background-buildings-smartland-equity

Smartland $100M Opportunistic Fund - Northeast Ohio

Smartland $100M Opportunistic Fund

Offering Details



Type
Funds
Asset Hold Period
48 Months
Preferred Return
9.00%
Projected Rate Of Return
18.0%

Executive Summary

Smartland, LLC, founded in Cleveland, Ohio in 2013, has grown substantially to include a number of affiliates (collectively, “Smartland” or “the Smartland platform”) that provide a variety of services to the real estate industry and investors. These services include construction, property management, brokerage, marketing, architectural design, and investment management services, all of which now are provided to the multi-family residential space. Today, Smartland is an ecosystem-based, forward-thinking organization with over 140 team members that has achieved high returns on its investments due to its entrepreneurial, contrarian thinking and operational excellence. Smartland’s success is due in part to its process-oriented, expedited turnaround of investment properties, and strategic marketing for high tenant occupancy. This success also has been built with significant personal commitments from Smartland’s principals. Video: The Smartland Difference

  • Smartland Track Record:
    • $48,000,000 Equity Deployed
    • Currently $70M AUM ($90M existed AUM for a total of $160M AUM)
    • 22.35% Average Investor Returns past 5 years
    • 2.1X Multiple Return on Exited Funds
  • Fund Economics:
    • Target Fund Size: $100,000,000
    • Maximum Assets Purchased (with debt placed): $300,000,000
    • Projected Gain (including cash flow and increase in FMV): $112,000,000
    • Investor Projected IRR: 17.8%
    • Investor Projected Multiple: 1.9x (Based on 5-year hold)
    • Properties to be Purchased: 3,000+ Doors

Fund Strategy

Smartland is a heavy value-add operator that converts mismanaged C and D rated properties and into gorgeous B’s. There are very few to none in the markets. Midwest is FULL of vintage C and D inventory as well as AMPLE A’s to cover the market. Within 150 miles of NE Ohio, there are 1,200 properties and over 300,000 units that are part of 100+ unit properties and have a C or D rating in A, B or C rated areas. We provide tenants A-rated looking units that rent at 20-40% more than C’s and are ½+ the price of A’s in the area. Thus, this is where a lot of the value is created at a larger scale. Certainly, the number of potential deal-flow exponentiates as we continue to look at other opportunistic markets.

Why Now, Why Fund?

 

Why a fund vs. single asset deals (SAD)?

  • Complete trust of your owner/operator, fund manager partner (boots on the street)
  • Velocity and Power of cash
  • Once you have seen one of our disciplined underwritings, you have seen them all
  • Better investor terms: 9% pref, 80/20 to 15% and 70/30 after. Investors have the upside.
  • The top institutions in the world invest in funds for these same reasons

Why now if a downturn and/or recession is certainly coming?

  • Cash in hand for the next 5 years will allow us to buy assets at the downturn discounts.
  • Once our tenants upgrade from C/D rated properties to B and are highly unlikely to go back to a C/D product to save a few hundred dollars. However, we will be able to pull from tenants that are currently living in A’s that can save ½ the rent and still have units that look like A’s and still have the amenities they want
  • Domain expertise – we have made a conscious choice to bet on areas in the country that have growth and opportunities as well as where we have deep knowledge, connections, and control.
  • Our underwriting always has downturn analysis and every property has a downturn strategy that consists of lowering rents, lower expenses and change marketing strategies

In Conclusion

  • Let’s partner and join us on our journey to $1B AUM together!

Current Projects Under Contract 

  • 345 Multi-Family Units in Orlando, FL ($9.1M Equity) (downloadable file on the right side)
  • 144 Multi-Family Units in Garfield Hts, OH ($1.5M Equity) (downloadable file on the right side)
  • 100,000 Sq.ft. Multi-Use Cleveland, OH ($5.3M Equity, no debt, $4.7M grants) (downloadable file on the right side)

Contact