Property Details
Ground-Up Development 
Asset Profile
Opportunistic

Shift Apartments

Portland, OR

Multi-Family Property
Ethos Development LLC Portland, OR
Ethos Development LLC
  • IRR 25.6%
  • Equity Multiple 1.71x
  • Hold Period 29M
  • Minimum Investment $50K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 6.6% in Y3
  • First Distribution Jan 2024
  • Distribution Frequency Quarterly
  • Co-Investment 7% ($300K)
  • Preferred Return 8% IRR
  • Investor Profit Share See Financials
  • Asset Profile Opportunistic
  • Loan-to-Value 73.2
  • Current Occupancy 0%

About this Property

"A ground-up, amenity forward, transit oriented, 73-unit apartment project in the Overlook neighborhood of North Portland, Oregon."

-Paul Del Vecchio, Ethos Development, LLC

"The building permit is under review by the city of Portland and is expected to be approved in early July. As there is a high degree of certainty on this outcome and all discretionary approvals and entitlements have been approved previously, investors will be signed into the operating agreement via the private placement memorandum, but funding will not be requested until a ready to issue letter from the City of Portland has been received.”

Address 5680 North Montana Ave
Square Footage 40,600 sq. ft.
# of Units 73
Total Project Cost $16,074,400
Price per Sq. Ft.(1) $377/GSF
Average Market Rents $3.24/sq. ft.
Market Occupancy 93.5%
Stabilized Loan to Value 57.5%

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 leverages city zoning to locate within a residential neighborhood while sitting only steps from a light rail stop and near retail, schools and employment. The resilience of the Portland market was clear in 2020 with declining stabilized vacancy and positive rent growth in three of four quarters. Those trends continue with growth outpacing pre-pandemic levels, enhanced by an insufficient city-wide pipeline of multifamily units."

 

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

Paul Del Vecchio, Ethos Development, LLC:

  • "Strong leasing performance at Nomad, a recently completed Ethos project one block to the east supports market demand and rental underwriting. The rents underwritten are taken directly from real-time lease-up."
  • "A unit mix favoring small units and common amenities provides affordability to tenants while capturing higher rent per leasable square foot for investors."
  • "The project is entitled with financing and construction pricing in place limiting pre-development risk."
  • "Curated architectural and interior design, amenity offerings, energy efficiency and neighborhood feel contribute to tenants identifying with the property and having a sense of pride in their home."

 

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 29 months to exit which includes 17 months of construction 6 months of leasing. Project delivery is well-timed with a low-supply of new units and projected increase in demand which suggest both growing rents and upside to potential buyers at disposition, driving cap rates down."

 

How has COVID-19 impacted your business plan?

Paul Del Vecchio, Ethos Development, LLC: "Ethos Development has managed construction related health and safety considerations and compliance within existing budgets on projects completed during 2020. The construction budget accounts for contractor’s safety costs. Market fundamentals have remained good through COVID-19 and other Ethos projects have successfully leased and operated during the past year."

 

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

Paul Del Vecchio, Ethos Development, LLC: "Construction and lumber pricing volatility are top of mind right now. The General Contractor has contributed to continual value engineering throughout the design process to ensure the best value for the project. There will be a fixed price contract, including a contingency to address pricing that cannot be locked in prior to construction."

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

About this Property

"A ground-up, amenity forward, transit oriented, 73-unit apartment project in the Overlook neighborhood of North Portland, Oregon."

-Paul Del Vecchio, Ethos Development, LLC

"The building permit is under review by the city of Portland and is expected to be approved in early July. As there is a high degree of certainty on this outcome and all discretionary approvals and entitlements have been approved previously, investors will be signed into the operating agreement via the private placement memorandum, but funding will not be requested until a ready to issue letter from the City of Portland has been received.”

Address 5680 North Montana Ave
Square Footage 40,600 sq. ft.
# of Units 73
Total Project Cost $16,074,400
Price per Sq. Ft.(1) $377/GSF
Average Market Rents $3.24/sq. ft.
Market Occupancy 93.5%
Stabilized Loan to Value 57.5%

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 leverages city zoning to locate within a residential neighborhood while sitting only steps from a light rail stop and near retail, schools and employment. The resilience of the Portland market was clear in 2020 with declining stabilized vacancy and positive rent growth in three of four quarters. Those trends continue with growth outpacing pre-pandemic levels, enhanced by an insufficient city-wide pipeline of multifamily units."

 

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

Paul Del Vecchio, Ethos Development, LLC:

  • "Strong leasing performance at Nomad, a recently completed Ethos project one block to the east supports market demand and rental underwriting. The rents underwritten are taken directly from real-time lease-up."
  • "A unit mix favoring small units and common amenities provides affordability to tenants while capturing higher rent per leasable square foot for investors."
  • "The project is entitled with financing and construction pricing in place limiting pre-development risk."
  • "Curated architectural and interior design, amenity offerings, energy efficiency and neighborhood feel contribute to tenants identifying with the property and having a sense of pride in their home."

 

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 29 months to exit which includes 17 months of construction 6 months of leasing. Project delivery is well-timed with a low-supply of new units and projected increase in demand which suggest both growing rents and upside to potential buyers at disposition, driving cap rates down."

 

How has COVID-19 impacted your business plan?

Paul Del Vecchio, Ethos Development, LLC: "Ethos Development has managed construction related health and safety considerations and compliance within existing budgets on projects completed during 2020. The construction budget accounts for contractor’s safety costs. Market fundamentals have remained good through COVID-19 and other Ethos projects have successfully leased and operated during the past year."

 

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

Paul Del Vecchio, Ethos Development, LLC: "Construction and lumber pricing volatility are top of mind right now. The General Contractor has contributed to continual value engineering throughout the design process to ensure the best value for the project. There will be a fixed price contract, including a contingency to address pricing that cannot be locked in prior to construction."

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

Offered By

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Assets Under
Management

Currently
$123MM 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
7 years  
Size
5 Staff  
* All information is reported by Ethos Development LLC as of 6/29/2021.
Assets Under
Management

Currently
$123MM 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
7 years  
Size
5 Staff  
* All information is reported by Ethos Development LLC as of 6/29/2021.

Financials

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Offering Financial

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Diligence Preview

Location Details

Portland, OR

Paul Del Vecchio, Ethos Development, LLC: "Shift is located steps from the light rail stop but with the feel of a residential neighborhood, the Overlook neighborhood provides a community feeling with easy access to urban amenities. The Portland Community College campus is a few blocks to the east while the Adidas headquarters sits 5 minutes west and downtown is easily accessible via light rail. The retail rich Mississippi and Williams districts are home to some of the best restaurants in Portland and only minutes away."

Documents

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Offering Agreement Documents

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