Property Details
Ground-Up Development 
Asset Profile
Opportunistic

brookLAND Apartments

Portland, OR

Multi-Family Property
Ethos Development LLC Portland, OR
Ethos Development LLC
  • IRR 29.3%
  • Equity Multiple 2.02x
  • Hold Period 2.75Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash N/R
  • Stabilized Cash on Cash N/R
  • First Distribution Jan 2024
  • Distribution Frequency Quarterly
  • Co-Investment 11% ($1.6M)
  • Preferred Return 8% IRR
  • Investor Profit Share See Financials
  • Asset Profile Opportunistic
  • Loan-to-Value 63.5%
  • Current Occupancy 0%

About this Property

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

-Paul Del Vecchio, Ethos Development, LLC

 

Address 4245 SE Milwaukie Ave
Square Footage 128,000 sq. ft.
# of Units 166
Total Project Cost $39,937,000
Average Market Rents $3.11/sq. ft.
Stabilized Loan to Value 44%

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.

About this Property

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

-Paul Del Vecchio, Ethos Development, LLC

 

Address 4245 SE Milwaukie Ave
Square Footage 128,000 sq. ft.
# of Units 166
Total Project Cost $39,937,000
Average Market Rents $3.11/sq. ft.
Stabilized Loan to Value 44%

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.

Offered By

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Assets Under
Management

Currently
$67MM 10+ assets
Exited
$17.62MM less than 10 assets
Portfolio LTV
50%  
Historical
Realized Returns

Total IRR
33%  
Equity Multiple
1.54x  
Annual Cash
16%  
Years Of
Experience

As Principals
15+ years  
In Business
6 years  
Size
4 Staff  
* All information is reported by Ethos Development LLC as of 1/11/2021.
Assets Under
Management

Currently
$67MM 10+ assets
Exited
$17.62MM less than 10 assets
Portfolio LTV
50%  
Historical
Returns

Total IRR
33%  
Equity Multiple
1.54x  
Annual Cash
16%  
Years Of
Experience

As Principals
15+ years  
In Business
6 years  
Size
4 Staff  
* All information is reported by Ethos Development LLC as of 1/11/2021.

Financials

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Offering Financial

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Location Details

Portland, OR

Paul Del Vecchio, Ethos Development, LLC: "The Brooklyn neighborhood is directly south of the central east side of Portland and within walking distance to Division Street. The central east side and division are two of the most desirable locations in the city and have seen tremendous growth as the east side has become more urban. The neighborhood has a MAX line (regional transit) running along its Eastern border and allows for easy transit access without sacrificing a livable neighborhood feel. The neighborhood borders a large nature preserve and bike path that leads a rider on protected paths to either the south waterfront, where Oregon Health and Science University is located, or to downtown. Plainly stated, the site is very strategically located and squarely in the path of progress."

Documents

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Offering Agreement Documents

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