Property Details
Opportunity Zone  Ground Up Development  NOI Growth 
Asset Profile
Opportunistic

Ariza Oakwood

Huntsville, AL

Multi-Family Property

This deal is oversubscribed

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Cypressbrook Company The Woodlands, TX
Cypressbrook Company
  • IRR 15%
  • Equity Multiple 3.04x
  • Hold Period 10Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 8.4% Y4
  • First Distribution Dec 2023
  • Distribution Frequency Quarterly
  • Asset Profile Opportunistic
  • Loan-to-Value 66.8%
  • Current Occupancy 0%

About this Property

"Ariza Oakwood is an Opportunity Zone Investment in a fast growing market. This to-be-built, 316 unit, 3-story Class-A garden-style multifamily property is less than 8 miles from Downtown Huntsville and with convenient access to major employment centers through Research Park Blvd and I-565."

-Michael E. Novelli, Cypressbrook Company

Address Oakwood at Old Moravian, Huntsville
Square Footage +/- 278,000 Net Rentable SF
# of Units 316
Price/Sq. Ft. $176/sq. ft.
Total Project Cost $48,877,441
Stabilized Loan to Value 65%
Market Occupancy 91%

Top Questions

All answers are provided by the sponsor, Cypressbrook Company, or its representatives.

 

Why are you buying this property?

Michael E. Novelli, Cypressbrook Company: "Huntsville is seeing exceptional growth, growing at 3% per year vs the average U.S. rate of 2%. Property is conveniently located near Research Park, home to many major employers and a major hub for leading federal government agencies including NASA and the FBI. There is more than $900M of new retail and commercial development under construction within 15 minutes of site, which is already home to 196,000 jobs. The project is also within a 10-minute drive of numerous retail centers, local businesses, and restaurants."

 

What are the most important aspects of this investment opportunity for the investors?

Michael E. Novelli, Cypressbrook Company: "This project is located in a federally designated Opportunity Zone, which allows investors to defer existing realized gains until December 31, 2026 and exempts Federal Taxes for projects owned longer than 10 years."

 

What is your investment strategy/business plan for the Property?

Michael E. Novelli, Cypressbrook Company: "Build, stabilize and the permanently finance the ground up Class A apartment. Ariza Oakwood will likely be a longer term play to allow investors to benefit from the tax benefits offered in an Opportunity zone, but conventional investors are welcome to participate."

 

How has COVID-19 impacted your business plan?

Michael E. Novelli, Cypressbrook Company: "The Cypressbrook Company experienced minimal impacts from COVID-19 on the Ariza product across the country. During shutdown periods, the Ariza properties expanded virtual tours and took precautions to amend use of the swimming pool, fitness center and other common areas to protect the health and safety of residents and staff. However, overall, the era of COVID-19 has emphasized the importance of home and convenient amenities making the Ariza brand a sought after product in its respective communities."

 

What are the risks and how are you mitigating those risks?

Michael E. Novelli, Cypressbrook Company: "The risk for any ground up development involves securing the entitlements, procuring construction, and a successful lease up and emerging competition. For Ariza Oakwood, all key entitlements have been secured so that is no longer a risk. While construction costs are not yet finalized, Cypressbrook has been building assets like this for over 34 years and has always completed projects within the budget presented to the investors. Ariza Oakwood will not be the first to falter in this key area! The property will be managed by the affiliated management company, Cypressbrook Multifamily Management, LP, who will oversee staffing and lease up. This same team has already successfully directed the lease up for several other Ariza projects in the south. Finally, the risk of emerging competition is always the hardest to address. In fact, a dynamic market like Huntsville always attracts competitors. However, in this case, Cypressbrook has been monitoring the supply and demand since initiating the process over a year ago and feel the emerging supply is reasonable given the job creation and market growth expected in the Huntsville area. Moreover, the company will have significant equity in the project that will allow for more time to lease up should the market slow or additional new competitors emerge."

NOTE: All answers provided by the sponsor, Cypressbrook Company, or its representatives.

About this Property

"Ariza Oakwood is an Opportunity Zone Investment in a fast growing market. This to-be-built, 316 unit, 3-story Class-A garden-style multifamily property is less than 8 miles from Downtown Huntsville and with convenient access to major employment centers through Research Park Blvd and I-565."

-Michael E. Novelli, Cypressbrook Company

Address Oakwood at Old Moravian, Huntsville
Square Footage +/- 278,000 Net Rentable SF
# of Units 316
Price/Sq. Ft. $176/sq. ft.
Total Project Cost $48,877,441
Stabilized Loan to Value 65%
Market Occupancy 91%

Top Questions

All answers are provided by the sponsor, Cypressbrook Company, or its representatives.

 

Why are you buying this property?

Michael E. Novelli, Cypressbrook Company: "Huntsville is seeing exceptional growth, growing at 3% per year vs the average U.S. rate of 2%. Property is conveniently located near Research Park, home to many major employers and a major hub for leading federal government agencies including NASA and the FBI. There is more than $900M of new retail and commercial development under construction within 15 minutes of site, which is already home to 196,000 jobs. The project is also within a 10-minute drive of numerous retail centers, local businesses, and restaurants."

 

What are the most important aspects of this investment opportunity for the investors?

Michael E. Novelli, Cypressbrook Company: "This project is located in a federally designated Opportunity Zone, which allows investors to defer existing realized gains until December 31, 2026 and exempts Federal Taxes for projects owned longer than 10 years."

 

What is your investment strategy/business plan for the Property?

Michael E. Novelli, Cypressbrook Company: "Build, stabilize and the permanently finance the ground up Class A apartment. Ariza Oakwood will likely be a longer term play to allow investors to benefit from the tax benefits offered in an Opportunity zone, but conventional investors are welcome to participate."

 

How has COVID-19 impacted your business plan?

Michael E. Novelli, Cypressbrook Company: "The Cypressbrook Company experienced minimal impacts from COVID-19 on the Ariza product across the country. During shutdown periods, the Ariza properties expanded virtual tours and took precautions to amend use of the swimming pool, fitness center and other common areas to protect the health and safety of residents and staff. However, overall, the era of COVID-19 has emphasized the importance of home and convenient amenities making the Ariza brand a sought after product in its respective communities."

 

What are the risks and how are you mitigating those risks?

Michael E. Novelli, Cypressbrook Company: "The risk for any ground up development involves securing the entitlements, procuring construction, and a successful lease up and emerging competition. For Ariza Oakwood, all key entitlements have been secured so that is no longer a risk. While construction costs are not yet finalized, Cypressbrook has been building assets like this for over 34 years and has always completed projects within the budget presented to the investors. Ariza Oakwood will not be the first to falter in this key area! The property will be managed by the affiliated management company, Cypressbrook Multifamily Management, LP, who will oversee staffing and lease up. This same team has already successfully directed the lease up for several other Ariza projects in the south. Finally, the risk of emerging competition is always the hardest to address. In fact, a dynamic market like Huntsville always attracts competitors. However, in this case, Cypressbrook has been monitoring the supply and demand since initiating the process over a year ago and feel the emerging supply is reasonable given the job creation and market growth expected in the Huntsville area. Moreover, the company will have significant equity in the project that will allow for more time to lease up should the market slow or additional new competitors emerge."

NOTE: All answers provided by the sponsor, Cypressbrook Company, or its representatives.

Offered By

Cypressbrook Company

Cypressbrook Company

The Woodlands, TX

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Assets Under
Management

Currently
$367MM 10+ assets
Exited
$786MM 40+ assets
Portfolio LTV
67%  
Historical
Realized Returns

Total IRR
18%  
Equity Multiple
2x  
Annual Cash
25.8%  
Years Of
Experience

As Principals
30+ years  
In Business
24 years  
Size
65 Staff * Dedicated investor relations
* All information is reported by Cypressbrook Company as of 9/18/2020.
Assets Under
Management

Currently
$367MM 10+ assets
Exited
$786MM 40+ assets
Portfolio LTV
67%  
Historical
Returns

Total IRR
18%  
Equity Multiple
2x  
Annual Cash
25.8%  
Years Of
Experience

As Principals
30+ years  
In Business
24 years  
Size
65 Staff * Dedicated investor relations
* All information is reported by Cypressbrook Company as of 9/18/2020.

Financials

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Offering Financial

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Location Details

Huntsville, AL

Michael E. Novelli, Cypressbrook Company: "Property is conveniently located near Research Park (Hwy 255), home to many major employers and a major hub for leading federal government agencies including NASA and the FBI all just south of the site. There is more than $900M of new retail and commercial development under construction within 15 minutes of site, which is already home to 196,000 jobs. The project is also within a 10-minute drive of Walmart, Target, Best Buy, as well as numerous retail centers, local businesses, and restaurants."

Documents

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Offering Agreement Documents

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