Biscayne 112

Biscayne 112 is a 402-unit, ground-up, multifamily development in North Miami, FL.


Biscayne 112

Biscayne 112 is a 402-unit, ground-up, multifamily development in North Miami, FL.

ArborCrowd Raise: $5.15MM
Total Capitalization: $103.8MM
Projected Net IRR: 16% - 19%
Projected Net Equity Multiple: 1.85x - 2.0x
Targeted Hold Period: 3 - 5 years
Investment Type: Equity
Minimum Investment: $35,000


Priority

Capital Stack

Sponsor Affiliate Equity
$29,114,641
28.0%
ArborCrowd Equity
$5,000,000
4.8%
Total Debt
$69,730,000
67.1%
Total
$103,844,641
100%


Project Overview


Biscayne 112

ArborCrowd is pleased to present the opportunity to own an equity interest in Biscayne 112, a Class A, ground-up, multifamily development in North Miami. ArborCrowd is seeking to raise $5.15 million in equity to invest in the expansion of Miami’s suburbs. The total capitalization of the project is $103.8 million. 

The Property

Once completed, Biscayne 112 will feature 402 units, comprised of a mix of one, two and three-bedroom apartments. Additionally, there will be approximately 40,000 square feet of amenity space, including a state-of-the-art fitness center, two swimming pools, an entertainment room, a lounge, zen gardens and a dog park. The property will also have 663 parking spots.

Strong Market Fundamentals

  • Population Growth: Within a 1-mile radius of the project, there was a 10.24% increase in the population between 2010 and 2018. The population is projected to grow another 5.91% by 2023.1

  • High Rentership/Low Supply: More than 55% of North Miami residents are renters2 and the vacancy rate of North Miami is less than 6%.3 Amid this high demand for rental housing, less than 200 units are projected to be completed each year from 2020 through 2023.3

  • Strong Employment: The Miami Metropolitan Statistical Area (“MSA”) is the gateway between the U.S. and Latin America and is home to various Fortune 500 companies. More than 1,400 multinational corporations have offices in the region and many are Latin American regional headquarters.4

1: ESRI 2: U.S. Census Bureau 3: CoStar 4: WorldCity, Inc. 

What We Like About the Deal

The project sits on one of the last large developable parcels in North Miami. It is expected to capitalize on the area's strong demand for quality apartments amid low supply of such units.

  • Cost Basis: The project’s total development cost is projected to be $258,320 per unit, while comparable finished projects within a 15-mile radius have sold for $282,269 per unit on average since 2012. This is due to the acquisition of the property at a favorable price as well as designing the project in a manner that allowed for an attractive per unit budgeted hard cost. (See Sales Comparables under Financial Analysis Section)

  • Well Located: The property is well situated in North Miami on Biscayne Boulevard, one of the greater Miami area’s main thoroughfares, providing easy access to shopping, entertainment and job centers. Additionally, due to a unique rear entry/exit, the property has easy access to I-95 and the Dolphin Expressway. It is also in close proximity to hotspots on Miami’s famed Collins Avenue.

  • Aligned Interests: Affiliates of AMAC Manager III LLC (the “Sponsor") have funded over 85% of the equity in the deal, which is over $29.1 million. The Sponsor is a member of The Arbor Family of Companies of which ArborCrowd is also a member.

  • Actively Under Construction: An ArborCrowd affiliate prefunded $5 million in the investment in June 2019. AMAC broke ground on Biscayne 112 in April 2019 and entered into a guaranteed maximum price construction contract. The construction loan closed on June 26, 2019.

Business Plan


The Sponsor expects construction of the 402-unit building and lease-up to occur within 3 years. The business plan is estimated to be completed by 2022- 2024.

Financial Analysis


Rent comparables are used to compare the underwritten income potential of the property with local market competition.

The list on this page contains a mix of renovated and newly constructed Class A properties that are expected to compete with Biscayne 112. As exhibited, the properties that have been built in the past few years command significantly higher rents than the renovations of older vintages. Biscayne 112’s underwritten rents are comparable to what is already being achieved in the local market. The Sponsor anticipates that the progression of Downtown’s growth northward will continue, and that the property’s rents are priced to capitalize on such growth.

1: Reflects achievable rents if units at the property were being leased when construction commenced. 2: Comparable rates were verified by ArborCrowd through market surveys as of October 2019. 3: Occupancy as of August 1, 2019. Update could not be obtained. 4: Lazul opened in November 2018 and is currently 89% occupied and 91% leased. 5: Occupancy as of May 7, 2019. Update could not be obtained. 6: The Shoreline at SoLē Mia opened in January 2019 and is currently 87% occupied and 96% leased.

Sales Comparables contrast the cost of the property and its projected sale price against sales of similar recent properties in the area.

The approach validates if the cost basis is at a discount to trades in the market and also provides insight on the potential viability of the business plan with a sale of the Property.

Biscayne 112’s development cost is $258,320 per unit while comparable finished projects within a 15-mile radius from the project have sold for $282,269 per unit on average since 2012.2

1: Transactions listed are sales of Class A apartments that ArborCrowd believes are similar to the expected finishes of the project and that are within a 15-mile radius of the project, have more than 100 units, were built after 2012, and have sold in the last 5 years. This list is not to be interpreted as an exhaustive list of every apartment property that has traded in Miami. 2: Real Capital Analytics, Cushman & Wakefield and CoStar

Market Overview


The Miami-Fort Lauderdale-West Palm Beach Metropolitan Statistical Area's (MSA) population growth has outpaced the national rate for almost a decade.

  • Population Growth Rate
    • The Miami MSA's population growth rate was 11.31% from 2010 to 2018, nearly double the national population growth pace of nearly 6% during that same period.1

  • MSA Population Rank
    • With approximately 6.2 million people, it is the 7th most populous MSA in the United States.1

  • High Concentration of Population
    • The MSA represents roughly 29% of the total population of Florida.1

1: U.S. Census Bureau 

2: ESRI

Driven by strong economic growth, the MSA’s household incomes have risen since 2010, while the unemployment rate is lower than the national rate.

Strong Employment:

  • The Miami MSA has 2,701,900 employed individuals as of June 2019.1

  • The MSA’s unemployment rate was 3.3% as of June 2019, which is lower than the national unemployment rate of 3.7%.1

  • From June 2009 to June 2019, the MSA saw more than 575,000 net new jobs added to its workforce.1

  • The median household income in Miami-Dade County, in which the project is located, is expected to increase 14.2% by 2023.2

  • The Miami metro area is the gateway between the U.S. and Latin America and is home to various Fortune 500 companies. More than 1,400 multinational corporations, such as American Airlines, Exxon, FedEx, Microsoft, Oracle, Sony, Visa and Walmart, have offices in the region and many are Latin American regional headquarters.3

1: U.S. Department of Labor 2: ESRI 3: WorldCity, Inc. 

 

Local Growth

The population within a 1-mile radius of the property is projected to grow 5.91% between 2018 and 2023.1

Recreation and Entertainment

North Miami, known locally as NoMi, is a culturally diverse community populated with an eclectic blend of restaurants that serve a wide range of authentic cuisines. It’s close to Aventura Mall, the third largest mall in the U.S. by retail square footage, and Oleta River State Park, Florida’s largest urban park.2

Education Hub

North Miami is a hub for higher education with institutions such as Florida International University’s Biscayne Bay Campus, Johnson & Wales University – North Miami and Barry University located in the immediate area, which serve more than 15,000 students combined.3

Area Development

SoLē Mia is a Class A, 184-acre mixed-use development that is well underway. The 12-tower complex will be predominantly condominiums and comprised of more than 4,390 units.4 SoLē Mia is expected to generate 14,000 short and long-term jobs, and have 220,000 square feet of office space, and more than 673,900 square feet of retail and entertainment space.5

1: ESRI
2: Florida Department of Environmental Protection
3: Barry University, Florida International University, and Johnson & Wales University enrollment statistics.
4: CoStar
5: City of North Miami
6: U.S. Census Bureau
7: US News & World Report about Miami-Dade County Public Schools 8: Linetec
9: WorldAtlas: Largest Malls in the United States

Sponsor and Manager


ArborCrowd is the first real estate crowdfunding platform to be launched by a real estate institution, opening an exclusive network to a new class of investors.

As part of The Arbor Family of Companies, which includes Arbor Realty Trust (NYSE: ABR), a leading publicly traded commercial mortgage real estate investment trust, ArborCrowd is backed by more than 30 years of leadership experience.

The Difference

ArborCrowd’s model is unlike any other — deals are offered one at a time with robust offering materials. ArborCrowd doesn’t pool investor’s funds into deals without first evaluating the underlying assets. ArborCrowd has created a better way to invest in which investors know exactly where their money is going.

The Synergies

ArborCrowd is part of The Arbor Family of Companies, which along with Arbor Realty Trust, includes Arbor Commercial Mortgage, and Arbor Management Acquisition Company ("AMAC"), a full-service real estate investment and operating firm. The family of companies was established to create a real estate ecosystem that capitalizes on over three decades of experience. ArborCrowd leverages it to curate high-quality deals for investors.

Experience Matters
The Biscayne 112 development team is comprised of well-qualified and accomplished institutions with backgrounds in designing, building and managing ground-up, multifamily properties.

Asset Manager: ArborCrowd

The ArborCrowd Asset Management team has already started working with the Sponsor on this project and will continue to oversee the deal’s progress on behalf of investors until the business plan has been completed.


Ivan Kaufman | Co-Founder & CEO

Ivan Kaufman is a Co-Founder and the CEO of ArborCrowd. He is also the Chairman and CEO of Arbor Management Acquisition Company
("AMAC").

Kaufman has extensive experience operating a diverse array of real estate finance companies that spans four decades and numerous real estate cycles. He is currently the Founder, Chairman, President and CEO of Arbor Realty Trust, Inc. (NYSE: ABR), a leading multifamily and commercial real estate lender and real estate investment trust that became publicly traded in April 2004.

In addition, Kaufman is the Founder and CEO of Arbor Commercial Mortgage, LLC, a multifamily finance company he established in 1995. In 2016, Arbor Realty Trust formally acquired the agency lending platform of Arbor Commercial Mortgage.


Adam Kaufman | Co-Founder & COO

Adam Kaufman is a Co-Founder and the COO of ArborCrowd. In this role, he oversees ArborCrowd’s corporate growth strategy.

Following the legalization of general solicitation by the JOBS Act of 2012, Adam recognized early on there was an opportunity to create a platform to give individuals who previously never had the opportunity to invest
in institutional real estate transactions access to those deals. He formed ArborCrowd as a member of The Arbor Family of Companies to allow a new class of investors to participate in the same deals that an experienced real estate organization does.

Recently, Adam was a recipient of Commercial Property Executives "Stars to Watch" and REFI US' "Rising Stars" awards. In 2018, Adam was selected to Commercial Observer’s “Top 25 Debt and Equity Professionals Under 35.” He was named to New York Real Estate Journal’s “Ones to Watch” list in 2018 and 2019. He is a Forbes Real Estate Council member and has spoken at various prestigious institutions, including The Wharton School, Harvard University and Columbia Business School. Adam is a graduate of the University of Pennsylvania, who has served within the U.S. Senate Committee on Foreign Relations.


Maurice Kaufman | Co-Founder

Maurice Kaufman is a Co-Founder of ArborCrowd. He is also a Co-Founder and Principal of Arbor Management Acquisition Company ("AMAC"), in which he oversees all facets of the company, including acquisitions, business development, asset management and investor relations.

Under his leadership, the AMAC team has built an international investor community and closed two funds that have acquired more than 5,500 multifamily units.

Prior to joining AMAC, Mr. Kaufman was a Senior Analyst at Long Pond Capital, a real estate dedicated hedge fund, where he was responsible for investing in companies that were involved in all sectors of the real estate industry both nationally and internationally.

Mr. Kaufman received a Bachelor of Science degree in Economics from The Wharton School of Business at the University of Pennsylvania.

Arbor Management Acquisition Company, LLC ("AMAC"), together with its subsidiaries and affiliates, is a full-service commercial real estate investment and operating firm based in New York. Founded in 2012 by Arbor Realty Trust and ArborCrowd CEO Ivan Kaufman, and by Fred Weber and Maurice Kaufman, the firm has acquired over 8,000 multifamily units within diverse primary and secondary markets nationwide.

AMAC has experience across all types of real estate investment strategies. AMAC and its affiliates, currently own or operate over 5,000 multifamily units. AMAC’s key principals have led the teams that have acquired multifamily properties with a total deal capitalization in excess of $1.07 billion. AMAC has delivered an average deal IRR of 55% in past realized projects. This is the fourth deal that AMAC and ArborCrowd have done together.


Greystar1 is the largest apartment operator in the United States, managing a portfolio of
more than 450,000 units.2

Since Greystar Chief Executive Officer and Chairman Bob Faith founded the company in 1993, it has been solely focused on the multifamily sector. Today, Greystar has a team of approximately 14,000 employees in more than 180 markets globally and it oversees an estimated $115 billion worth of real estate. In South Florida, the company manages 41 properties comprised of 10,549 units.

Greystar’s national platform provides economies of scale, financial sophistication and institutional-quality reporting services for its clients. Greystar is able to quickly understand and adapt to changing market dynamics with local experts in nearly 500 cities across the country.

1: Anticipated property manager

2: National Multifamily Housing Council

Located in Miami, Delant is known for completing highly complex projects on time and on budget. Over their 37-year history, they have delivered large-scale projects amid adverse economic conditions, environmental obstacles, and scheduling constraints.

  • Founded in 1982. Provides a suite of construction services for developers in South Florida.

  • Extensive experience building mid- and high-rise luxury residential properties, as well as other asset classes.

  • Completed or currently constructing 64 housing projects with more than 7,000 units.
Priority

Capital Stack

Sponsor Affiliate Equity
$29,114,641
28.0%
ArborCrowd Equity
$5,000,000
4.8%
Total Debt
$69,730,000
67.1%
Total
$103,844,641
100%