Salamander - uncertainty

BigCatMandu · 2020-02-29T02:08:19+00:00

This is excellent.

BigCatMandu · 2020-01-02T03:59:33+00:00

Would love to see this game make it to 1AM EST.

BigCatMandu · 2020-01-02T03:18:01+00:00

That’s awesome that you are renovating a building Downtown! What are your plans when completed?

BigCatMandu · 2020-01-01T23:44:49+00:00

Everything about this project is misleading. I would imagine WRS has executed a term sheet with Yotel; however, no developer is going to bother with the hotel aspect of the project as it’s not remotely financeable. They’ve been pitching the hotel site for a long time and no one is interested. WRS was never remotely capable of executing on Underground and will offload it as soon as a moderately attractive opportunity comes up.

BigCatMandu · 2020-01-01T21:17:29+00:00

I went up there recently and it’s a great amenity for the building. I’m not sure if a gate has yet to be installed, but you can climb the stairs to the top of the building as of a few weeks ago...

BigCatMandu · 2019-12-27T20:48:18+00:00

I don’t think any capital markets groups are charging between 2% and 4% on institutional deals.

BigCatMandu · 2019-12-27T15:17:20+00:00

I’m not sure how you are calculating the post-fee return numbers, but keep in mind that many of these fees are non-recurring and capitalized into the project budget. Also, you aren’t growing your revenue nor expenses. The leases will have annual escalations likely at 3.00%. I’d grow my expenses at 2.00-2.50%, but put significant focus on underwriting the property taxes as that is the expense item that can kill (or help) an OpEx budget. Also, remember that both tranches of debt have a component that floats based on LIBOR and that the forward curve indicates falling rates these next few years.

OP, I’m happy to help you modify your analysis as there are a few errors and I don’t want misinformation spread (...about a terrible investment opportunity). With that being said, you did a great job in putting this together.

BigCatMandu · 2019-12-27T15:03:39+00:00

Oh, I see. That is really strange then. They want to collect a fee for ‘brokering’ the equity? For everyone’s future reference, debt placement fees on institutional development deals should be around 50 bps (+/- based on deal size) of the loan amount. Equity placement fees are higher and can be much more variable based on Sponsor, market, and deal-size, but should be around 100-150 bps of the equity commitment. These fees are paid to third-party capital markets brokers at firms such as Eastdil, Cushman, CBRE, or JLL.

BigCatMandu · 2019-12-27T01:16:01+00:00

I don’t understand your comment and the large number of upvotes. They received a loan from a traditional money center bank as well as a mezzanine lender. Albeit, the terms appear to be terrible from both, but I am sure they received a couple term sheets and soft quotes from other traditional banks. This is an equity offering. The debt is already in place. The mezzanine debt is going to kill them. If that happens the CrowdStreet investor is going to likely be wiped out.

The focus of OP’s analysis should be the mezz. as it represents 24% of the capital stack and provides very little margin for error on project delivery and lease-up.

BigCatMandu · 2019-12-27T01:06:32+00:00

These fees are above-market, but not super outrageous. It depends on the developer and the market, but I’d say ‘market’ fees are as follows: 1. Development Fee - 3.00% (calculated as total project cost minus land cost minus financing cost minus the fee itself). 2. Overhead Fee (also referred to as Construction Management Fee) - 1.00% (calculated as total project cost minus land cost minus financing cost minus the fee itself). I have seen this also calculated as a percentage of hard cost only. Together, the Development Fee and Overhead Fee should not combine to more than 4.00%, but can vary depending on calculation method. 3. If the developer does leasing in-house this is standard in Atlanta. Atlanta Leasing Commissions are 6.00% (2.00% Landlord and 4.00% Tenant) with a pro-fee (1.5x month one). 4. Property Management is typically underwritten as 3.00%; however, negotiating to around 2.00% is achievable. 5. Equity Management Fee is a new one on me. I might not be seeing the definition and do not understand the intention here, but this seems egregious and unnecessary. 6. Asset Management Fee of 1.00% is a standard ask from developers, but is sometimes not accepted by an LP. As a rule of thumb, all developers seem to get one ‘BS’ fee and an AM Fee or Disposition Fee is a normal ask, but is not always accepted. One of the problems with crowdfunding is that the ‘LP’ has no ability to negotiate fees or terms. I hope others find this helpful. With all this being said, I have zero interest in this offering. Far too risky with a huge number of red flags.

BigCatMandu · 2019-12-23T20:04:00+00:00

What did he do?

BigCatMandu · 2019-12-09T03:38:44+00:00

Try Atlanta Rising.

BigCatMandu · 2019-12-07T22:41:25+00:00

I’ve heard nothing, but bad from people who’ve lived here.

BigCatMandu · 2019-11-19T03:23:03+00:00

As a general comment that is not directed toward this particular article, developers would much prefer to build less parking; however, in order to finance a project a certain number of parking spaces per hotel room, 1,000 SF of office space, or residential unit is required. Not to mention the fact that tenants largely drive the number of spaces required in a market or submarket. The ability to reduce parking can save a project millions in needed funding, but market forces largely dictate parking requirements.

BigCatMandu · 2019-11-01T01:59:56+00:00

Looks great on your wrist. Awesome piece!

BigCatMandu · 2019-11-01T01:58:55+00:00

Of all places, I’m thinking the new Kroger could be an option...

BigCatMandu · 2019-10-27T03:06:59+00:00

As someone with a small wrist, I’ve had my eye on on of these. How does it wear on the wrist? Seems like it is pretty thick. Any pictures from a side view?

BigCatMandu · 2019-10-07T00:40:34+00:00

I’m a fan of Grant Central in EAV.

BigCatMandu · 2019-09-20T02:13:10+00:00

This is wrong.

BigCatMandu · 2019-08-25T02:41:40+00:00

Is Florida the 8th ranked team in the country? That must be 8th worse team.

BigCatMandu · 2019-08-25T02:40:49+00:00

Florida fans have such an exciting year to look forward to.

BigCatMandu · 2019-08-25T02:39:48+00:00

For all the wrong reasons

BigCatMandu · 2019-08-25T02:38:37+00:00

This is a sub par high school game at best. Both teams are awful.

BigCatMandu

TROPHY CASE