots. Features include upgraded appliances, laundry rooms, tile floors, large screened lanais and two car garages.

MPC Strategy:
McKee Private Capital purchased 16 vacant residential lots in Lehigh Acres, FL in 2004, at an average cost of $10,625, and obtained 100% construction financing to develop new single family homes for investment.

The timing of this investment was good, and we were able to sell 10 of the 16 homes prior to the market collapse at profits ranging from $75,000 to $125,000 per house. Our leverage on these homes was enormous given the ability to finance 100% of the development cost. The remaining 6 homes remain in our investment rental portfolio, and are currently 100% occupied. The continued growth in Southwest Florida is impressive, and we are happy to hold these remaining homes for long-term capital gains.