Solo 401K, SD-IRA, QRP
506c for Accredited Investors only
Preferred Equity (PE) Investment Highlights
Higher Cash Flow With Lower Risk
Short-term investment with significantly reduced risk compared to common equity in a value-add multifamily project.
Preferred Returns
Pref equity is higher in the capital stack. All $27M in LP equity would have to be lost for PE investors to lose money or cash flow.
Why PE Is Needed
The lender is requiring additional funds to be added to rebalance and slightly reduce the construction loan, creating the opportunity for pref equity.
15 - 17% Pref Equity Opportunity Investor KIT
The Deck / Investment Summary
The FAQ Document
The Investor Docs Kit
The investor presentation
IMPORTANT NOTE: We are raising the pref equity in tranches. The first tranche is expected to go quickly given investor demand for preferred equity with it’s higher returns and lower risk. New investors will be accepted on a first come first serve basis.
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Where should we send your 15 - 17% Pref Equity Opportunity- Investor Kit Access?
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Short-Term Preferred Equity Returns (Per Year)
15 -17%
Annualized returns: split between cashflow and return on PE exit
7-8%
Annualized Cash Flow from Day 1
8-9%
Annualized Profit on PE exit
$100k
Minimum Investment
The Unique Benefits of Pref Equity
Why This Pref Equity Opportunity is One of our Lowest Risk Offers Yet
Safer Than LP Equity
The Pref Equity is senior to ~$27M of LP equity and has priority for both equity and cash flow
Short-Term Investment Timeframe
~2 year investment timeline with high annualized interest returns
Immediate Guaranteed Cash Flow
Pref Equity quarterly cash flow starts immediately, and has priority over regular equity
Located in an Ultra-High Growth Market
Maricopa County is the 4th fastest growing county in the U.S. and Phoenix-Mesa was ranked #2 best multifamily market in 2024 by Berkadia
Brand New Class A Apartment Community
This property is a highly desirable Class A asset in a great location near tons of amenities
Pref equity is ideal for investors looking for lower risk and predictable returns. It is also a great fit for investing through retirement accounts which are ineligible for depreciation/losses.
Project History | The Story of The Falls
The project originated in 2020 when our highly experienced development partners, Overland Group, secured a contract for the land and embarked on pre-construction activities to build 324 units with 331,720 total rentable SF. Major milestones include:
2020: Initial Contract and Planning
2021: Official Approvals
Planning commission and Avondale City Council approvals
2022: Permitting and Financing
Building permits secured and construction loan obtained
2023 & 2024: Construction in Progress
2025: All buildings projected to complete
Greg M., Grocapitus Investor
Our Top Ranked County and Metro
To truly grasp why Avondale is considered a trophy property, you need to step back and appreciate its exceptionally prime location. Maricopa County is the 4th fastest growing county in the U.S. after leading the nation for 3 consecutive years. This incredible feat, and its many other accolades, showcases the region’s attractiveness, bolstered by a favorable climate, robust economy, and high quality of life.
#1 Population Growth, Maricopa County
Census, 2023
#1 Best Cities for Retirement, Scottsdale
Niche, 2024
#1 Top Markets for Talent Attraction, Maricopa County
Lightcast, 2023
#1 Best Airport in the U.S., Sky Harbor Airport
Wall Street Journal, 2024
#4 Largest County in the U.S., Maricopa County
Census, 2023
#1 Manufacturing Growth, Phoenix
Newmark study, 2024
This is a high-quality high growth metro that is evolving into a technology and services powerhouse.
Phoenix-Mesa Housing and Multifamily Markets
In the Phoenix-Mesa region, the astounding mismatch between housing availability and population demand presents a compelling case for investment in multifamily properties.
An analysis by Hines from January 2024 indicates the area is facing a shortfall of approximately 120,000 homes, which is ~6.5% of its total housing inventory.
#2 Best Multifamily Market in in 2024
Thanks to strong recent population and employment growth, a rise in supply and demand, Berkadia forecasts Phoenix-Mesa will earn the second spot in the nation this year.
As a result of the housing shortfall, there is a compelling case for multifamily to fulfill this gap and cater to the region’s housing needs.
Existing housing units relative to population demand in the Phoenix metro area
Annually; 1982-2022
15 - 17% Pref Equity Opportunity Investor KIT
The Deck / Investment Summary
The FAQ Document
The Investor Docs Kit
The investor presentation
IMPORTANT NOTE: We are raising the pref equity in tranches. The first tranche is expected to go quickly given investor demand for preferred equity with it’s higher returns and lower risk. New investors will be accepted on a first come first serve basis.
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Where should we send your 15 - 17% Pref Equity Opportunity- Investor Kit Access?
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Why is Pref Equity Needed?
We are coming up on a loan extension period with our lender, who is amenable to a 1-year extension, which was part of the original loan documents and covers the time needed to complete construction.
However, they are requiring the loan to be rebalanced due to lower multifamily property values nationwide. To reduce the LTV to an acceptable level, the bank is reducing the amount of the loan. They are also requiring us to add interest reserves.
As a result, we are raising $4.5M in pref equity in small tranches between now and the end of May. We are only raising $2M over the next two tranches and given the strong demand from investors for lower risk pref equity offerings like this one, we anticipate adding investors to a waiting list for future tranches.
The preferred equity is projected to be paid back when we complete construction and refinance the construction loan into a mini-perm loan, or when we complete leasing and stabilization and sell this trophy property.
Project Timeline
Avondale construction is 65% complete, with the four-way inspection on the Clubhouse and Building C 100% complete. The construction site is bustling with workers and activity, racing towards big milestones in 2025:
Q1 / Q2 2025
- Pre-leasing begins in January
- Phase 1 projected completion: The clubhouse, pool and the first building
- Leasing begins with TCO on Building C and the clubhouse
Q3 2025
Construction of the entire projected is scheduled to complete.
– Jay C
How the Pref Equity Works
The Pref Equity class is a new equity tier that is senior to current shares. Therefore, your investment has a huge $27M cushion, reducing your risk.
Pref Equity Investors Receive:
15 – 17% annualized interest, sitting above common equity in the capital stack
7 – 8% annualized cash flow distributions starting immediately, distributed on a quarterly basis.
8 – 9% annualized back-end return when the preferred equity is projected to be paid back when we complete construction and refinance the construction loan into a mini-perm loan, or we complete leasing and stabilization and sell this trophy property.
Benefits for Pref Equity Investors
Although the upside is capped for new Pref Equity investors, there are many benefits that make it a great choice for many investors:
It is higher in the capital stack and is paid back PRIOR to any regular equity getting paid, giving it a lower risk profile.
Pref Equity investors receive their cash flow prior to any regular equity cash flow
This Pref Equity investment is an outstanding opportunity to profit from an outstanding Class A apartment community that has faced higher costs due to unprecedented market conditions. We are very optimistic about our projected plan to return preferred equity capital and back end profits in ~24 months.
This is an unusual chance to join us in a short-term lower risk, higher cash flow investment in one of our flagship construction projects.
15 - 17% Pref Equity Opportunity Investor KIT
The Deck / Investment Summary
The FAQ Document
The Investor Docs Kit
The investor presentation
IMPORTANT NOTE: We are raising the pref equity in tranches. The first tranche is expected to go quickly given investor demand for preferred equity with it’s higher returns and lower risk. New investors will be accepted on a first come first serve basis.
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Where should we send your 15 - 17% Pref Equity Opportunity- Investor Kit Access?
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
The Avondale Commons Management Team
Neal Bawa
Grocapitus
CEO & Founder
Anna Myers
Grocapitus
COO & General Partner
Ken Holman
Overland Group
CEO
Dave Holman
Overland Group
President of Construction
Michael Holman
Overland Group
VP, Development and Finance
Overland Group: A Fully Integrated Real Estate Company
Our stellar partner on Avondale is Overland Group. Started by Ken Holman, and now driven forward by his two sons, Michael and Dave, they are ethical, hard-working, and creative. They are dream partners for us to have, which is why Avondale is our 3rd partnership with them.
Developments
30+ years in high-quality real estate development
Actively Manages
office, industrial, retail, multifamily, hotel, and healthcare properties
The Falls at Crismon Commons
The Falls is our second project with Overland. It is a gorgeous 240 unit modern apartment community with an iconic high ceiling clubhouse, a large amenity and pool area, gym, movie theater, and underground parking for sweltering summer days.
This project, only 45 miles from Avondale, is over 45% leased, with happy residents moving in every week.
Asset Living: Industry-Leading Property Management
Asset Living is a true third-party property management firm with decades of experience delivering exceptional value to partners across the nation and is a recognized industry leader. They have won many accolades, including NMHCs number one property manager for multifamily award. With management of over 200,000 units, we have confidence in their ability to lease up quickly.
37+ Years of Experience
125,000+ Beds Under Management
200,000+ Units Under Management
#1 NMHC's Top 50 Manager For Multifamily
15 - 17% Pref Equity Opportunity Investor KIT
The Deck / Investment Summary
The FAQ Document
The Investor Docs Kit
The investor presentation
IMPORTANT NOTE: We are raising the pref equity in tranches. The first tranche is expected to go quickly given investor demand for preferred equity with it’s higher returns and lower risk. New investors will be accepted on a first come first serve basis.
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Where should we send your 15 - 17% Pref Equity Opportunity- Investor Kit Access?
An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior 2 years and reasonably expects the same for the current year,
OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person's primary residence).
Munaf K., Grocapitus Investor
This material does not constitute an offer or a solicitation to purchase securities. An offer can only be made by the Private Placement Memorandum (PPM).The PPM and its exhibits contain complete information about the Property and the investment opportunity. The information contained herein is not a substitute for an investor’s complete review of all of the information attached to the PPM as part of their own due diligence regarding this investment opportunity and its suitability for their investment portfolio.
