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Newest Acquisition

Denver, CO

Denver (Edgewater) 54 Unit Class C Off-Market Apartment Complex  Ingall's Grove

Closed: 1/29/21

Purchase Price: $8,800,000

Equity Raise:  $2,755,000

Hold Period: 5 to 7 Years

IRR Target: 20%+

Equity Multiple Target: 2.5x+

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Cross Mountain Capital, the Sponsor, and Offerd, have purchased 54 unit, Class C multi-family building in Denver.  The asset was identified after an extensive off-market campaign in targeting assets capable of delivering exceptional returns on capital through a transformative heavy value-add strategy.

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HIGHLIGHTS

 

1. Heavy Value Add

  • Through our repositioning strategy, we plan to transform the building into a Class B asset.

  •  We have allocated close to $1 million for interior and exterior renovations to optimize net operating income.

  • Rents are about 20% greater in Terra Village, the building right next door, and our value-add strategy will put Ingall’s Grove a class above it. Newer construction is priced at a 50% premium.  Notwithstanding, we have not projected higher rents than Terra Village

 

 

2. Exceptional Submarket Growth

  • ·Denver has been one of the top MSAs in the nation for many years based on job, employment, rent and asset price growth. Now it is top in the nation in COVID-19 resilience, based on factors such as the employment rate, local precautions and preparedness, and the existing health of the population.

  • As a leafy suburb only minutes from the Denver core, Edgewater has benefits from a COVID-19 induced flight out of the core, as well as population growth from new Denver arrivals.

  • Edgewater rents have not fallen, and there is limited housing availability. Zillow currently shows four houses for sale, all close to substantially higher than $500,000.

  

3. Downside Protection

  • Investor appetite and capital availability for investment typically decreases during the exact moment when great opportunity exists. This creates a pricing arbitrage whereby sophisticated  investors can capitalize.  The spreads between multi-family assets and financing have widened, as many buyers are waiting out the turmoil, while interest rates have decreased. 

  • The COVID-19 vaccine has been rolled out, and a massive stimulus is on the way. Macro economists are modeling employment growth and GDP to substantially increase beginning the first quarter of 2021. This has already started causing a run up in asset prices in all sectors.

 

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© 2021 Cross Mountain Capital

Cross Mountain Capital Management, LLC ("Cross Mountain Capital") is not a registered broker-dealer, investment advisor or crowdfunding portal. Cross Mountain Capital does not make any recommendations regarding the appropriateness of particular opportunities for any investor.  Use of this website does not constitute an offer by Cross Mountain Capital to sell, solicit or make an offer to buy any securities and Cross Mountain Capital does not give or offer any business advice, investment advice, tax or legal advice to anyone using this website or the services. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees and expenses.

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All prospective investors must certify that they are accredited investors, and provide either supporting documents or third party verification, eligible for this type of illiquid investment, and must acknowledge that they have received and read all investment materials. Cross Mountain Capital may accept a limited number of non-accredited investors in accordance with SEC Rule 506(b) as applicable. Direct and indirect purchase of real property involves significant risks, including without limitation market risks, risk related to sale of land and risks specific to a given property. The securities offerings posted on the website are speculative. Investments posted on this website are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by Cross Mountain Capital, (or any of its affiliates) and MAY lose value. Neither the SEC nor any federal or state securities commission or regulatory authority has recommended or approved any investment or reviewed the accuracy or completeness of any of the information or materials posted on the website. Neither Cross Mountain Capital nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability whatsoever arising, for any error or incompleteness of fact or opinion in, or lack of care in the preparation or publication, of the materials and communication herein or the or that the valuation of any securities offering is appropriate. Past performance is not indicative of future results. The website may contain forward-looking statements, which may include words such as “may”, “will”, “should,” “expects,” “plans,” “anticipates,” “believes,” “targeted,” “projected,” “estimates,” “predicts,” “potential,” or “continue”. Cross Mountain Capital is under no obligation to review or update such statements and actual results may vary materially therefrom. Nothing herein shall be relied upon as a promise or representation as to past or future performance. All investors must make their own determination of whether or not to make any investment, based on their own independent evaluation of the investment and their risk tolerance.

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