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…strategic partnering of expertise and capital




                                           1
   Singular focus

   Deal in Southern California residential projects only
     Urban, coastal locations of proven con...
 Gary Pundsack [CEO] Former corporate land development
  executive in charge of large-scale community development
  & lan...
   Carter Froelich [Managing Principal, Development Planning and Financial Group]

   Geoff Appleyard [Principal], Devel...
5
   Extensive and relevant residential development, marketing &
    sales experience

   Insider knowledge of the homebui...
• Capital
Vested Interest
                  • Reputations


                  • Deep-rooted
Commitment        • Historical...
   Sweet spot is $10-50 million all-in acquisition cost

   Maximum purchase price for a single asset: $25 million

   ...
CREP                        Capital Partner
   Project sourcing                 Project review
   Market positioning re...
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Presentation Crep Company Value To Capital Partner 04.23.10

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The advantages of investing in real estate with CRE Partners

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Presentation Crep Company Value To Capital Partner 04.23.10

  1. 1. …strategic partnering of expertise and capital 1
  2. 2.  Singular focus  Deal in Southern California residential projects only  Urban, coastal locations of proven consumer preference  Partially completed condominium or mixed-use projects  Completed ghost projects [vacant]  Fractured projects [with prior leasing or sales]  Careful selection of projects expected to yield large ROI’s  Project positioning based on today and tomorrow’s real market-driven demand, timing and pricing…not yesterdays  Buy in partnership with a capital partner  Add value / Lease today / Sell tomorrow / Sell today 2
  3. 3.  Gary Pundsack [CEO] Former corporate land development executive in charge of large-scale community development & land sales to new home builders; founder of various home building industry related ventures; and licensed real estate broker.  Bruce Keim [Chief Operating Officer] Former oil company real estate development executive in charge of community development; title insurance company founder and owner; licensed general contractor and real estate broker.  Rob Olson [Chief Marketing Officer] Former owner and founder of a regional residential sales and marketing company that served the new home building industry across all property types; active in various industry trade associations; and licensed real estate broker. 3
  4. 4.  Carter Froelich [Managing Principal, Development Planning and Financial Group]  Geoff Appleyard [Principal], Development Planning & Financial Group]  Jim Zemezonak & Frank Demeter [Principals, Boulders Realty Advisors]  Gary Dubrock [Principal, Collier Company-Western Region]  Stanley Paul Cook [Former regional market researcher, consultant & demographer]  Len Orme, Jr. {Formerly with OZ Architecture in charge of resort design]  Joseph Thompson [Former National Vice-President, Beazer Homes]  John Michell [Former Regional President, Centex Homes]  John Pew [Former Regional CEO, Golden Heritage Homes]  Brady Bartlett [Former Division President & CFO, Beazer Homes]  Bob Frank [CEO & President, Frank Residential]  Brett Butler [Former Director of Sales & Marketing, Optima Corp.]  Others [unnamed for privacy considerations] 4
  5. 5. 5
  6. 6.  Extensive and relevant residential development, marketing & sales experience  Insider knowledge of the homebuilding industry  Multiple markets’ knowledge and experience  National network of industry intelligence in place  Board Room presentation skills  Institutional quality underwriting  Transparent financial reporting  Personally committed, honest & forthright 6
  7. 7. • Capital Vested Interest • Reputations • Deep-rooted Commitment • Historical precedent • The challenge Satisfaction • Winning • Earned Profits • Shared 7
  8. 8.  Sweet spot is $10-50 million all-in acquisition cost  Maximum purchase price for a single asset: $25 million  Minimum purchase price: $5 million  Maximum whole dollars return  Unleveraged IRR minimum: +-25%  2-5 year investment window  Total 2010 investments expected to be $75-100 million 9
  9. 9. CREP Capital Partner  Project sourcing  Project review  Market positioning review /  Terms sheet to CREP plan  Purchase contract review  Initial due diligence  Earnest money deposit  Project pro forma  Secondary due diligence  Operating budget  Presentation to capital partner for review Together Purchase contract Escrow opening Due diligence completion COE 10
  10. 10. CREP Capital Partner  Provides 5-10% of overall  Provides 90-95% of overall capitalization capitalization  Receives a promote fee  Receives a promote fee upon acquisition upon acquisition  Receives a management  Can receive an exit fee fee over ownership term upon disposition  May receive an exit fee upon disposition Together Preferential return paid on invested capital before distributions Capital partner receives the majority of profit distributions 11
  11. 11.  Plan in place before acquisition—lease and/or sale  Replacing the equity invested with debt upon leasing income stabilization and deferring the sale decision  Ownership / disposition choices include:  Flipping the project following acquisition  Retaining project ownership for the long-term value of the income stream [hold]  Selling the project to others, as a rental project, after income stabilization [wholesale bulk sale]  Selling the project at retail to home buyers immediately [individual unit sales--no lease-up]  Selling the project at retail to home buyers following lease- up and income stabilization [individual unit sales] 12
  12. 12. CREP is seeking a capital partner who is willing to :  Enter into an agreement with CREP setting forth some of the identical deal points that apply to each transaction  Allow CREP to represent to project sellers its association with the capital partner so as to lend credibility to the acquisition process  Promptly evaluate CREP recommended acquisitions and provide:  The earnest money deposit[s] for each  A terms letter agreement unique to each acquisition  The capital commitment to close acquisitions; and  The necessary capital to cover an acquisition’s costs of ownership and/or development 13
  13. 13. In closing, when it comes to dealing with residential-driven real estate…  We are principals.  We know what to do.  We know how to do it.  We know how to make money doing it. 14

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