"A ground-up, architecturally inspiring, 166-unit apartment project in the Brooklyn neighborhood of Southeast Portland, Oregon."

-Paul Del Vecchio, Ethos Development, LLC

Top Questions

All answers are provided by the sponsor, Ethos Development, LLC, or its representatives.

Why are you buying this property?

Paul Del Vecchio, Ethos Development, LLC: "The property is one of the last by-right parcels of this size in the inner east side of Portland. It is transit oriented while still providing a genuine neighborhood experience, which is not often achievable with a multifamily property of this scale. The timing is leveraging the very limited pipeline as compared to regional growth projections, a healthy absorption environment is expected at delivery."

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

Paul Del Vecchio, Ethos Development, LLC:

• "The combination of timing the build with a period of known low-supply and expected demand increase will position the project perfectly for disposition."
• "The building itself will be very unique, with two large atriums allowing for light and air on both sides of many of the residential units as well as multiple outdoor vantage points around the building."

What is your investment strategy/business plan?

Paul Del Vecchio, Ethos Development, LLC: "The business plan is a traditional merchant-build model, the project will be sold immediately after stabilization. The schedule anticipates 33 months to exit, which includes 18 months to build and 15 months of leasing."

How has COVID-19 impacted your business plan?

Paul Del Vecchio, Ethos Development, LLC: "Ethos Development, LLC is holding a contingency for construction related considerations to comply with state requirements. The amount is based off of another recently completed project with the same general contractor. Ethos Development, LLC does not expect COVID-19 to negatively affect lease-up or operations."

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

Paul Del Vecchio, Ethos Development, LLC: "The biggest risk to this project is leasing at rents lower than projected. The anticipated rent growth between now and project delivery provide some inherent mitigation. If one were to exit a similar project today, the likely exit cap would be 4.25% and the underwritten cap rate was 4.5%, which allows some cushion for rents coming in softer than projected. Most importantly, a reduction in rents by as much as 10% still allows for a 1.4x multiple to investors and, in the worse case, a finished value that allows for a takeout refinance of both the senior lender and pref equity partner."

NOTE: All answers provided by the sponsor, Ethos Development, LLC, or its representatives.