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THE FUND SUMMARY

711 Pine

17%

PROJECTED IRR

4.2x

PROJECTED EQUITY MULTIPLE

Qualified Opportunity Zone

FUND

10 Years

Term

$50,000

Minimum Investment

Pref. Return/ Upside

Paid Quarterly

$3.1 Million

LP Equity

Accredited

Investors

Class A

This is an A Class investment, which entails an A+ location, High design using green materials & architecture, and produces cash flow to hedge against inflation.

Historical

This is an exceptional site on the Historic Pine Avenue on a double-sided retail street just minutes from the Waterfront.

Impact Investment

This is a great opportunity to make a difference in this community with an impact investment that will benefit the community.
  • Please enter a value greater than or equal to 50000.

Property at a Glance

# of units

24

Est. Construction Completion Date

Dec. 2024

Estimated Stabilization Date

May 2025

Avg. Unit Size

1,140 SF

Residential Rent Per Unit

$6,111

Exit Cap Rate

5%

Investment Highlights

Strong Return Portfolio & Opportunity Zone Tax Benefits

The Build-to-Core project is intended as a 10-year minimum for cashflow, appreciation/depreciation, and to benefit from the full tax incentives of the Opportunity Zone Fund. The Project is expected to yield 10.8%+ annual cash on cash to investors and a 17% IRR and 4.2x Equity Multiple for LPs over ten years. Before Opportunity Zone tax benefits, a $100,000 investment is projected to return a total of $420,000 to you over the next 10 years. As an illustration of the pre-tax cash flow timeline, a $100,000 investment is projected to return $24,000 in 36 months, $3,000 each quarter thereafter, and $312,000 at sale.

Streamlined Approval Process for Building Approval & Permits

Sponsor has officially submitter the Project’s entitlement application to the City’s Planning Department and official site plan review is underway. Sponsor has also hired Land Use Consultant Derek Burnham who was previously a Senior Planner for the City of Long Beach and is able to efficiently navigate the City’s code. Sponsor has hired the Architecture firm Withee Malcolm, who has completed the initial parking structure design, building type, unit mix, and schematic design. Sponsor has also engaged City Lift to complete fit studies for operations and interior unit layouts. Sponsor expects to receive Planning Commission Approval at the end of June 2022 and receive building permits in December 2022.

Affordable & Efficient Living with Modern Suites Designed for Roommates

As our primary business plan, we have contracted with Common, Los Angeles’ market leading, roommate centric property manager to brand, market, and operate the Project’s residential apartments with flexible leasing options. Common is a modern Property Management company that leverages technology for flexible and convenient leasing and management. You can apply online and opt into leasing an entire apartment or opt into a roommate option to lower living costs. The Project’s 24 residential units will feature 3 studio units, three 2-bed units, five 3-bed units, four 4-bed units, and nine 5-bed units.

High-Demand Location in Coastal Long Beach, California

The Long Beach project site is located just over a mile from the ocean at 711 Pine Ave in Long Beach, CA. Pine Avenue offers some of the best selections of fine dining and entertainment choices in Southern California, and the project location is an easy walk to downtown Long Beach’s many attractions such as: Shoreline Village, the Convention Center, the Pike Outlets, and the waterfront Aquarium of the Pacific. Local rents are about $4 PSF and cap rates are in the low 4% range.

Investment Process

Review the Investment Memorandum, webinar, and the Legal Documents (Subscription Agreement and PPM) and start your personal due diligence. We’ll respond and will provide support for your due diligence for 20 days. When you’re ready, you can execute the documents within your Online Investor Portal, and you’ll receive writing instructions. Your investment starts to earn your Preferred Return the day of investment and you will receive quarterly reports throughout the Project’s lifestyle. The first payment to you will be at the construction loan refinance and then every quarter thereafter until the sale.

Project Summary

Project Summary

Project Name

Long Beach 1

Address

711 Pine Ave, Long Beach, CA

Lot Size SF

7,516

Residential Rentable SF

27,351

Commercial Rentable SF

0

Total Rentable SF

27,351

# of Bed / Units / Avg Unit Size

85 Beds | 24 Units |1,140 SF

Residential Rent per Bed / Unit / SF

$1,725/Bed |$6,111/Unit | $5.36/SF

Commercial Rent per SF

$0.00/SF

Total Parking Residential / Commercial

46/0

Project Schedule

Project Schedule

PROJECT SCHEDULE

Land Control

8/15/2019

Equity Funding

12/15/2022

Construction Starts

1/31/2022

Est. Construction Completion

12/15/2024

Est. Stabilization

5/1/2025

TOTAL PROJECT LENGTH

68 Months

Financials

Financials

LAND ACQUISITIONS

Land Purchase

$2,750,000

Acquisition Loan

$1,500,000

LP Land Partner

$1,925,000

GP Fund

759,653

Soft Costs

$983,911

Closing Costs

$30,000

Land Interest Reserve

$10,625

Development Fee

$300,000

Project Contingency

$100,000

Equity Reserve

$10,117

TOTAL

$4,184,653

CONSTRUCTION START

Construction Loan

$13,034,931

New LP Equity

$3,079,455

Hard Costs

$10,064,583

Soft Costs

$655,941

Common FF&E

$832,250

Guarantee Fee

$130,349

Closing Costs

$310,699

Construction Interest Reserve

$1,461,804

Development Fee

$464,334

Project Contingency

$526,834

Project Formation

$167,592

Equity Reserve

-

TOTAL

$16,114,386

REFINANCE SENIOR LOAN

Loan Amount

$16,900,000

Loan to Value (LTW)

68%

Debt Yield

8.00%

Rate

3.75%

Amortization

30 Years

Term

10 Years

Loan Fee

2.00%

Footnotes
1 Land Partner contributed land value for LP Equity units in LLC
2 Development Management fee is billed with a 30% deposit and then billed on a straight-lined monthly basis for 36 months
3 Guarantee Fee for Construction and other GP requirements
4 Closing Costs: Assumes 2 points origination and 1 point broker fee plus $50,000 of DD
5 Construction Interest Reserve: Assumes interest rate is paid from an upfront reserve for the period of construction and stabilization
6 Project Formation costs include placement fees for equity syndication, LP procurement, and structuring costs, both in-house and to third parties
7 Equity Reserve to facilitate construction loan draws and is expected to be returned to investors at refinance

Distributions

Distributions

RETURN: 3-YR DEVELOPMENT PHASE

Return on Cost (Untrended)

5.92%

Return on Cost (Stabilized)

6.80%

Residential Exit Cap Rat

5.00%

Cost of Sale

3.00%

Overall Exit Price

$24,784,829

Exit Price (Residential)

$24,784,829

Exit Price/Unit

$1,032,701

Exit Price/Bedroom

$291,586

Exit Price/RSF

$906

Levered Project IRR

35.71%

Project Equity Multiple

1.89x

Total Project Profit

$5,129,885

RETURN: 5-YEAR HOLD

Exit Cap Rate

5.00%

Levered Project IRR

22.87%

Project Equity Multiple

2.87x

Average Cash on Cash Return

14.59%

Total Project Profit

$10,807,194

RETURN: 10-YEAR HOLD

Exit Cap Rate

5.00%

Levered Project IRR

21.46%

Project Equity Multiple

4.87x

Average Cash-on-Cash Return

12.60%

Total Project Profit

$22,319,238

Beach City Capital

We are a Los Angeles based multifamily developer focused on delivering mid-market, attainable housing solutions in Southern California’s high-demand coastal neighborhoods.

Beach City Capital is a private Real Estate Investment Firm headquartered in Hermosa Beach, California. Beach City Capital focuses on executing the development and/or repositioning of multifamily and commercial assets targeting value-add/ opportunistic returns. Our investment approach capitalizes on a broad platform, utilizing in-house Real Estate professionals whose expertise spans all phases of the Real Estate life cycle.

Our in-house staff is composed of experienced professionals in Land Use, Financial Underwriting, Architecture, Development, and Real Estate Markets – all seasoned to pursue a consistent, disciplined investment process that combines local market knowledge and hands- on expertise to created added value for our shareholders.

Each project is crafted with pristine excellence and perfection, with the goal to created spaces which modernize and inspire everyday life. We prioritize enhancing the urban fabric of the city and in doing so, our projects must be affordable, well-integrated, and positively impactful.

Location

  • LCB Airport: 15 minute distance
  • Alamitos Beach: 5 minute distance
  • The Pike Outlets: 5 minute distance
  • Seal Beach: 20 minute distance
  • Downtown Long Beach: 5 minute distance

Neighborhood Highlights

Supply Constrained Market

Long Beach has a very competitive commercial and housing market. Over the last 3 months, most homes have received only one offer and have sold for about 1% below list price. The median number of days a home in Long Beach sits on the market is only 43 days. The average home price grew 4.1% since last year up to $617K. The walkability of Long Beach allows for some errands to be accomplished on foot.

Diversified Economy

In 2018, 247 new businesses were created in Downtown Long Beach. The top industries that make up the Long Beach market are Transport/Warehousing, Science, Technology, Management, Leisure, and Healthcare. The unemployment rate is at a steady 4.4% compared to 7.4% in Los Angeles County, and 6.2% for California.

Community

Long Beach is a city with a population of 470,000 located roughly 45 minutes south of Downtown Los Angeles. The Port of Los Angeles borders Long Beach to the southwest and is a major part of the economy creating jobs in several industries. The city is a perfect example of Southern California living with its great weather and proximity to the beach.

Track Record

Disclosures

711 Pine Disclosures

Neither Beach City Capital Management, LLC (the “Manager”) nor Long Beach Fund, LLC (the “Company”) is registered as an investment adviser with the Securities and Exchange Commission (“SEC”) or any State’s securities commission. The units (the “Units”) in the Company and Long Beach Entitlement Fund, LLC (the “Entitlement Fund”) are offered under a separate private offering memorandum (the “Offering Memorandum”), have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any State’s securities laws, and are sold for investment only pursuant to an exemption from registration with the SEC and in compliance with any applicable state or other securities laws. Units are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws. Investors should be aware that they could be required to bear the financial risks of this investment for an indefinite period of time.

 

THE INFORMATION FURNISHED IN THIS MARKETING CIRCULAR IS IN ALL RESPECTS CONFIDENTIAL IN NATURE. DISSEMINATION OF THIS CIRCULAR OR DISCLOSURE OF ANY KIND MAY CAUSE SERIOUS HARM OR DAMAGE TO THE COMPANY, ENTITLEMENT FUND AND THE MANAGER. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.

 

A prospective investor should only commit to an investment in the Company/Entitlement Fund if such prospective investor understands the nature of the investment and can bear the economic risk of such investment. The Company/Entitlement Fund is speculative and involves a high degree of risk. The Company/Entitlement Fund may lack diversification, thereby increasing the risk of loss. There can be no guarantee that the Company/Entitlement Fund’s investment objectives will be achieved. The Company/Entitlement Fund’s investments are expected to be illiquid and involve a high degree of business and financial risk that could result in substantial losses. Because of the absence of a secondary market for these illiquid investments, and because of the difficulties in determining market values accurately, it may take the Company/Entitlement Fund longer to liquidate these positions (if they can be liquidated) than would be the case for more liquid investments. The prices realized on the resale of illiquid investments could be less than those originally paid by the Company/Entitlement Fund. As a result, an investor could lose all or a substantial amount of its investment. In addition, the Company/Entitlement Fund’s fees and expenses may offset its profits. There are restrictions on withdrawing and transferring interests from the Company/Entitlement Fund. In making an investment decision, you must rely on your own examination of the Company/Entitlement Fund and the terms of the prospectus. The information herein is not intended to provide, and should not be relied upon for, accounting, legal, or tax advice or investment recommendations. You should consult your tax, legal, accounting, or other advisors about the matters discussed herein. The Company/Entitlement Fund’s ability to achieve its investment objectives may be affected by a variety of risks not discussed herein. Please refer to the Offering Memorandum for additional information regarding risks and conflicts of interest.

No representations or warranties of any kind are made or intended, and none should be inferred, with respect to the economic return or the tax consequences from an investment in the Company/Entitlement Fund. No assurance can be given that existing laws will not be changed or interpreted adversely. Prospective investors are not to construe this presentation as legal or tax advice. Each investor should consult his or its own counsel and accountant for advice concerning the various legal, tax, ERISA and economic matters concerning his or its investment.

 

No person other than the Manager has been authorized to make representations, or give any information, with respect to the Units, except the information contained herein, and any information or representation not expressly contained herein or otherwise supplied by the manager in writing must not be relied upon as having been authorized by the company or any of its members. Any further distribution or reproduction of this memorandum, in whole or in part, or the divulgence of any of its contents, is prohibited.

 

This presentation is being furnished to you on a confidential basis to provide preliminary summary information regarding an investment in the Company/Entitlement Fund managed by the Manager and may not be used for any other purpose. Any reproduction or distribution of this presentation or accompanying materials, if any, in whole or in part, or the divulgence of any of its contents is prohibited. The information set forth herein does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. It is meant to be read in conjunction with the Entitlement Fund’s Offering Memorandum prepared in connection herewith, and does not constitute an offer to sell, or a solicitation of an offer to buy, by anyone in any jurisdiction in which such an offer or solicitation is not authorized or in which the making of such an offer or solicitation would be unlawful. The information contained herein does not purport to contain all of the information that may be required to evaluate an investment in the Company/Entitlement Fund. The information herein is qualified in its entirety by reference to the Offering Memorandum, including, without limitation, the risk factors therein.

 

An investment in the Company/Entitlement Fund has not been approved by any U.S. federal or state securities commission or any other governmental or regulatory authority. Furthermore, the foregoing authorities have not passed upon the accuracy, or determined the adequacy, of this document, the Offering Memorandum or Operating Agreement associated with the Company/Entitlement Fund. Any representation to the contrary is unlawful. Certain information contained in this document constitutes “forward-looking statements” which can be identified by use of forward- looking terminology such as “may,” “will,” “target,” “should,” “expect,” “attempt,” “anticipate,” “project,” “estimate,” “intend,” “seek,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to the various risks and uncertainties, actual events or results in the actual performance of the Company/Entitlement Fund may differ materially from those reflected or contemplated in such forward-looking statements

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