DV | Urban Realty Partners I LP - Crain's Chicago Business

DV | Urban Realty Partners I LP
REAL ESTATE PORTFOLIO OVERVIEW

EXECUTIVE SUMMARY
General
DV Urban Realty Partners I L.P. (the “Partnership”) is a value added real estate
investment fund. The principals (the “Principals”) of the General Partners are Allison
S. Davis, Jared A. Davis and Robert G. Vanecko (see “Management” below). The
Partnership was organized in April 2006 and has Capital Commitments of $71.5 million
from institutional investors.
Investment Objective and Strategies
The Partnership’s objective is to generate attractive risk-adjusted rates of return through
investment in urban real estate in Chicago and other select urban markets.
The Partnership will employ an investment discipline that has been successfully used in
other real estate investments made by Affiliates of the General Partners. The Partnership
will seek to create value through the acquisition, development, redevelopment and
repositioning of real estate in Chicago and other targeted markets. Transitional as well as
established neighborhoods will be targeted, including areas which can become
“established” through the very process of building the Project in question.
Key elements of the Partnership’s strategy include:
Focus on Urban Markets — The Partnership will attempt to identify emerging
and transitional neighborhoods with one or more of the following characteristics:
Above-average population growth
Strong and densely concentrated purchasing power
Highly desirable locations
Lack of capital investment
Pro-growth environment
Value Investing — Purchase development sites and operating properties at
attractive valuations by emphasizing overlooked markets and privately negotiated
transactions.
Institutional Quality — Develop high-quality properties and strategically
upgrade acquired properties to institutional quality.
Aggressive, Value-Added Property Management — Actively manage
properties to enhance cash flow and maximize long-term residual value.
Neighborhood Rejuvenation — Participate in and contribute to the rejuvenation
of targeted markets, and the resulting increase in real estate values.
Prudent Use of Leverage — Utilize leverage prudently, controlling interest rate
and repayment risk. The Partnership itself will only borrow for “bridge
financing” purposes and will not permit the Projects which it controls to borrow
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more than 70% loan to value without the approval of the Advisory Committee.
Disciplined, Flexible Exit Strategy — Identify a proposed exit strategy before an
investment is made and position assets to take advantage of a variety of possible
exit alternatives, including single asset sales, portfolio sales and REIT-related
transactions.
Investment Highlights
Attractive Niche Investment Opportunity – Select urban real estate markets represent
an attractive niche investment opportunity. Many urban markets have strong
demographic characteristics and attractive locations, but have been overlooked by
traditional investors.
Specialized Expertise in Urban Real Estate – Through their participation in urban real
estate markets over the past 30 years, the Principals and Affiliates of the General Partners
have developed extensive expertise in the specialized factors that determine success in
urban real estate investments. These factors include the knowledge of the economic,
demographic, political, social and cultural characteristics of specific urban
neighborhoods, value-added relationships with local political, business, community and
religious leaders and expertise in zoning and governmental approval processes. The
General Partners will attempt to leverage the Principals’ extensive urban market
knowledge and relationships to originate attractive investment opportunities.
Extensive Development Experience – The Principals have extensive urban real estate
development experience. Their projects, which are in various stages of development,
include multi-family properties, single-family homes, town homes and condominium and
retail properties. The Principals’ collective experience includes all aspects of the
development process including conceptualization, design and engineering, legal and
governmental approvals, financing, construction management, leasing, property
management and exit.
Strong In-House Property Management Capability – Through DV Property
Management, an affiliate of the General Partners, the Partnership will have access to
dedicated in-house property management capabilities. Due to DV’s property
management capability, the General Partners believe the Partnership should be able to
provide a higher level of tenant service, which should result in higher occupancies and
stronger, more secure cash flows. This capability can enable the Partnership to employ a
variety of strategies to add value to its properties while further controlling risks.
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Financial and Capital Markets Experience – The Principals have extensive real estate
and corporate transactional experience, including involvement in real estate capital
raising transactions totaling over $1.1 billion for public and private REITs and real estate
operating companies. The Partnership expects to draw on this experience in structuring
its investments. In addition, the General Partners believe that their combination of real
estate experience and capital markets expertise gives the Partnership the opportunity to
identify and exploit market inefficiencies arising from shifts in real estate fundamentals
and capital flows across asset types, geographies, transaction sizes and capital structures.
Rigorous Investment Process – The Partnership will employ a disciplined and rigorous
approach to all phases of the investment process. The General Partners will focus on
conservative underwriting and comprehensive due diligence. The consent of both
General Partners is required before the Partnership can commit to any real estate Project.
Post-acquisition, the Partnership will actively manage and monitor the investment while
evaluating possible exit alternatives.
Focus on Capital Preservation – A core component of the Partnership’s investment
philosophy will be a focus on capital preservation. Although real estate investment risk
can not be eliminated or directly hedged, the Partnership will place a special emphasis on
risk control in structuring its investments.
Management
The Principals, collectively, have extensive experience in (a) conceiving, promoting and
executing a variety of successful projects in emerging and transitional urban markets of
the type targeted by the Partnership, (b) structuring, negotiating and executing a wide
variety of real estate and corporate transactions, (c) real estate development, acquisition
and property management, (d) zoning and government approval processes and (e) real
estate finance and investment banking. The Partnership will have access to the
Principals’ network of corporate, neighborhood, financial and real estate contacts and
relationships to generate a proprietary flow of potential investment opportunities in its
target markets, as well as the Principals’ financial knowledge and capital markets
expertise in evaluating and structuring real estate-related transactions.
Over the past 7 years, Affiliates of the Managing Partner have invested in transactions
involving more than 15 real estate assets with an aggregate estimated total cost in excess
of $600 million in emerging and transitional neighborhoods in Chicago. The Principals
of the Managing Partner have committed over $15 million of equity capital to these
transactions and have been involved in the development of more than 2,000 units of
housing. The Principals have also been involved in real estate capital raising transactions
totaling over $1.1 billion for public and private real estate investment trusts and real
estate operating companies.
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1212 S. MICHIGAN AVE. APARTMENTS
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PROPERTY SUMMARY – 1212 S. MICHIGAN AVE.
Property Name:
1212 S. Michigan Ave. Apartments
Property Address: 1212 S. Michigan Ave., Chicago, IL 60605
Property Type:
Multifamily
Closing Date: September 29, 2006
Market:
Submarket:
Chicago, IL
South Loop
Number of Units: 344
Description Units Unit Size (SF) Total Size
Unit Mix:
Studio 29 555 16,095
Studio 29 555 16,095
Studio 29 570 16,530
Studio 27 575 15,525
Studio 29 567 16,443
1BR/1BA 29 620 17,980
1BR/1BA 29 677 19,633
1BR/1BA 29 692 20,068
1BR/1BA 29 704 20,416
1BR/1BA 29 708 20,532
2BR/2BA 27 968 26,136
2BR/2BA 29 1,055 30,595
Total / Avg. 344 686 236,048
Number of Parking Spaces: 217
Residential Square Feet: Approx. 237,000
Commercial Square Feet:
Project Amenities:
Property Management:
Approx. 6,500; pursuing expansion to 15,000+ SF
Property amenities include attached garage, fitness center,
business center, pool and dry cleaner.
The property is being managed by DV Property
Management, LLC.
Other Investors:
None
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Jobs Created:
Affordable Units:
Occupancy:
The property has a staff of 10 people, including 5 union
personnel (engineering & maintenance staff)
Approx. 20 tenants have Sec. 8 vouchers that provide
subsidized rents
The property was approximately 93% occupied as of April
30, 2009.
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2400 S. MICHIGAN AVE.
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PROPERTY SUMMARY – 2400 S. MICHIGAN AVE.
Property Name:
2400 S. Michigan Ave.
Property Address: 2400 S. Michigan Ave., Chicago, IL 60605
Property Type:
Commercial
Closing Date: June 8, 2007
Market:
Submarket:
Chicago, IL
South Loop
Commercial Square Feet: Approx. 40,000
Other Investors:
Jobs Created:
Affordable Units:
2400 South Michigan Ave. LLC (Matthew O’Malley, Brian
O’Connell)
To be determined in the future upon redevelopment of the
property
NA
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217 N. JEFFERSON
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PROPERTY SUMMARY – 217 N. JEFFERSON
Property Name:
217 N. Jefferson
Property Address: 217 N. Jefferson St., Chicago, IL 60661
Property Type:
Office
Closing Date: July 13, 2007
Market:
Submarket:
Chicago, IL
West Loop
Number of Parking Spaces: 40
Commercial Square Feet: 59,227
Tenants:
Project Amenities:
Property Management:
Other Investors:
Occupancy:
Trattoria Isabella, McCormick Braun Friman, Neohapsis,
Jack Morton Worldwide, Terrapin Properties, Bischoff
Partners, Law Offices of Joseph Howard
Property amenities include a surface parking lot, lobby and
ground floor restaurant.
The property is being managed by DV Property
Management.
Investor group led by Michael Ezgur and Jake Geleerd
The property was approximately 67% occupied as of April
30, 2009.
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7100 SOUTH SHORE DRIVE
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PROPERTY SUMMARY – 7100 SOUTH SHORE DRIVE
Property Name:
7100 South Shore Drive Apartments
Property Address: 7100 South Shore Drive, Chicago, IL 606
Property Type:
Multifamily
Closing Date: July 31, 2007
Market:
Submarket:
Chicago, IL
South Shore
Number of Units: 162
Unit Mix:
Number of
Description Units Unit Size (SF) Total Size
Studio 18 350 6,300
Studio 10 400 4,000
Studio 19 470 8,930
1BR/1BA 2 470 940
1BR/1BA 50 640 32,000
1BR/1BA 22 700 15,400
1BR/1BA 30 740 22,200
1BR/1BA 7 780 5,460
2BR/1BA 4 1,000 4,000
Total / Avg. 162 613 99,230
Number of Parking Spaces: 28
Residential Square Feet: Approx. 99,468
Commercial Square Feet: Approx. 9,250
Project Amenities:
Property Management:
Property amenities include attached surface parking lot,
lobby, laundry room and salon.
The property is being managed by DV Property
Management, LLC.
Other Investors:
None
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Jobs Created:
Affordable Units:
Occupancy:
The property has a staff of 4 people.
Approx. 8 tenants have Sec. 8 vouchers that provide
subsidized rents.
The property was approximately 88% occupied as of April
30, 2009.
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3508 S. STATE
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PROPERTY SUMMARY – 3508 S. STATE
Property Name:
Property Address:
Property Type:
Park Boulevard Retail
3508 S. State St., Chicago, IL
Retail / Commercial
Closing Date: August 31, 2007
Market:
Submarket:
Commercial Square Feet:
Tenants:
Other Investors:
Jobs Created:
Government Incentives:
Chicago, IL
Bronzeville
6,981 Phase I; 16,014 total
Starbuck’s Coffee; National City Bank; Jimmy John’s
sandwich shop, Fed Ex Kinko’s; Mother Butter’s, Miller
Pizza.
None
The Park Boulevard Retail space is expected to generate
approximately 40 new jobs.
The property is located within a Federal Empowerment
Zone and a City of Chicago TIF district.
Occupancy: The property was approximately 88% leased as of April 30,
2009.
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3030 N. BROADWAY
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PROPERTY SUMMARY – 3030 N. BROADWAY
Property Name:
Property Address:
Property Type:
3030 N. Broadway
3030 N. Broadway Ave., Chicago, IL
Mixed Use – Retail, Parking, Condos
Closing Date: March 3, 2008
Market:
Submarket:
Chicago, IL
East Lakeview
Commercial Square Feet: 45,000
Tenants:
Other Investors:
Jobs Created:
Occupancy:
Dominick’s Finer Foods, National City Bank
3012 N. Broadway LLC (Michael O’Connor and Jonathan
Zitzman)
The Dominick’s and National City retail spaces are
expected to generate approximately 150 new jobs.
NA (development project).
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3013-27 N. WATERLOO
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PROPERTY SUMMARY – 3013-27 N. WATERLOO
Property Name:
Property Address:
Property Type:
3013-27 N. Waterloo
3013-27 N. Waterloo Court, Chicago, IL
Multifamily Rental
Closing Date: March 3, 2008
Market:
Submarket:
Chicago, IL
East Lakeview
Number of Units: 50
Other Investors:
Occupancy:
None
NA (development project).
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3348 S. PULASKI
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PROPERTY SUMMARY – 3348 S. PULASKI ROAD
Property Name:
Property Address:
Property Type:
3348 S. Pulaski
3348 S. Pulaski Road, Chicago, IL
Industrial
Closing Date: November 27, 2007
Market:
Submarket:
Chicago, IL
Little Village / I-55 Industrial Corridor
Commercial Square Feet: 320,000
Tenants:
Other Investors:
Jobs Created:
Bus & Truck of Chicago, Department of Water
Management City of Chicago, Koch Equipment,
Springfield Supply
Sydney Partners LLC (Anthony Burns and Jeff Josephs)
TBD.
Occupancy: The property was approximately 69% leased as of April 30,
2009.
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