June 15, 2017 – ArborCrowd, an online commercial real estate company, announced today a new real estate investment opportunity – known as the Lago Paradiso (the “Property”). A profitable and stabilized multifamily complex, the Property is located in Miami, Fla., one of the most international and desirable marketplaces in the country.
ArborCrowd investors have the opportunity to own a piece of a $4 million equity stake in Lago Paradiso. The Property has a targeted 13 percent to 17 percent Internal Rate of Return (IRR) and a projected hold period of four to seven years.
The goal of the business plan is to cultivate tremendous value upon sale of the Property, while maintaining strong annual returns for investors. This will be executed through a value-add repositioning, experienced property management and operational efficiency.
“ArborCrowd is the engine that brings successful real estate investments with the industry’s best sponsors and crowd investors,” said Ivan Kaufman, Co-founder and CEO, ArborCrowd. “The long-standing relationships that ArborCrowd has developed with institutional real estate investors has enabled us to attract a network of successful leaders who know how to source, manage and execute some of the best multifamily deals in the country.”
ArborCrowd’s investment model is unlike other crowdfunding platforms – the quality of the real estate is at the core of the business. Other models pool investors’ money into funds that are blindly allocated to different assets. ArborCrowd created a better way to invest by providing investors the transparency and knowledge to choose what deals their money goes into.
“Looking at just the returns of a property are not enough. ArborCrowd will only post what we believe is a strong investment offering. In order to be confident in the deal, we hone in on the depth and breadth of the sponsor’s experience,” said Adam Kaufman, Co-founder and Managing Director, ArborCrowd. “This commitment to only presenting high caliber deals is proving to be successful as all our previous deals funded quickly – with ArborCrowd’s last equity raise oversubscribed in just three business days.”
Lago Paradiso Deal Highlights
The Property was acquired in May 2017 for $69.7 million. Lago Paradiso is a lakefront apartment complex that consists of 27 buildings with 424 one and two bedroom units – currently 97 percent occupied.
The business plan is to create value by increasing rents through renovations, and by implementing new property management and operational expertise. Robbins Electra and its affiliates own and operate more than 22,000 units. This extensive management experience, particularly in Florida, means the Sponsor is well equipped to manage rent escalations while leveraging proprietary systems to improve operational costs.
Key benefits for ArborCrowd investors, include:
- Basis: As an off-market transaction, the Property was acquired at a favorable purchase price.
- Proven Plan: Prior to the acquisition, 14 units were renovated and re-leased at higher rents. The current plan is to significantly expand this proven approach and accelerate renovations to generate even more cash flow and increase overall property value.
- Cash-on-Cash: The projected cash-on-cash return remains strong during the renovation period, approaching 10 percent in the second year. Once renovations are complete, the new units are expected to enable an even stronger cash-on-cash return throughout the holding period.
- Experienced Management: The deal sponsor is an affiliate of Robbins Electra, one of the fastest growing operators in the country. The key principal of the Property, Joseph Lubeck, is CEO and Co-Manager of Robbins Electra and has executed similar business plans with aggregate deal capitalization in excess of $3 billion since 1991.
Lago Paradiso is located 20 miles southwest of Miami’s Central Business District and South Beach. This helps to strengthen the demand for the Property. Key stats of the area:
- Miami and South Florida is base to more than 1,100 multinational corporations, including American Airlines, Cisco, Exxon, FedEx, Microsoft, Sony,