Hawthorne Mill Backgrounder

Transcript

1. July 2013! Hawthorne Mills Lofts! An historic redevelopment of the Louise Cotton Mills, 2.0 miles from downtown Charlotte, NC.! ! By Clachan Properties, LLC!
2. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! TABLE OF CONTENTS! •  Executive Summary! ! ! ! !2! •  Background On Clachan Properties ! ! !11! •  Select Prior Projects! ! ! ! !16! •  Thank You ! ! ! ! !33! •  Appendices ! ! ! ! !34!
3. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Executive Summary – Project Description! Location! ! The former Louise Cotton Mill located at 1011 Hawthorne Avenue, Charlotte, NC, 2.0 miles southeast from downtown in the up-and-coming Plaza-Midwood area.! ! Market Dynamics ! ! The multifamily market in Charlotte is characterized by high average rents, robust rental increases (up 9% in 2012), solid occupancies, and strong valuations (trophy cap rates below 5%, 5.25%-6% for other Class A properties). 1 ! ! In light of these strongly positive market dynamics, numerous apartment projects are either underway or have been announced. Our project will benefit from (a) differentiation, as our ‘classic cotton mill’ with large factory windows and exposed brick and wood columns will be competing with relatively homogenous new construction apartments, and (b) significant cushion in our operating pro forma.! ! History! ! The Louise Cotton Mill opened on May 31, 1897. Named for the wife of the president of the firm, H. S. Chadwick, the plant contained 7,000 spindles and 368 looms. A two-story building 90 feet wide and 360 feet long, the Louise Mill was located on the Seaboard Airline Railroad just east of Charlotte. In 1900 a major addition was constructed, increasing the capacity to 20,000 spindles. ! ! A Part 1 and National Register nomination will be applied for on 07.31.13 and the local Landmark application will be complete in early August, 2013 and should be approved before the end of 2013. Building plans are underway and we expect to file for a Part 2 in August 2013.! ! ! ! ! ! ! ! ! ! 1 CBRE 2012 Charlotte Market Review !  
4. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Executive Summary – Project Description! Renovation Plan! ! Clachan Properties will renovate the 147,000 sq ft structure into 149 Class A, market-rate apartments (no commercial space), 6,900 sq ft of interior amenity space (including a clubhouse, theater, weight room, cardio and yoga facilities), 15,700 sq of exterior amenities (including pool, outdoor fire pit, gas grills, roof terrace) and 190 +/- parking spaces.! ! Project Team Members! ! !Managing Member: Clachan Properties! !Counsel: Rick Gregory, Atlas Law! !Accounting: Marshall Phillips, Cohn-Reznick! !Property Manager: Clachan Properties! !Contractor: MGT Construction (a division of Cushman & Wakefield)! !Architect: Walter Parks, Walter Park Associates! ! Investment Specifics! ! ! ! Amount ($m) ! !Provided By! !QRE’s! ! !18.9! !Construction Loan ! !14.8 ! !TBD ! ! !Bridge Loan ! ! 7.6 ! !TBD ! ! !Federal Credits ! ! 3.7 ! !TBD! !NC Mill Credits ! ! 5.7 ! !TBD! ! ! !! ! ! ! ! !
5. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Executive Summary – Project Description! Solid Project Sponsors! ! ! ! ! ! ! ! ! Development/Investment Highlights! •  Charlotte NC is a robust multifamily market with strong rents and valuations! •  The Plaza-Midwood submarket is ‘on the move’ with lots of new restaurants and nightlife! •  While there is lots of multi-family development in the pipeline, our product is differentiated (i.e., there are very few historic re-development projects in the Charlotte metro) and we have substantial cushion against rental rates, interest rates, and cap rates eroding from our model (see slide 10)! Timing! ! !Re-zoning Approval: October 2013! !Landmark Designation: November, 2013! !Approved Building Permit: February 2014! !HTC and Construction Loan Closing Date: February 2014! !Construction: 18 months ! !! !Completion/Credit Delivery: Summer 2015! ! ! ! ! ! ! ! 1 Excludes $750k to $1m in loan and tax credit proceeds associated with the Part 3 of Winston Factory Lofts Phase 2!
6. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Executive Summary – Project Aerial Photo!
7. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Construction Budget and QRE Calculations!
8. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Development Improvement Summary!
9. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Stabilized P&L, Valuation and Cash Flow!
10. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Significant Cushion In The Pro Forma!
11. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Unit Analysis!
12. Background On Clachan Properties! ! ! FOR THE FUTURE
13. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! What’s A Clachan?! Clachan (klăk'ən) n. 1. Scottish word for a hamlet or small village, generally containing a church. 2. a small cluster of cottages. [Earliest date 1459, from the Gaelic clach, a stone; Irish clochán, stepping stones. It is supposed that clachan, applied first to the standing stones raised by the Druids for religious purposes and regarded with superstitious awe, was later used to denote a graveyard, and then a village containing a church.]! !
14. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Developer Backgrounds! General! ! Clachan Properties focuses on the acquisition, renovation and management of historic residential and commercial properties in Virginia and North Carolina.! ! ! Partners! ! Herb Coleman! Voice: 804.647.8099 Fax: 877-689-3898! herb@clachanproperties.com! Herb Coleman is a co-founder of Clachan Properties, serves as its CEO, and runs its day-to-day operations. Herb was an agent with Northwestern Mutual Insurance for 19 years, specializing in estate planning and investments for high net worth individuals. Herb has managed a number of real estate renovations over the past 17 years for his personal real estate portfolio. Herb currently sits on the West Cary Street Redevelopment Committee. Herb holds a B.S. in Finance and Marketing from Virginia Polytechnic Institute. Herb lives in Glen Allen, VA.! ! ! ! Hugh Shytle! Voice: 617.306.1949 Fax: 781.788.9337! @clachanproperties.com ! Hugh Shytle is a co-founder of Clachan Properties and serves as its President. Until April 2003 Hugh served as the Managing Director and COO of Idealab’s Boston office. While associated with Idealab, Hugh served on the boards of directors of a number of early-stage companies including intranets.com (acquired by WebEx) and Picasa (acquired by Google). Prior to joining Idealab in February 2000, Hugh served as a General Partner at Tribeca Partners, a private equity investment company. Before that, Hugh spent 7 years as a Managing Director at SG Cowen Securities where, as a research analyst, he covered software and technology services companies. Hugh started his career serving as the Chief Operating Officer of Webhire, an enterprise software company. Hugh holds a B.S. in Computer Science from Virginia Polytechnic Institute and an S.M. in Management from the Sloan School of Management at the Massachusetts Institute of Technology. Hugh lives in Weston, MA.! ! ! ! ! !
15. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! What Clachan Brings To The Table! Historic Renovation Experience! •  10 years of experience doing historic tax credit renovations! •  14 tax credit deals in Virginia and North Carolina! •  $85 million in historic renovation projects (including condos)! ! Multi-family development expertise in Virginia and North Carolina! •  ~500 units in projects ranging from 1 to 85 units! •  Multiple re-zonings and special use permits! ! Existing development relationships! •  Solid track record with both lenders and tax credit partners! •  Relationships with contractors, architects, tax credit consultants, accountants, City officials, etc.! ! Local operations! •  Clachan has completed projects of a similar scale in Winston-Salem, NC! •  Plug-and-play marketing, leasing and maintenance operation! ! ! !
16. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Representative Rental Projects! ! ! !
17. Prior Projects! ! ! FOR THE FUTURE
18. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Clachan acquired the Grace Street Hospital in March 2004 and the building, originally built in 1911 by noted architect Charles Robinson and expanded in 1930 by Henry Baskervill, was added to the National Historic Register in June 2004.! Before  Photos   Grace at Monroe ! ! ! ! !Richmond, VA!
19. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! A,er  Photos   Grace at Monroe (Continued)!
20. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Clachan acquired the building in July 2004. Zoned M-1 at the time, we had to work closely with the Carver Area Civic Improvement league to get the renovations approved under a special use permit.! Before Photos! 1318 West Broad Street ! ! ! !Richmond, VA!
21. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! After Photos! 1318 West Broad Street (Continued)!
22. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Before  Photos   The Reserve (Condo) ! ! ! !Richmond, VA! Located at 25th and Franklin in Richmond’s Church Hill near Tobacco Row, Clachan acquired the existing building and land on which The Reserve is built in 2005. We built and sold 25 of Richmond’s highest-end condominiums. The design was a Golden Hammer award winner.!
23. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! After Photos! The Reserve (Continued)!
24. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Before  Photos   Emrick Flats (Condo) ! ! ! !Richmond, VA! Located on Adams Street between Broad and Marshall in Richmond’s Jackson Ward, Clachan and a partner acquired the former Emrick Chevrolet building in 2005. We built and sold 25 modern condos that capture the true "flat" experience with wide open plans, tremendous ceiling heights and beautiful expansive city views through 6' factory windows.!
25. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! A,er  Photos   Emrick Flats (Continued)!
26. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Before  Photos   Smokehouse Lofts ! ! ! !Richmond, VA! Located at 15th & Cary in Richmond’s Shockoe Slip, Clachan acquired Smokehouse Lofts in March 2009. Zoned M-1 at the time, we worked closely with City officials to re-zone the building B-5.!
27. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! A,er  Photos   Smokehouse Lofts (Continued)!
28. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Clachan Properties converted Winston Factory Lofts into 85 luxury one-, two- and three-bedroom apartment homes. Construction involved all new mechanical and fire alarm systems; roof, skylight and window replacement; restoration of the façade; new main entrance foyer accessing a new lobby and lounge. The development effort introduced contemporary architectural features while preserving the attractive historic character of the building. ! Before Photos! Winston Factory Lofts ! ! ! !Winston-Salem, NC!
29. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! A,er  Photos   Winston Factory Lofts (Continued)!
30. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Winston Factory Lofts Phase II (Final Stages of Completion)! Phase II of Winston Factory Lofts has eighty-six 1, 2, and 3-bedroom apartment homes and will add a jetted pool, a 16-seat movie theater, Wii/gaming room, fitness facility, yoga studio, resident lounge, and an additional roof deck to the Phase 1 amenities. Occupancy started in June 2013 and the full CofO is expected in July 2013. !
31. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! A,er  Photos   Winston Factory Lofts Phase 2 (Continued)!
32. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Forsyth County Courthouse (Now in Design) Winston-Salem, NC!
33. For More Information! Hugh Shytle, President! Clachan Properties, LLC! 617-306-1949 – mobile! hugh@clachanproperties.com -- email! ! ! FOR THE FUTURE
34. Appendices! ! ! FOR THE FUTURE
35. 110 South 15th Street, Suite A, Richmond, VA 23219! 804-358-7800 PH 877-689-3898 FAX! Appendices Available Upon Request! Market Data! ! CBRE 2012 Charlotte Market Review ! Wells Fargo Rental Survey! ! Historic Data! Part 1 and National Register Nomination! Landmark Approval! Zoning Confirmation! Part 2 Application! ! Building Data! Historic Photos! Architectural drawings! MEPs! ! ! ! ! ! ! ! ! ! ! ! !