South Florida – Bay Area Investor Social Club partners with members to represent real estate deals along with the organization’s real estate deals.

LEARN ABOUT OUR DEALS

We have JV deals, syndications, REIT’s, off-market deals, and other real estate complex deals that are worth reading about!

Project Summary:

We are excited to present an opportunity to invest in a Diversified Hospital Healthcare Fund together with our experienced Partner Team

We are pleased to present a new deal which is a 5th fund and 22nd sponsored investment partnership, which will invest in a diversified portfolio of high-quality medical office buildings (MOB’s), behavioral health facilities, in-patient physical rehabilitation hospitals (IRF’s), Ambulatory Surgery Centers (ASC’s), medical specialty facilities and other healthcare-related investments.

Strong Sponsor with Outstanding Track Record:

Specializing in Healthcare real estate, our Partners work with healthcare systems, cities, large medical groups, and regional healthcare companies to provide solutions in on and off campus medical building development. The group’s track record exemplifies its strong execution of projects, resulting in an average 53.73% IRR and 3.01 equity multiple on its realized deals.

Historically Consistent through Market Cycles with Strong Driver of Growth

Due to the necessity of their purpose, medical buildings have historically maintained consistent performance throughout market cycles. In fact, healthcare-related properties were one of the only sectors to actually see an increase in asset values per Green Street’s Commercial Property Price Index released in June 2022. Adding to the sector’s resilience, the industry is seeing new heights of demand driven by the aging Baby Boomer demographic.

Orlando/Tampa Opportunity

According to Census data, the first Baby Boomers reached 65 years old in 2011 and between 2010 and 2020, this aged 65+ population grew by more than 30% and currently at about 70 million people with 10,000 people retiring each day. Add to this that Americans spend more than twice as much on health care per person than their peers in developed nations, and data suggests that demand for medical services will continue to surge (John Hopkins Bloomberg School of Public Health).

Enhanced Credit of Key Tenant Could Boost Sales Value

One of the primary tenants for the Fund’s investments, was recently acquired and recapitalized by private equity firm, Webster Equity Partners, which invests in middle market operating companies with strong market positions. Webster Equity Partners’ joint venture operating partnerships with healthcare systems can often enhance the credit profiles of the healthcare providers, in this situation, the tenant. Ultimately, an enhancement of credit profile can benefit the underwriting for projects as, among other factors, tenant credit profiles are a key consideration in asset valuations.

Necessity – Consumers may pull back on dining and entertainment, travel spending in the event of a downturn, but a bothersome toothache or a broken arm will still need to be treated.
Growing Demand The demand for healthcare services is not going away. In fact, it is set to increase as Baby Boomers. This demographic is 75 million strong, with more than 10,000 Boomers retiring each day, according to Pew Research. The field of healthcare may tout long-term value potential as the Boomer population continues to age and the costs associated with healthcare continue to expand.
Long Term Leases – Triple Net Leases with built in annual increases and corporate guarantees
Top Locations: Orlando, Tampa, Oklahoma City.
Lastly its very Low Risk – given the resiliency of the sector. This is evidenced by the sector’s strong rent collections that have exceeded 95 percent even during the depths of the pandemic. With patients continuing to seek care, despite economic uncertainties, the majority of MOB tenants were able to make on-time rent payments.

MARKET OPPORTUNITY

The financial performance with respect to medical office buildings, behavioral health facilities, in-patient physical rehabilitation hospitals, medical specialty facilities, ambulatory surgery centers, and other medical facilities represents an attractive investment opportunity, as healthcare-related real estate and its underlying medical operations have performed consistently throughout the recent economic cycles.

PROJECTED RETURNS FOR 5 YEAR HOLD:

Projected Annual IRR: 18-20%
Pref Rate: 8%
Projected Equity Multiple: 2x+
Min Investment for new investors: $75,000
Max Investment: $500,000

$100,000 Investment projected to return $200,000 in year 5

This is 506(c) offering Accredited Investors only,

Accreditation letter from CPA, Attorney or third party verification company: https://verifyinvestor.com/ must be submitted in order to invest.

Call us at 954-932-1431

Project Summary:
18-22 Sanchez San Francisco is a historic Edwardian six (6) unit apartment building centrally located in the Duboce Triangle district of San Francisco. The unit mix in the building consists of five (5) three bedrooms and one (1) two bedroom apartment with 2 car parking. The project is conveniently located one block from Duboce Park, walking distance to Castro shops, restaurants, and right next to Market Street public transportation.

Purchase Price: $3.4M
Rehab Budget: $1.8M
As-Is Value: $8.517M
After Repair Value: $14.4M
Loan Request: 15% return in 12 months
Ocean Avenue is seeking a 2nd position deed of trust loan for $1,500,000 and will be repaying the loan +15% fixed return ($225,000) for a total of $1,725,000. The loan will be secured with a deed of trust and note recorded with the City of San Francisco County recorder’s office, due and payable in 12 months (or sooner).

Project Background:
Duboce Triangle typically does not have a lot of inventory for sale and it is one of the hottest in demand districts in San Francisco. As such, when a unit becomes available it typically sells in less than 30 days and for 10+% over list price. The average condominium/TIC sells for $1,000-$1,200 per sqft. Tenant in Common (TIC) unit sales are easier to qualify for because the price points are generally lower than single family homes making the down payment/mortgage requirements easier to manage, interest rates are generally competitive with condo pricing without the high monthly HOA costs, allowing for easier financing for qualified buyers.

18-22 Sanchez San Francisco

(2) TIC Agreement: any TIC purchase from a buyer must include a TIC agreement that stipulates the respective new and existing owners equitable ownership, rules, and rights / Provided by Lyssa Paul, Esq COMPLETED

(3) Building Remodel: each unit will need to be remodeled with an open floor plan layout and high-end rental finishes to maximize the unit’s desirability / Provided by Ashbury Construction

(4) TIC Public Report: any 6+ multifamily building owner seeking TIC conversion needs to prepare a TIC Public Report Application to file with the Department of Real Estate (1 month to draft, 4-5 months for approval) / Provided by California Builder Services COMPLETED

(5) Tenant Buyout: the remaining tenants would need to be bought out of their lease, the cost typically run between $85-125K. Once the buyout negotiations are concluded, a tenant buyout agreement would need to be drafted and executed / Provided by Thomas J Lalanne

Project Strategy: we will start the tenant buyout negotiations and over-the-counter permitting of our architectural & structural plans for the existing units and two new additional units on Day 1 after our close of escrow. Once the plans are approved, we will begin the remodeling of each unit in parallel to waiting for the tenant buyout negotiation to conclude. As the units on each floor are completed they will then be sold one floor at at time, starting with the top floor premium units to set the benchmark for sale comparables.
Exit Strategy: 12 Months

(1) Sale of 8 Individual TIC Units: we will immediately sell each unit once the project requirements are met. The TIC sale will be listed with a top 1% SF realtor to maximize the potential sales price.

Timeline: 365 days
– 240 days to complete the remodel of each unit, complete tenant buyouts
– 30 days to market the units
– 30 days to close escrow

(2) Refinance of 8 Multifamily Building or 8 Individual TIC Units: as an alternative and driven mostly because of the built-in equity and Loan-to-Value, we will be able to refinance the existing debt and pay-off the entire capital stack

Timeline: 365 days
– 240 days to complete the remodel of each unit, complete tenant buyouts
– 30 days to market the units
– 30 days to close escrow

Current Status:
Our close of escrow is scheduled soon. Please feel free to reach out with any questions and or drop box documents.

Project Opportunity:
This project presents itself as an opportunity to sell each unit, individually, as a Tenant in Common (TIC). Individual TIC sales within commercial multifamily buildings in Duboce Triangle generally command $1,000 per sqft without a garage, with a light remodel, and delivered vacant. 18-22 Sanchez has 8,530 sqft with 2,600 additional sqft that will be recaptured through the addition of two additional units. This will bring the total unit count to eight (8) units that will be sold individually as TIC’s. The building has four vacant units. The project has already secured the approvals for subdividing each unit into TIC’s. We plan to buyout the remaining two tenants from their leases, develop two additional ground floor units, and remodel each unit with ‘high-end rental finishes’ matching TIC unit expectations.

Project Requirements:
(1) Recapturing Living Space: in order to recapture add the additional two units and remodel the existing 6 units, an ‘as-built’ plan and a proposed architectural & structural plan need to be approved over the counter by the San Francisco Planning & Building Department / Provided by ICE DESIGN.

If interested in joining in on this unique opportunity in San Francisco please reach out to us at the earliest convenenience for a zoom call to further discuss the project and real estate opportunity. South Florida Investor Social Club represents it’s deals along with it’s members and partner’s deals on a weekly and monthly basis.