Apolis

Deal: St. Louis Park West End, 200 unitsPage: Deal page

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Illustrative: 200-unit multifamily development

Not live: only your team sees this

West End, St. Louis Park, Minnesota · 200 units · Mid-rise multifamily, 4 over 1 podium · Sponsored by Sample Sponsor LLC

Indicate interest
Investor IRR · net of promote
15.16%
Sponsor's projection; levered project 16.85%
Investor multiple · net of promote
2.73x
$49.9M back over 10 years
Equity ask · accredited only
$18.3M
$17.7M investors, $548K sponsor; $25,000 minimum
Cost per unit · 200 units
$260,945
$52.2M total cost, 65% loan to cost

Sources · equity funds first

$52.2M

  • Investor equity$17.7M34.0%
  • Sponsor co-investment$548K1.1%
  • Construction loan$33.9M65.0%
  • Total sources$52.2M
Permanent loan $47.0M retires the construction loan at month 61.
Uses, by budget section $52.2M, 11 sections

Uses · by budget section

$52.2M

  • Hard costs$41.0M78.6%
  • Capitalized interest and loan fees$2.3M4.4%
  • Developer fee$2.0M3.9%
  • Land and acquisition$2.0M3.8%
  • City and government$1.6M3.1%
  • Design and consultants$1.2M2.3%
  • FF&E and pre-opening marketing$625K1.2%
  • Contingency and rounding$489K0.9%
  • Financing, title and closing$418K0.8%
  • Carry and pre-open operating$290K0.6%
  • Legal, accounting and equity$212K0.4%
  • Total uses$52.2M

Top three risks

  1. Refinance rate. At the 7.15% stress the permanent loan sizes to $39.0M against $47.0M, reducing the month 61 distribution.
  2. Lease-up deficit. Modelled $1.2M against a $101K reserve. The $1.1M balance is a sponsor commitment, form not stated.
  3. Construction loan term. Base case requires both extensions (months 42 and 54): maturity month 42, refinance month 61. Extension fees of $169,611 are not in the cash flow.

Terms

Preferred returnaccrues, compounds annually
8%
Hold and exitsale at a 5.50% exit cap
10 years
Refinance, month 61about $7.7M capital, about $7.0M accrued preferred return
$14.0M
Distributionsoperations from year 4, refinance month 61, sale month 120
$49.9M
DebtSOFR plus 275 basis points, interest only, 42 months plus two 12-month extensions; permanent assumed at 5.40% fixed
65% LTC
Sponsor fees over the hold Fee tabledevelopment fee $2.0M, asset management fee $1.5M, promote $7.5M
$11.0M
Download deck (PDF)Model template (Excel)Questions (11)How this is calculatedSponsor projections.

The property

Units
200
4 plans
Building
4 over 1
5 stories, 1 podium
Net rentable SF
179,000
895 SF average unit
Gross SF
317,543
the building program, podium and parking included
Parking
230 stalls
Podium parking, 1.15 per unit
Site
2.5 acres
West End, St. Louis Park, Minnesota
Entitlement
Complete
Approval recorded, appeal period run
Construction start
Feb 2027
month 1
First delivery
Feb 2029
month 25
Stabilization
Jan 2030
11 months of lease-up
Hold
10 years
sale Jan 2037
Strategy
Ground-up development

Amenities: Fitness, Rooftop terrace, Coworking, Resident lounge, Package, Pets, Bikes

  • Studio
    30
    15.0%535 SF$1,625$3.04/SF
  • 1BR
    80
    40.0%715 SF$1,850$2.59/SF
  • 2BR
    75
    37.5%1,150 SF$2,550$2.22/SF
  • 3BR
    15
    7.5%1,300 SF$3,250$2.50/SF

Total or average200 units · 895 SF · $2,184 · $2.44/SF

Unit mix as a bar the same counts as the table

Unit mix

200 units

  • Studio30 units15.0%
  • 1BR80 units40.0%
  • 2BR75 units37.5%
  • 3BR15 units7.5%
Schedule, closing to sale 7 milestones

  1. Closing

    Jan 2027

    month 0

  2. Construction start

    Feb 2027

    month 1

  3. Construction complete

    Jan 2029

    month 24

  4. First delivery

    Feb 2029

    month 25

  5. Stabilized

    Jan 2030

    month 36

  6. Refinance

    Feb 2032

    month 61

  7. Sale

    Jan 2037

    month 120

Illustrative massing, not a rendering

The site and what is nearby

Nearby draws within 2 miles, straight-line distance

Grocery

  • Cub Foods0.15 mi
  • Shanghai Market1.3 mi
  • The Kosher Spot1.5 mi

Transit and LRT

  • West 21st Street1.7 mi
  • Beltline Boulevard1.8 mi
  • Bryn Mawr1.8 mi

Parks

  • Cedarhurst Park0.43 mi
  • Golden Hills Pond0.52 mi
  • Blackstone Park0.57 mi

Schools

  • Barry Family Campus0.68 mi
  • Meadowbrook Elementary School0.68 mi
  • Benilde-St. Margaret's0.79 mi

Major employers

  • Cyber Optics Corporation0.52 mi
  • Laser Design (GKS Services)0.53 mi
  • STOROpack Packaging Systems USA0.91 mi

Places: © OpenStreetMap contributors (ODbL), collected 2026-11-08.

The offer

Where the money goes

From what the building can bill to whose pocket it lands in.

Period shown in the flow chart
Gross potential rent$5.7M
Other income$366K
Total potential income$6.1M
Effective gross income$5.8M
Less vacancy$286K
Less concessions$29K
Less credit loss$22K
Net operating income$3.8M
Less operating expenses$1.6M
Less property tax$408K
Cash to equity$1.3M
Less capital reserve$100K
Less debt service$2.4M
Tier 1, preferred return$1.3M
To investors$1.3M
To the sponsor$0the preferred return absorbs it
Show as a table

  1. Gross potential rent$5.7M

  2. Other income$366K

  3. Total potential income$6.1M

  4. Less vacancy$286K

  5. Less concessions$29K

  6. Less credit loss$22K

  7. Effective gross income$5.8M

  8. Less operating expenses$1.6M

  9. Less property tax$408K

  10. Net operating income$3.8M

  11. Less capital reserve$100K

  12. Less debt service$2.4M

  13. Cash to equity$1.3M

  14. Tier 1, preferred return$1.3M

  15. To investors$1.3M

  16. To the sponsorthe preferred return absorbs it$0

How to read this chart

The first stabilized year shows one year of operations; the whole hold adds the refinance and the sale and shows the split between investors and the sponsor. Every stage conserves, so nothing can be left out.

The last two stages are the waterfall at work. This year's whole distribution dies inside tier one: the preferred return accrued on invested capital exceeds the year's cash, so every dollar goes to investors and the sponsor's share is zero. Tiers two through five open only in the bigger years. The whole hold view shows where they do.

Operating cash$7.3Myears 4 to 10
Refinance proceeds$14.0Myear 6
Sale proceeds, net$35.1Myear 10
Distributed to equity$56.4M
To the sponsor$7.5M
To investors$49.0M
Capital back$18.3Mto investors
Preferred return$13.2Mto investors
Profit share$17.5Mto investors
Promote$7.5Mto the sponsor
Show as a table

  1. Operating cashyears 4 to 10$7.3M

  2. Refinance proceedsyear 6$14.0M

  3. Sale proceeds, netyear 10$35.1M

  4. Distributed to equity$56.4M

  5. To the sponsor$7.5M

  6. To investors$49.0M

  7. Capital backto investors$18.3M

  8. Preferred returnto investors$13.2M

  9. Profit shareto investors$17.5M

  10. Promoteto the sponsor$7.5M

How to read this chart

The first stabilized year shows one year of operations; the whole hold adds the refinance and the sale and shows the split between investors and the sponsor. Every stage conserves, so nothing can be left out.

Over the 10-year hold the deal distributes $56.4M: $7.3M of operating cash, $14.0M from the refinance and $35.1M from the sale. The five tiers send $49.0M (87%) to investors as capital back, preferred return and their share of profit, and $7.5M (13%) to the sponsor as promote. The sponsor's co-investment earns alongside investors and sits on the investors' side.

The offer, in one paragraph

This is a 200-unit ground-up development in West End, St. Louis Park, Minnesota, built over 24 months and held for 10 years. It costs $52.2M to build ($260,945 per unit), funded with $33.9M of construction debt (65% of cost) and $18.3M of equity. It fills to stabilized occupancy 11 months after the first units deliver. The month 61 refinance distributes $14.0M: about $7.7M returns capital and about $7.0M pays accrued preferred return. The building sells in month 120 at a 5.50% cap. Investors are projected to receive $49.9M over the hold, 2.73 times their capital, an IRR of 15.16%.

Entitlements are complete: city council approval is recorded and the appeal period expired without challenge. The ten standard diligence questions, including fees, reserves and reporting, are answered under Diligence below.

Location and market

Subject average rent · pro forma
$2,184
$2.44 per SF
Comp median ask · as of 2026-11-08
$2,368
$2.43 per SF
Comps responding
4 of 10
28 priced plans, West End
Running a concession
3 of 4
responding properties
  • Studio
    $1,625
    $1,599$26 above
  • 1BR
    $1,850
    $1,849$1 above
  • 2BR
    $2,550
    $2,578$28 below
  • 3BR
    $3,250
    None postedNo comp
Location and the comp set site diagram, distances, every tracked property

Location

The site in its street grid, drawn as a schematic: the parcel, the ring of units over the podium garage, and the transit line it sits on. Sample geography, shown to set the format.

SAMPLE AVE NSAMPLE 3RD STLight rail stop (sample)Site parcel (sample)NSchematic, not a map
  • Site parcel (sample)
  • Light rail stop (sample)
  • Transit line on Sample Ave N, the horizontal street
  • Sample 3rd St, the vertical street beside the parcel
  • North is up
Light rail stop
6 minwalk, sample
Grocery anchor
9 minwalk, sample
University and hospital employment
12 mindrive, sample
Downtown core
10 mindrive, sample
Riverfront park
7 minwalk, sample
Airport
21 mindrive, sample

Sample anchors with sample times. On a live deal this card carries the parcel map and true walk and drive isochrones, computed from the address rather than stated.

The comp set

West End, St. Louis Park, and the competing west metro: the comp set the sponsor selected for this sample. Every property below posts its asking rents on its own website; collected 2026-11-08.

  • Caraway West End

    Plans priced
    8
    Median ask
    $2,570
    Median $/SF
    $2.57

    Concession: None posted

  • The Shoreham

    Plans priced
    8
    Median ask
    $1,814
    Median $/SF
    $2.43

    Concession: One month free, plus 3 months free garage

  • Millennium at West End

    Plans priced
    6
    Median ask
    $2,578
    Median $/SF
    $2.36

    Concession: Up to one month free

  • The Flats at West End

    Plans priced
    6
    Median ask
    $2,368
    Median $/SF
    $2.34

    Concession: 6 weeks free

Year built, unit count and distance to the subject are not yet collected for this set.

Blended rent per square foot, subject on the ladder

Caraway West End

$2.57

Subject (pro forma)

$2.44

The Shoreham

$2.43

Millennium at West End

$2.36

The Flats at West End

$2.34

Axis starts at $2.00 per square foot, not zero, so differences of a few cents are visible. Bar lengths compare position on the ladder, not the size of the rent.

On a blended basis the pro forma asks $2.44 per square foot, second of 5 on a ladder of 4 priced properties in the comp set the sponsor selected for this sample.

Comp rungs are the median of each property's posted plans; the subject rung is the unit-weighted average across all 200 pro forma units, a different statistic. A blended figure moves when the unit mix moves, so this ladder is a positioning read, not a comp: the like-for-like read is the card below, joined on bed count. 6 of the 10 tracked properties post no usable pricing and sit off the ladder; their reasons, every posted plan, and the nightly history live on the comps page. The subject rung is rung 2: a pro forma claim on a building that has not been built, not a posted ask.

Pro forma against the market today

Our unit rents against every plan the tracked West End set posts at the same bed count. The gray band is the span of posted asks with its median ticked; the navy mark is our pro forma.

3 of our 4 unit types have at least 3 posted comps behind them; against the medians our rents sit 2BR below, Studio and 1BR above; 3BR has no posted comp and needs a sponsor comp.

Studio

Pro forma $1,625 on 535 SF

$1,299$1,630

Pro forma asks $26 above the West End median for a studio, across 5 posted plans.

Ask median $1,599; effective median $1,466 after posted concessions.

Per square foot: $3.04 pro forma against $2.78 at the comp median, 5 plans across 2 properties.

1BR

Pro forma $1,850 on 715 SF

$1,799$2,005

Pro forma asks $1 above the West End median for a one bedroom, across 7 posted plans.

Ask median $1,849; effective median $1,691 after posted concessions.

Per square foot: $2.59 pro forma against $2.53 at the comp median, 7 plans across 4 properties.

2BR

Pro forma $2,550 on 1,150 SF

$2,355$3,470

Pro forma asks $28 below the West End median for a two bedroom, across 16 posted plans.

Ask median $2,578; effective median $2,388 after posted concessions.

Per square foot: $2.22 pro forma against $2.34 at the comp median, 16 plans across 4 properties.

3BR

Pro forma $3,250 on 1,300 SF

No tracked West End property posts a three bedroom ask today. The row waits for a posted comp rather than inventing one.

Per square foot: $2.50 pro forma; no posted comp to quote; needs a sponsor comp.

Market concession observed: 4.33 weeks median across 3 of 4 properties; the pro forma carries 0.5% of gross potential rent (0.26 weeks on a 12-month lease) at stabilization and none in lease-up.

Median of base-rent weeks off at the 3 priced properties posting a stated offer; of the rest, 1 posts no concession. Effective rent is ask x (52 - weeks off) / 52 on a 12-month lease; garage and other non-rent offers do not change it. 1 offer reads "up to" and is taken at the stated maximum. The concession rate is the sponsor's input; this is a comparison, not advice.

Two different kinds of fact, stated as such. The comp side is asking rents read from 4 of 10 tracked West End properties' own websites on November 8, 2026, and asks are not effective rents: 3 of the 4 responding properties are running a concession. Our side is the pro forma's unit rents in today's dollars, the base the model grows at 3.00% a year to stabilization in month 36, on a building that has not been built. A reality check against the comp set the sponsor selected for this sample, not a projection.

Checked against comps:Tax compsLand comps

Business plan and schedule

Units
200
across four plans
Average rent
$2,184
per unit per month
Construction
23 mo
start to complete
Lease-up
11 mo
first delivery to stabilized
  • Studio
    30
    74.3
  • 1BR
    80
    108.0
  • 2BR
    75
    116.8
  • 3BR
    15
    121.3
Show the full sectionFill by type, the building filling up, specifications, schedule and phases.

Fill by type

Each plan as a share of its own count.

About this card
The slowest line sets the stabilization date for the whole building.
Studio1BR2BR3BR

The building, filling up

One square per unit, grouped by plan. Press play, or drag to any month.

Jul 2030 · month 42
Studio28 of 30 let
1BR76 of 80 let
2BR71 of 75 let
3BR14 of 15 let
OccupiedDelivered, vacantNot delivered

189 of 200 occupied · 95% of what is builtstabilized

Specifications and amenities

The spec book, in the format a live deal publishes.

About this card
On a live deal every row is the sponsor's spec book, tied to the budget lines that price it. The metering row is the assumption the utility reimbursement income line rests on.

Unit interiors

Countertops
Quartz, 3 cm, eased edge, kitchens and baths
Cabinets
Flat panel, soft close, two tone scheme by floor
Flooring
Luxury vinyl plank throughout; porcelain tile at baths
Appliances
Stainless package, electric range, French door refrigerator, dishwasher, microwave
Laundry
Full size stacked washer and dryer in every unit
Ceilings
9 feet typical; 10 feet on the top floor
Windows
Double pane vinyl, low E, solar shades in living rooms
Smart features
Keyless entry, smart thermostat, leak sensors at wet walls

Amenities

Fitness
2,100 square feet, strength and cardio, on demand studio
Rooftop terrace
Grills, firepit lounge, downtown skyline orientation
Coworking
Eight seats, two call rooms, conference room by reservation
Resident lounge
Chef's kitchen, private dining, game wall
Package
Locker room with cold storage for grocery delivery
Pets
Dog run on the podium courtyard and a wash station
Bikes
Secured storage for 120 bikes with a repair stand

Building and systems

Construction
Four wood-framed stories over one concrete podium story with structured parking
Parking
230 structured stalls; 46 EV ready
Elevators
Two traction cabs serving all floors
Heating and cooling
Individual electric heat pumps, unit by unit control
Metering
Electric metered to each unit; water submetered and reimbursed
Connectivity
Fiber to every unit, building wide managed wifi in amenity areas
Roof
TPO membrane, 20 year warranty, solar ready conduit runs

Services

Trash
Valet pickup five nights a week, chute per floor
Access
Fob and phone credentialed, cameras at entries and garage
Management
On site manager and maintenance, two person team at stabilization

Parking runs 230 stalls against 200 units, 1.15 per unit, and it is the same podium garage the parking income line and the building's footprint come from. Sample specifications, in the format a live spec book publishes.

Schedule

Closing to sale. Every month between milestones is modelled.

  1. Closing

    Jan 2027

    month 0

  2. Construction start

    Feb 2027

    month 1

  3. Construction complete

    Jan 2029

    month 24

  4. First delivery

    Feb 2029

    month 25

  5. Stabilized

    Jan 2030

    month 36

  6. Refinance

    Feb 2032

    month 61

  7. Sale

    Jan 2037

    month 120

Construction

23 mo

start to complete

Lease-up

11 mo

first delivery to stabilized

Stabilized NOI

$3.8M

$18,936 per unit

Expense ratio

34.2%

of effective gross income

How this deal got here, and what is left

Seven phases, each ending in a dated gate.

About this card
Durations differ by deal; the sequence is the same, which makes schedules comparable.
land close
Site control3 mo
Feasibility3 mo
Entitlement6 mo
Design8 mo
Financing5 mo
Construction23 mo
Lease-up11 mo
month -14month 36
The seven phases in detail: every gate, task, owner and cadence

Site control

month -14 to -11

Gate: Purchase agreement signed, diligence period open

A seller's willingness to wait. The diligence period has to be long enough to clear entitlement risk or the deposit goes hard on an unapproved site.

  • Letter of intent · CountersignedSponsor
  • Purchase agreement · ExecutedCounsel
  • Diligence period and extensions · Dated in the PSACounsel

Feasibility

month -11 to -8

Gate: No condition found that kills the site

Geotechnical and environmental turnaround. Both are lab-bound and neither compresses for money.

  • Survey and title commitment · Exceptions reviewedCounsel
  • Geotechnical report · Borings returnedEngineer
  • Phase I environmental · No recognized conditionConsultant
  • Utility will-serve letters · Capacity confirmed in writingCivil
  • Zoning and overlay review · Entitlement path identifiedLand use counsel

Entitlement

month -8 to -2

Gate: Approval recorded, appeal period run

The commission calendar, not the staff. Nine months of this phase is waiting for an agenda, which is why submittal dates matter more than drawing speed.

  • Concept review with staff · Comments issuedLand use counsel
  • Neighborhood meeting · Held and minutedSponsor
  • Formal application · Deemed completeLand use counsel
  • Planning commission · Recommendation carriedSponsor
  • City council · ApprovedSponsor
  • Appeal period · Expired without challengeCounsel

Design

month -8 to 0

Gate: Permit set submitted

Runs alongside entitlement rather than after it, which is the single biggest schedule saving available on a development deal and the one most often given away.

  • Schematic design · Unit mix and massing fixedArchitect
  • Design development · Systems selectedArchitect
  • Construction documents · Issued for permitArchitect
  • Guaranteed maximum price · Signed with the contractorContractor

Financing

month -5 to 0

Gate: Loan and equity close the same day as land

Lender credit committee and the equity raise, in parallel. Neither will close ahead of entitlement.

  • Construction loan term sheet · AcceptedSponsor
  • Equity raise · Subscriptions fundedSponsor
  • Credit committee · Commitment issuedLender
  • Closing · Land acquired, loan recordedCounsel

Construction

month 1 to 24

Gate: Certificate of occupancy, final

The building, and winter. A Minneapolis deal that misses its concrete window loses a season rather than a month.

  • Notice to proceed · IssuedSponsor
  • Foundations complete · InspectedContractor
  • Topping out · Structure completeContractor
  • First certificate of occupancy · First units deliverableCity
  • Substantial completion · Punch list issuedContractor

Lease-up

month 25 to 36

Gate: Stabilized occupancy held for three months

Absorption by unit type. The slowest plan sets the date, not the average.

  • Marketing and pre-leasing · Reservations takenProperty manager
  • First move-ins · Rent commencesProperty manager
  • Stabilization · Occupancy threshold metProperty manager
  • Permanent loan readiness · Coverage seasoned for the month 61 refinanceSponsor

What repeats

The durations above are different on every deal. The cadences are not, and they are what turn a duration from a hope into arithmetic: nine submittals on a two-week review cycle is eighteen weeks whatever anyone wanted.

Owner, architect and contractorWeekly

The meeting that catches a coordination problem while it is still a drawing.

Planning commissionFirst and third Tuesday

Agenda closes ten working days out. Miss it and the next slot is a fortnight, not a day.

City councilEvery other Friday

Only hears items the commission has already recommended.

Lender drawMonthly

Inspection, then funding. The gap between the two is working capital.

Investor reportingQuarterly

Actual against projected, from the same record that produced the projection.

Budget: sources and uses

Total cost
$52.2M
$260,945 per unit
Hard costs
$41.0M
$205,000 per unit, 78.6%
Land
$2.0M
$10,000 per unit
Per square foot · total cost
$164
gross, $292 net rentable
  • Hard costs
    $41,000,000
    78.6%
  • Capitalized interest and loan fees
    $2,294,170
    4.4%
  • Developer fee
    $2,040,000
    3.9%
  • Land and acquisition
    $2,000,000
    3.8%
  • City and government
    $1,600,000
    3.1%
  • Design and consultants
    $1,221,000
    2.3%
  • FF&E and pre-opening marketing
    $625,000
    1.2%
  • Contingency and rounding
    $488,510
    0.9%
  • Financing, title and closing
    $418,270
    0.8%
  • Carry and pre-open operating
    $289,648
    0.6%
  • Legal, accounting and equity
    $212,403
    0.4%
Show the full sectionSources, draws, debt balances, line-by-line attribution and basis.

Sources

Equity funds first, then the loan draws.

About this card
Equity is exhausted before the loan draws, which is what a construction lender requires.
35%65%
Equity$18.3M
Construction loan$33.9M
Total sources$52.2M

Loan to cost

65%

on drawn balance

Capitalized interest

$2.2M

into basis

One commitment stands behind the sources without appearing in them: the part of the lease-up deficit the reserve does not cover is the sponsor's to fund, with the figures in diligence answer three.

Uses, by section

The bar is each section's share of total project cost.

About this card
Every line in the budget rolls into one of these.
Hard costs$41.0M78.6%
Capitalized interest and loan fees$2.3M4.4%
Developer fee$2.0M3.9%
Land and acquisition$2.0M3.8%
City and government$1.6M3.1%
Design and consultants$1.2M2.3%
FF&E and pre-opening marketing$625K1.2%
Contingency and rounding$489K0.9%
Financing, title and closing$418K0.8%
Carry and pre-open operating$290K0.6%
Legal, accounting and equity$212K0.4%

The draw schedule

When the money has to be there.

About this card
Closing costs at month zero, then a back-loaded construction curve, equity funding first.
Month 0: $2.6M drawnMonth 0: $2.6M from equityMonth 1: $40K drawnMonth 1: $40K from equityMonth 2: $187K drawnMonth 2: $187K from equityMonth 3: $399K drawnMonth 3: $399K from equityMonth 4: $659K drawnMonth 4: $659K from equityMonth 5: $959K drawnMonth 5: $959K from equityMonth 6: $1.3M drawnMonth 6: $1.3M from equityMonth 7: $919K drawnMonth 7: $919K from equityMonth 8: $1.1M drawnMonth 8: $1.1M from equityMonth 9: $971K drawnMonth 9: $971K from equityMonth 10: $1.2M drawnMonth 10: $1.2M from equityMonth 11: $1.4M drawnMonth 11: $1.4M from equityMonth 12: $1.6M drawnMonth 12: $1.6M from equityMonth 13: $1.8M drawnMonth 13: $1.8M from equityMonth 14: $2.0M drawnMonth 14: $2.0M from equityMonth 15: $2.2M drawnMonth 15: $1.2M from equityMonth 16: $2.5M drawnMonth 16: $0 from equityMonth 17: $2.7M drawnMonth 17: $0 from equityMonth 18: $3.0M drawnMonth 18: $0 from equityMonth 19: $3.3M drawnMonth 19: $0 from equityMonth 20: $3.6M drawnMonth 20: $0 from equityMonth 21: $3.9M drawnMonth 21: $0 from equityMonth 22: $4.3M drawnMonth 22: $0 from equityMonth 23: $4.6M drawnMonth 23: $0 from equityMonth 24: $5.0M drawnMonth 24: $0 from equity
Funded by equityFunded by the loanCumulative, to $52.2M

Capital is called at closing and then monthly against completed work, through month 15, when equity is exhausted and the loan takes over. Calls follow the curve above, not a schedule of round numbers.

Debt outstanding, by facility

Construction draws, retired at the refinance, then the permanent loan.

About this card
Construction draws accumulate, the refinance retires them in month 61, and the permanent loan amortizes to the sale.
Construction loanPermanent loan

Where every dollar comes from and where it goes

Equity-first attribution, line by line, month by month.

About this card
Not a proportional split. Funding is equity-first, so the attribution knows which dollar of which line came from equity and which from the loan, month by month. Land and closing are pure equity because they fall at month zero, before the loan draws.

Equity $18.3MConstruction loan $33.9M

  • Hard costs$41.0M

    equity $11.8M · loan $29.2M

  • Capitalized interest and loan fees$2.3M

    equity $413K · loan $1.9M

  • Developer fee$2.0M

    equity $585K · loan $1.5M

  • Everything under 1.5% of cost (5 lines)$2.0M

    equity $695K · loan $1.3M

  • Land and acquisition$2.0M

    equity $2.0M · no loan

  • City and government$1.6M

    equity $1.6M · no loan

  • Design and consultants$1.2M

    equity $1.2M · no loan

Basis against replacement cost and recent trades

All-in cost to build, beside what it would cost to build the same building today and what comparable buildings have sold for. The comparison figures here are sample values; a live sponsor states them with sources.

Basis per unit
$260,945
Per net rentable SF
$292
Per gross SF
$164
Replacement cost per unit
$285,000
Source
Sponsor's estimate to build the same program on a comparable site today, land and soft costs included (sample)
Basis against replacement
-$24,055

Recent trades

  • Trade 1

    Property
    Sample: 186-unit podium, Minneapolis (sample)
    Date
    Mar 2026
    Units
    186
    Price per unit
    $268,000
    Cap rate
    5.10%
    Basis against the trade
    -$7,055

  • Trade 2

    Property
    Sample: 224-unit podium, Edina (sample)
    Date
    Nov 2025
    Units
    224
    Price per unit
    $281,500
    Cap rate
    4.95%
    Basis against the trade
    -$20,555

  • Trade 3

    Property
    Sample: 150-unit podium, Bloomington (sample)
    Date
    Jul 2025
    Units
    150
    Price per unit
    $247,000
    Cap rate
    5.30%
    Basis against the trade
    +$13,945

How the TIF works on this deal

  1. Base taxes stay with the cityBase taxes per yearSponsor to confirm
  2. New building raises the tax billProjected taxes per year$440,000
  3. The increment repays the TIF noteIncrement per yearSponsor to confirm
  4. The note reduces equity neededTIF note (not modeled)Sponsor to confirm
Equity required in the model$18,266,779
How the figures are sourced
  • Projected taxes: units times real estate taxes per unit in the model.
  • Base taxes and the increment come from the city's TIF analysis, not the model.
  • The model carries TIF as an upfront source ahead of equity.
  • Note terms, term length and any pay-as-you-go structure: sponsor to confirm.

Land and operating costs, checked:Land compsOperating expenses

Financing

Construction loan
$33.9M
65% of cost, interest only
Construction rate · underwritten
7.00%
5.90% today, 7.25% capped
Term
42 months
2 of 2 extensions neededfinal maturity month 66
Permanent loan · month 61
$47.0M
$39.0M at the 7.15% stress

How the permanent loan is sized

Three tests; the binding one sets the loan.

At maximum loan to value

$48.2M

At minimum coverage

$47.0M

Binding: this is the loan

At the rate stress, 7.15%

$39.0M

Coverage binds here, at $47.0M. The refinance pays off $33.0M of construction debt and distributes $14.0M to equity. The model states a payoff of $32,982,304; the draw schedule carries the loan at $33,922,221 drawn (the $33,922,000 commitment plus $221 of draw rounding), interest only, with no stated paydown. The $939,916 difference is not explained by a stated line. Paid off at the drawn balance, the $47,032,000 loan less $25,000 of closing costs would distribute $13.1M, not $14.0M. The pro forma link settles it. The stress case prices the same coverage test at 7.15%, the 5.40% assumption plus 175 basis points, and sizes to $39.0M: the gap between the two loans is the exposure to rates between now and month 61.

Show the full sectionBoth loans in full: rate, term, extensions, recourse and covenants.

Both loans, in full

Rate, term, amortization, extensions, recourse and covenants.

About this card
The assumption each one rests on is called out rather than buried.

Construction loan

$33.9M

Lender
Sample Regional Bank, construction lending group, term sheet signed
Rate
Floating, SOFR plus 275 basis points, with a purchased cap at 4.50%. Underwritten at 7.00% all in: the cash flow's construction debt service is drawn at that rate, above today's 5.90% indication and below the 7.25% capped maximum
Index
SOFR, currently indicated at 3.15%
Term
42 months from closing
Amortization
Interest only
Extensions
Two twelve-month extensions, each conditional on 1.15x coverage on trailing three months and a 25 basis point fee. Fully extended the loan reaches month 66, five months past the modelled refinance.
Recourse
Completion guarantee and standard non-recourse carve-outs from the sponsor principals. No repayment guarantee. Standing behind the completion guarantee alongside investors: the sponsor's own $548,045 co-investment, 3.0% of the equity.
Prepayment
Open after month 18, no penalty
Covenants
  • 1.20x minimum debt service coverage from stabilization
  • In-balance test at each draw
  • Minimum liquidity and net worth on the guarantors, with the figures set in the loan agreement; this sample does not fix them

Base case requires both extensions (months 42 and 54)

Extension 1, month 42: fee25 bp on $33,922,221 outstanding
$84,806
Extension 1: projected trailing 3-month coveragetest 1.15x, passes
1.60x
Extension 2, month 54: fee25 bp on $33,922,221 outstanding
$84,806
Extension 2: projected trailing 3-month coveragetest 1.15x, passes
1.64x
Extension fees, totalNot in the cash flow or the uses
$169,611
Fully extended maturity5 months past the month 61 refinance
month 66

Floating. The cap strike of 4.50% is 135 basis points above the indicated index, so the first 135 basis points of any rate move is carried by the deal and not by the cap.

Permanent loan

$47.0M

Lender
Not yet engaged: agency or life company execution assumed at month 61
Rate
Assumed at 5.40% fixed
Term
10 years from funding in month 61
Amortization
30 years
Extensions
None
Recourse
Non-recourse with standard carve-outs
Prepayment
Yield maintenance to year seven, open thereafter
Covenants
  • 1.20x minimum debt service coverage, tested annually

This is a forecast of a rate five years out, not a commitment. It is the single most consequential undisclosed assumption on most deal pages: the whole refinance distribution rests on it, and at 6.50% instead the loan sizes to roughly $41.6M and the month 61 distribution falls from $14.0M to about $8.6M.

The refinance payoff, against the drawn balance

Drawn construction balance, interest onlyFrom the draw schedule, carried to the refinance
$33,922,221
Payoff stated in the workbook
$32,982,304
Variance, a named seamNo stated line pays the loan down; neither figure is changed here
$939,916
Net proceeds, as stated
$14,024,696
Net proceeds if the payoff is the drawn balance
$13,084,779
Refinance transaction costs, sponsor inputSource: none yet; as of: none yet. Lender, title, legal and third-party costs of the month 61 refinance. Deducted from net proceeds once the sponsor states them.
Not stated
Net proceeds after entered costs
$14,024,696

Projected cash flow

Untrended yield on cost
6.5%
at today's rents and costs
Trended yield on cost
7.3%
after 3 years of rent growth
Net to all equity, before the split
$38.2M
distributions less contributions over 10 years; investors receive $49.9M gross after the split
Year 10 cash to equity
$36.2M
includes net sale proceeds
Show the full sectionRevenue build, untrended against trended, and the ten-year table.

How rent becomes income

Gross potential rent to effective gross income, today and stabilized.

About this card
One rate set applies to both columns; the difference between them is rent growth.

Gross potential rent is every unit at its asking rent for twelve months, derived from the mix rather than entered: 200 units at $2,184 blended, which is $5,241,000 a year. Every deduction below is a stated rate applied identically to both columns. The two differ by 3 years of rent growth at 3.0% and nothing else.

Line, dollars a yearTodayStabilized
Gross potential rentevery unit at its asking rent, twelve months
5,241,000
5,726,982
Loss to leasenone: a new building has no leases below market
–
–
Vacancy5.0% of gross potential
(262,050)
(286,349)
Rent billed
4,978,950
5,440,633
Concessions0.5% of gross potential
(26,205)
(28,635)
Credit loss0.4% of rent billed
(19,916)
(21,763)
Net rental income
4,932,829
5,390,236
Utility reimbursement
120,654
131,842
Parking
164,223
179,451
Storage, pet and other
50,272
54,934
Effective gross income
5,267,979
5,756,463

Other income is $153 per unit per month at stabilization across utility reimbursement, parking and storage. On a podium building with structured parking that sits inside convention, which is roughly $120 to $185. It is the one line here carried as a residual rather than a rate, and on a live deal it is a sponsor input with a source rather than a plug.

Break-even, in both debt regimes, at both thresholds

Before the refinance

Covers its bills, 1.00x72.9%occupancy$1,804average rent
Covenant breach, 1.20x80.7%occupancy$2,014average rent

After the refinance

Covers its bills, 1.00x85.7%occupancy$2,150average rent
Covenant breach, 1.20x96.1%occupancy$2,430average rent

Two thresholds. At 1.00x the building covers its bills: after the refinance that takes $2,150 against today's asking of $2,184, so rents can fall below today and the loan is still paid. The covenant is the stricter line a lender tests, and the margin there is thinner: the permanent loan is sized at 1.20x on income five years out, so at the covenant it needs $2,430, above today's asking. The margin depends on rent growth between now and month 61; a loan sized at its covenant has no covenant margin on the day it funds.

Before any rent growth, and after

The same building, cost and cap rate, three years apart. The difference is projected rent growth.

At today's rents
Effective gross income
5,267,979
Operating expenses
(1,482,000)
Property tax
(386,000)
Net operating income
3,399,979

Untrended yield on cost

6.5%

Value at 5.25%

$64.8M

First stabilized year, as projected
Effective gross income
5,756,463
Operating expenses
(1,561,286)
Property tax
(408,000)
Net operating income
3,787,177

Trended yield on cost

7.3%

Value at 5.25%

$72.1M

The two sides differ by 3 years of rent growth and nothing else: the same building, the same cost, the same 5.25% cap rate. That gap is $387K of annual income, worth $7.4M of value, and it is the part of the case that depends on a market rather than on the building. A deal that only works trended is a bet on rent growth; this one clears 6.5% on cost before any growth at all.

Ten-year cash flow

Years from closing; the last two rows are the split.

About this card
Years run from closing, so construction occupies years one and two and the first operating year is year four. Negative figures in the early years are capital contributions during construction. Occupancy after stabilization is held flat, a stated simplification. The last two rows are the split between investors and the sponsor, detailed in the next section.

All figures in dollars, one block per year

  1. Year 1Construction

    Average occupancy
    –
    Effective gross income
    –
    Operating expenses
    –
    Property tax
    –
    Net operating income
    –
    Capital reserve
    –
    Debt service
    –
    Capital event
    (13,272,070)
    Cash to equity
    (13,272,070)
    To investors
    –
    To the sponsor
    –

  2. Year 2Construction

    Average occupancy
    –
    Effective gross income
    –
    Operating expenses
    –
    Property tax
    –
    Net operating income
    –
    Capital reserve
    –
    Debt service
    –
    Capital event
    (4,994,709)
    Cash to equity
    (4,994,709)
    To investors
    –
    To the sponsor
    –

  3. Year 3Lease-up

    Average occupancy
    45.7%
    Effective gross income
    2,484,000
    Operating expenses
    (969,000)
    Property tax
    (381,000)
    Net operating income
    1,134,000
    Capital reserve
    (50,000)
    Debt service
    (2,374,000)
    Capital event
    –
    Cash to equity
    (1,290,000)
    Funded by the lease-up reserve ($100,868) and a sponsor commitment ($1,139,132) for the $1,240,000 operating deficit; funding for the $50,000 capital reserve deposit is not stated. Not investor capital, so not in the net to equity.
    To investors
    –
    To the sponsor
    –

  4. Year 4First stabilized year

    Average occupancy
    94.6%
    Effective gross income
    5,756,463
    Operating expenses
    (1,561,286)
    Property tax
    (408,000)
    Net operating income
    3,787,177
    Capital reserve
    (100,000)
    Debt service
    (2,374,000)
    Capital event
    –
    Cash to equity
    1,313,177
    To investors
    1,313,177
    To the sponsor
    –

  5. Year 5Operating

    Average occupancy
    94.6%
    Effective gross income
    5,898,000
    Operating expenses
    (1,598,143)
    Property tax
    (418,000)
    Net operating income
    3,881,857
    Capital reserve
    (102,500)
    Debt service
    (2,374,000)
    Capital event
    –
    Cash to equity
    1,405,357
    To investors
    1,405,357
    To the sponsor
    –

  6. Year 6Refinance

    Average occupancy
    94.6%
    Effective gross income
    6,045,000
    Operating expenses
    (1,637,097)
    Property tax
    (429,000)
    Net operating income
    3,978,903
    Capital reserve
    (105,060)
    Debt service
    (3,155,981)
    Capital event
    14,024,696
    Cash to equity
    14,742,558
    To investors
    14,742,558
    To the sponsor
    –

  7. Year 7Operating

    Average occupancy
    94.6%
    Effective gross income
    6,196,000
    Operating expenses
    (1,677,625)
    Property tax
    (440,000)
    Net operating income
    4,078,375
    Capital reserve
    (107,687)
    Debt service
    (3,155,981)
    Capital event
    –
    Cash to equity
    814,707
    To investors
    814,707
    To the sponsor
    –

  8. Year 8Operating

    Average occupancy
    94.6%
    Effective gross income
    6,351,000
    Operating expenses
    (1,719,665)
    Property tax
    (451,000)
    Net operating income
    4,180,335
    Capital reserve
    (110,379)
    Debt service
    (3,155,981)
    Capital event
    –
    Cash to equity
    913,975
    To investors
    913,975
    To the sponsor
    –

  9. Year 9Operating

    Average occupancy
    94.6%
    Effective gross income
    6,510,000
    Operating expenses
    (1,763,157)
    Property tax
    (462,000)
    Net operating income
    4,284,843
    Capital reserve
    (113,138)
    Debt service
    (3,155,981)
    Capital event
    –
    Cash to equity
    1,015,724
    To investors
    1,015,724
    To the sponsor
    –

  10. Year 10Sale

    Average occupancy
    94.6%
    Effective gross income
    6,672,000
    Operating expenses
    (1,806,036)
    Property tax
    (474,000)
    Net operating income
    4,391,964
    Capital reserve
    (115,966)
    Debt service
    (3,155,981)
    Capital event
    35,121,834
    Cash to equity
    36,241,851
    To investors
    28,787,743
    To the sponsor
    7,454,108
  • Year 1Equity drawn for land and early construction
  • Year 2Remaining equity drawn
  • Year 3Lease-up deficit: the reserve covers part, a sponsor commitment funds the rest (diligence 3)
  • Year 6Net refinance proceeds returned to investors
  • Year 10Net sale proceeds
  • Year 3 cashFunded by the lease-up reserve ($100,868) and a sponsor commitment ($1,139,132) for the $1,240,000 operating deficit; funding for the $50,000 capital reserve deposit is not stated. Not investor capital, so not in the net to equity.

Net to all equity, before the split$38.2M

Returns

Project, unlevered
10.27%
before any debt
Project, levered
16.85%
3.14x before the split
Investor
15.16%
2.73x after the split
Sponsor
37.24%
$7.5M promote, earned last
Show the full sectionThe dollar journey, return bridge, profit sources, and sale-year returns.

One investor's $100,000, start to finish

The deal in four stops, at the investor multiple.

Goes in$100,000Projected back over 10 years$273,0802.73 times the money15.16% a year
  1. 1

    Years 1 to 2

    Your money builds the building

    Capital is called as construction is paid for. Equity goes into the ground first, before the lender funds anything.

  2. 2

    Years 3 to 4

    The building fills and distributions begin

    An 8% preferred return accrues from the day capital is funded. Whatever a year does not pay in cash is deferred, not forgiven.

  3. 3

    Year 6

    The refinance distributes cash to investors

    The permanent loan pays off construction debt and distributes $14.0M: about $7.7M returns capital and about $7.0M pays accrued preferred return. Unreturned capital stays invested until the sale.

  4. 4

    Year 10

    The sale completes the return

    The building sells, the loan is repaid, and the balance of capital and profit distributes through the waterfall.

IRR, multiple, cash-on-cash and distribution mix, defined and computed.How this is calculated

Where the money comes back from, at the project level

Three events: operations, an early refinance, and the sale.

About this card
Three events, not one: operating distributions across the hold, a refinance that returns capital early, and the sale. Shown before the sponsor's split, because the refinance and sale figures are project-level. The investor's share is the table beside it.

  1. Investedat closing and during construction-$18.3M

  2. Operationsacross the hold$8.2M

  3. Refinancemonth 61$14.0M

  4. Salemonth 120$35.1M

  5. Net gain2.14x gain, 3.14x back$39.1M

The month 61 refinance distributes $14.0M, about $7.7M of it capital and about $7.0M accrued preferred return. Cash returned before the sale raises the IRR relative to the same dollars arriving at the sale.

The split

What the project earns, and how it divides.

Project, unlevered10.27%before any debt
Project, levered16.85%3.14x before the split
Investor15.16%2.73x after the split
Sponsor37.24%$7.5M promote, earned last

The sponsor earns a promote only after investors have their capital back and their preferred return. The gap between the levered project return and the investor return reflects the promote, the sponsor's fees, and the sponsor's pari passu return on its co-investment.

Sponsor co-investment
$548K
3.0% of equity, pari passu with investors
Refinance distribution, month 61
$14.0M
about $7.7M capital, about $7.0M accrued preferred return
Untrended yield on cost
6.51%
At today's rents and costs. 7.26% trended to stabilization.

Sensitivity

One result across two drivers, around the base case. The sponsor chooses the grid.

LP IRR by exit cap and rent growth after year 4, the sponsor's projection.

Base case: 5.50% exit cap, 2.50% rent growth after year 4, LP IRR 15.16%, the model's figure; other cells add the change from the model's base

LowHigh

LP IRR by exit cap (rows) and rent growth after year 4 (columns). Base case: 5.50% exit cap, 2.50% rent growth after year 4, LP IRR 15.16%, the model's figure; other cells add the change from the model's base.
Exit cap / Rent growth after year 41.50%2.00%2.50%3.00%3.50%
5.00%14.85%15.84%16.77%17.60%18.36%
5.25%13.98%14.99%15.96%16.88%17.67%
5.50%13.14%14.18%15.16%Base16.10%17.00%
5.75%12.31%13.38%14.39%15.35%16.27%
6.00%11.50%12.60%13.64%14.62%15.56%

Sources of profit

Cash flow, loan paydown, and value created. The three sum to the project profit.

21%69%

The building pays cash

$8.2M

21.0% of the profit

Rent, less expenses, less the loan payment. Collected across the hold and paid as distributions.

The tenants pay the loan down

$3.8M

9.7% of the profit

The permanent loan amortizes from year six. Every payment the rent makes shifts a little of the building from the bank to the owners.

The building is worth more than it cost

$27.1M

69.4% of the profit

Built for less than finished buildings trade for, then sold. Most of this is the development spread, earned by building, not by waiting for a market. Net of the costs of selling.

A deal leaning mostly on the first two engines is carried by the building; one leaning on the third is carried by the exit. Most of this deal's third engine is the development spread, earned by building at a cost below what finished buildings trade for, not a bet on the market improving.

Return by year of sale

The annual return and the multiple if the building sold in each year of the hold.

Annual return if sold that year

Multiple on the money if sold that year

The rate peaks the year the building is finished and falls every year after, because the development profit is earned by building and each further year dilutes it with operating returns. The multiple climbs the whole way, because money keeps arriving. Which end of this chart an investor prefers depends on what their capital would otherwise do, which is exactly why the page shows both instead of picking one. A constant 5.50% exit cap in every year, the deal's own 0.86% costs of sale, the next year's income over the cap, and that month's loan balance repaid. Project level, before the split.

Tax programs (opportunity zone, depreciation) and the capital gains comparison.How this is calculated

Distribution waterfall

Preferred return
8%
accrues, compounds annually
To investors over the hold
$49.9M
2.73 times capital, on all $18.3M of equity, the sponsor's co-investment included
Sponsor promote
$7.5M
earned last
Sponsor co-investment
$548K
pari passu with investors
  • 1. Preferred return
    100%
    0%
  • 2. Return of capital
    100%
    0%
  • 3. Sponsor catch-up
    50%
    50%
  • 4. Residual to a 15% investor return
    80%
    20%
  • 5. Residual above a 15% investor return
    70%
    30%
Show the full sectionThe tiers by year, at the sale, partnership terms and the agreement.

Distributions by tier, over the hold

Money through each tier over the hold, on one scale.

About this card
Each step's width is the money that flows through that tier over the hold, on one scale. The connectors carry what is still unpaid; the fourth step ends where the money runs out.

Investors put in $18.3Mand over ten years the deal pays $56.4M back to equity. Every dollar walks down the same staircase.

To investorsTo the sponsor

Waterfall arithmetic only: every distribution scaled by one factor, the five rules rerun. What rents or the exit do to the cash is the sponsor's model, not this chart.

Everything distributed

Operating cash, the refinance, and the sale, all ten years

$56.4M

1 · Preferred return

Until investors have received an 8% annual return on unreturned capital

$13.2M investors · sponsor $0

$13.2M

2 · Return of capital

Until investors have received all contributed capital back

$18.3M investors · sponsor $0

$43.3M spills on to this tier

$18.3M

3 · Sponsor catch-up

Until the sponsor has received 20% of profit distributed to that point

$4.4M investors · $4.4M sponsor

$25.0M spills on to this tier

$8.8M

4 · Residual to a 15% investor return

Until investors have received a 15% annual return

$13.2M investors · $3.1M sponsor

$16.2M spills on to this tier

The money runs out 64% into this tier. Clearing it would take $9.2M more.

$16.2M

5 · Residual above a 15% investor return

All remaining proceeds

$0 · never reached in this scenario

Where it lands

The same $56.4M, summed by who keeps it

Investors keep $49.0M$7.5M

Investors keep 87% of everything distributed. The sponsor's $7.5M arrives entirely in year ten, at the sale, after investors have collected an 8% preferred return, every dollar of capital back, and the first $31.4M the deal ever distributes. Navy is all equity, including the sponsor's own co-investment returned pari passu; orange is the promote alone, run through the tier rules.

More waterfall viewsThe same five tiers by year, and the sale day from the closing table down.

The waterfall, year by year

One bar per year, segmented in tier order.

About this card
Each bar is one year's distribution on one shared scale, segmented in tier order. Operations pay the preferred return, the refinance reaches capital, and only the sale reaches the profit tiers.

Years one to three distribute nothing: the building is being built. From year four, every bar is that year's cash in the order the tiers take it.

To investorsTo the sponsor

Year 4

operations

$1.3M

Year 5

operations

$1.4M

Year 6

the refinance

$14.7M

Year 7

operations

$0.8M

Year 8

operations

$0.9M

Year 9

operations

$1.0M

Year 10

the sale

$36.2M

Operating years pay into tier one without closing it, because the preferred return accrues faster than small years can pay it down: unpaid pref rolls forward. The refinance in year six is the first event that reaches tier two, returning $7.7M of capital, and the sale is the only event that reaches tiers three and four, which is why every orange pixel on this chart sits in the final bar.

The sale, from the closing table down

The sale price, from the lender down through the tiers.

About this card
The sale price pays the lender first, then the costs of sale, and the remainder runs through the tiers. The promote is earned at the sale.

The building sells in month 120 for $80.0MThe final year moves $81.1M in all: the price, plus $1.1M of that year's operating cash. Here is that day, top to bottom.

Everything on the table

The sale price and the final year's operating cash

$81.1M

The permanent loan is repaid

No equity dollar moves before the lender is whole

$43.3M

Costs of sale

Broker, transfer and legal, 2.0% of the price

$37.8M continues

$1.6M

Tier 1 · Preferred return

The unpaid balance accrued through year nine, cleared here

$0.8M investors · sponsor $0

$36.2M reaches equity

$0.8M

Tier 2 · Return of capital

The capital still out after the refinance, every dollar of it back

$10.4M investors · sponsor $0

$35.4M continues

$10.4M

Tier 3 · Sponsor catch-up

50 / 50 until the sponsor holds 20% of profit distributed

$4.4M investors · $4.4M sponsor

$25.0M continues

$8.8M

Tier 4 · Residual to a 15% investor return

80 / 20 toward a 15% investor return

$13.2M investors · $3.1M sponsor

$16.2M continues

The day ends 64% into this tier. Filling it would take $9.2M more.

$16.2M

The summary

The same $81.1M, by who keeps it

$43.3M$28.8M

Lender $43.3M · costs of sale $1.6M · investors $28.8M · sponsor $7.5M

This is the day the promote exists: every sponsor profit dollar in the deal, $7.5M, arrives in this column, after the lender's $43.3M, after the costs, after the last of the preferred return and all remaining capital. Ten years of work, settled in one closing.

Partnership terms Removal, clawback, key person, default and transfer.

Partnership terms

The limited partnership agreement governs. Each line is the sponsor's statement with the section it comes from; nothing here is a summary written by Apolis.

  • General partner removal, for cause

    What counts as cause, who votes, and the vote required.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • General partner removal, without cause

    Whether it is available, the vote required, and what the removed partner keeps.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • Clawback

    Whether promote paid early is returned if later results fall short, and how it is secured.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • Key person

    Who the key persons are and what happens if one leaves.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • Capital call default

    What happens to an investor who misses a capital call.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • Transfer rights

    Whether and how an investor may transfer an interest, and who must consent.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

  • Reporting

    What investors receive, how often, and by when after period end.

    Sponsor statement
    Sponsor input, not stated
    LPA section
    [LPA SECTION]

The tiers walked through as a hundred dollars, comparison deals, and alternative waterfall structures.How this is calculated

The tiers, as the agreement states them each tier's test, split, and the clawback

Preferred return

8%

Accrues, compounds annually

Sponsor co-investment

$548K

3.0% of equity, alongside investors

Investor capital

$17.7M

97.0% of equity

  1. 1Preferred return

    100%investor / sponsor

    Until investors have received an 8% annual return on unreturned capital

    Accrues from the date capital is funded and compounds annually. Unpaid preferred return rolls forward rather than lapsing, so a year without a distribution is deferred, not forgiven.

  2. 2Return of capital

    100%investor / sponsor

    Until investors have received all contributed capital back

    The refinance in month 61 is the first event large enough to return capital. Until this tier closes the sponsor earns no promote at all.

  3. 3Sponsor catch-up

    50%50%investor / sponsor

    Until the sponsor has received 20% of profit distributed to that point

    A 50/50 catch-up rather than a 100/0. The sponsor reaches its 20% more slowly, and investors keep receiving cash throughout the tier instead of pausing.

  4. 4Residual to a 15% investor return

    80%20%investor / sponsor

    Until investors have received a 15% annual return

    The tier the base case lands inside. The projected investor return of 15.16% sits a fraction above the hurdle, so most of the promote is earned here.

  5. 5Residual above a 15% investor return

    70%30%investor / sponsor

    All remaining proceeds

    Only reached if the deal outperforms. Nothing in the base case is distributed in this tier.

Clawback

Tested at final liquidation. If the sponsor has received promote in excess of what the realised results support, it is repaid to investors before the partnership closes.

If more capital is needed

Called pro rata on fourteen days' notice. An investor who does not fund is diluted on the formula set out in the operating agreement, not at the sponsor's discretion, and the dilution is capped at 1.5 times the shortfall.

Risks and downside cases

Investor return, as modeled
15.2%
center of the grid
Worst corner of the grid
4.3%
rent -9%, exit cap 6.25%
Lease-up deficit
$1.2M
against a $101K reserve
Coverage covenant
1.20x
net operating income over debt service
Show the full sectionThe rent and cap grid, downside cases, and covenant coverage.

Investor return, rent crossed with exit cap

One block per market rent case, exit cap rate on each cell. Green clears 12.0%, red does not. The outlined cell is the deal as drawn.

Market rent: -9%

4.75%
13.0%
5.00%
11.6%
5.25%
10.1%
5.50%
8.7%
5.75%
7.2%
6.00%
5.8%
6.25%
4.3%

Market rent: -6%

4.75%
15.2%
5.00%
13.7%
5.25%
12.3%
5.50%
10.8%
5.75%
9.4%
6.00%
7.9%
6.25%
6.5%

Market rent: -3%

4.75%
17.4%
5.00%
15.9%
5.25%
14.5%
5.50%
13.0%
5.75%
11.6%
6.00%
10.1%
6.25%
8.7%

Market rent: As modeled

4.75%
19.5%
5.00%
18.1%
5.25%
16.6%
5.50%
15.2%
5.75%
13.7%
6.00%
12.3%
6.25%
10.8%

Market rent: +3%

4.75%
21.7%
5.00%
20.2%
5.25%
18.8%
5.50%
17.3%
5.75%
15.9%
6.00%
14.4%
6.25%
13.0%

Market rent: +6%

4.75%
23.8%
5.00%
22.4%
5.25%
20.9%
5.50%
19.5%
5.75%
18.0%
6.00%
16.6%
6.25%
15.1%

Market rent: +9%

4.75%
26.0%
5.00%
24.5%
5.25%
23.1%
5.50%
21.6%
5.75%
20.2%
6.00%
18.7%
6.25%
17.3%

The investor return is above an illustrative 12% allocator screen across most of this grid. It falls below the screen when rents miss by more than six percent and the exit cap widens at the same time.

Downside: overrun, delay, capital loss, refinance stress

What investors are projected to receive if the building costs more, finishes later, or sells into a weaker market, and what the refinance sizes to if rates rise.

Illustrative sensitivity, not the modelStraight lines from the headline case: each 5% of cost overrun takes 1.5 points off the investor IRR, each 3 months of delay takes 1.0 point, each 1% of rent below the model takes 0.72 points, each 25 bp of exit cap takes 1.45 points, and the multiple falls 0.11x for every point of IRR lost.

Investor IRR and multiple, cost overrun by construction delay

  • On budget

    On schedule
    15.16%, 2.73x
    3 months late
    14.16%, 2.62x
    6 months late
    13.16%, 2.51x
    9 months late
    12.16%, 2.40x

  • +5% cost

    On schedule
    13.66%, 2.57x
    3 months late
    12.66%, 2.46x
    6 months late
    11.66%, 2.35x
    9 months late
    10.66%, 2.24x

  • +10% cost

    On schedule
    12.16%, 2.40x
    3 months late
    11.16%, 2.29x
    6 months late
    10.16%, 2.18x
    9 months late
    9.16%, 2.07x

  • +15% cost

    On schedule
    10.66%, 2.24x
    3 months late
    9.66%, 2.13x
    6 months late
    8.66%, 2.02x
    9 months late
    7.66%, 1.91x

Capital-loss case: Exit cap +150 bp and rents -10%

Investor IRR
-0.74%
Multiple
0.98x
Investors get back
$17.9Mof $18.3M
Capital lost
$332K

Same rule as the grid, both moves at once. Illustrative sensitivity, not the model.

Refinance at the 7.15% rate stress, month 61

Loan as sized
$47.0M
Loan at the stress
$39.0M
Smaller by
$8.1M
Construction payoff
$33.0M

The same coverage test priced at the stressed rate, from the loan sizing in the capital section. At the stress the loan still repays the construction loan; the smaller loan reduces what the refinance distributes to equity.

Coverage against the covenant

Net operating income over debt service, every month with debt service.

About this card
Months below the covenant during lease-up are shown with their funding.
CoverageMonths below 1.20x: 8

The lease-up deficit, and who funds it

Months 25 to 36: debt service less net operating income. A negative month is a surplus that pays part of it back. The first surplus month is month 33.

  1. Month 25

    Occupancy
    1.0%
    NOI
    ($82,194)
    Debt service
    $197,833
    Deficit
    $280,028
    Cumulative
    $280,028

  2. Month 26

    Occupancy
    4.0%
    NOI
    ($70,216)
    Debt service
    $197,833
    Deficit
    $268,049
    Cumulative
    $548,077

  3. Month 27

    Occupancy
    9.1%
    NOI
    ($50,252)
    Debt service
    $197,833
    Deficit
    $248,085
    Cumulative
    $796,162

  4. Month 28

    Occupancy
    16.2%
    NOI
    ($22,302)
    Debt service
    $197,833
    Deficit
    $220,135
    Cumulative
    $1,016,298

  5. Month 29

    Occupancy
    25.3%
    NOI
    $13,633
    Debt service
    $197,833
    Deficit
    $184,200
    Cumulative
    $1,200,498

  6. Month 30

    Occupancy
    36.4%
    NOI
    $57,554
    Debt service
    $197,833
    Deficit
    $140,279
    Cumulative
    $1,340,777

  7. Month 31

    Occupancy
    49.5%
    NOI
    $109,461
    Debt service
    $197,833
    Deficit
    $88,372
    Cumulative
    $1,429,149

  8. Month 32

    Occupancy
    60.3%
    NOI
    $152,188
    Debt service
    $197,833
    Deficit
    $45,645
    Cumulative
    $1,474,794

  9. Month 33

    Occupancy
    72.6%
    NOI
    $200,613
    Debt service
    $197,833
    Deficit
    ($2,779)
    Cumulative
    $1,472,015

  10. Month 34

    Occupancy
    86.3%
    NOI
    $254,734
    Debt service
    $197,833
    Deficit
    ($56,901)
    Cumulative
    $1,415,114

  11. Month 35

    Occupancy
    93.5%
    NOI
    $283,151
    Debt service
    $197,833
    Deficit
    ($85,318)
    Cumulative
    $1,329,796

  12. Month 36

    Occupancy
    94.6%
    NOI
    $287,630
    Debt service
    $197,833
    Deficit
    ($89,796)
    Cumulative
    $1,240,000

Net over the twelve months, as stated: $1,240,000. The running shortfall peaks at $1,474,794 in month 32, so the commitment has to be available for $1,373,926 at that point before the surplus months bring it back to the net figure.

Funding order

  1. 1. Capitalized interest$0

    The budget's $2,193,302 of construction interest is drawn by month 24; nothing remains for month 25 on.

  2. 2. Lease-up reserve$100,868

    The budget's reserve, drawn in full.

  3. 3. Sponsor commitment$1,139,132

    The remainder, as a GP member loan on the terms below (sample).

  4. Deficit funded$1,240,000

The sponsor commitment

Form of the commitment
GP member loan (sample). Funded by the sponsor as a loan to the partnership, not as equity.
Priority
Subordinate to the investor preferred return (sample). Repaid only after investors receive their preferred return.
Return on it
10% simple interest (sample). Accrues from each advance until repaid.

If the lease-up is slower

  1. Base case

    Stabilized
    month 36
    Added deficit
    $0
    Total deficit
    $1,240,000
    Sponsor commitment
    $1,139,132
    Coverage, month 42 test
    1.60x passes

  2. 3 months slower

    Stabilized
    month 39
    Added deficit
    $749,142
    Total deficit
    $1,989,142
    Sponsor commitment
    $1,888,274
    Coverage, month 42 test
    1.60x passes

  3. 6 months slower

    Stabilized
    month 42
    Added deficit
    $1,497,697
    Total deficit
    $2,737,697
    Sponsor commitment
    $2,636,829
    Coverage, month 42 test
    1.55x passes

Each unit type's fill period stretched by three and six months on the same ramp. Lost income is priced at the lease-up year's own rates per occupied unit; tax and debt service do not move. The first extension test is 1.15x on the trailing 3 months.

Absorption by unit type

  1. Studio

    Units
    30
    Months to fill
    7
    Leases a month, average
    4.1
    Leases, fastest month
    7.5

  2. 1BR

    Units
    80
    Months to fill
    10
    Leases a month, average
    7.6
    Leases, fastest month
    14.4

  3. 2BR

    Units
    75
    Months to fill
    11
    Leases a month, average
    6.5
    Leases, fastest month
    12.3

  4. 3BR

    Units
    15
    Months to fill
    12
    Leases a month, average
    1.2
    Leases, fastest month
    2.3

Construction debt service in this chart is drawn at a 7.00% all in rate, between today's 5.90% indication and the 7.25% capped maximum. The months below the covenant are real and the funding for them is split three ways: the capitalized interest reserve carries the loan through construction, the lease-up reserve covers part of the operating deficit after delivery, and the balance of that deficit is a sponsor funding commitment, stated with its figures in diligence answer three.

Diligence

The ten standard questions

The project team 6 roles, sample names in the live format

Each status restates a fact shown elsewhere: the GMP in diligence two, the signed term sheet in the debt terms, the appeal period in the schedule.

Sponsor and developer

Sample Sponsor LLC

6 completed developments, record above, co-invested pari passu

General contractor

Sample Builders Co

Bid package in progress; guaranteed maximum price to be executed before closing, contingency inside the GMP

Architect

Sample Architecture Studio

Schematic design under way, construction administration through delivery

Construction lender

Sample Regional Bank

Term sheet signed, in-balance tested at each draw

Property manager

Sample Residential Management

Engaged for pre-leasing at first delivery and operations after

Counsel

Sample Law LLP

Entitlements through the expired appeal period, loan and equity closings

Data room index Every document, the tier that opens it, and its status.

Data room index

What opens at each tier. Statuses are sample statuses; the live index updates as the sponsor uploads, and every view and download is logged.

Teaser
Every invited investor
Full materials
After accreditation attestation and the sponsor's confidentiality terms
Closed investors
Investors who have closed

  • Entitlement approvals

    Tier
    Teaser
    Status
    Available
    Schema kind
    No schema kind yet

  • Offering memorandum

    Tier
    Full materials
    Status
    Available
    Schema kind
    om

  • Development budget

    Tier
    Full materials
    Status
    Available
    Schema kind
    budget

  • GMP construction contract

    Tier
    Full materials
    Status
    Pending
    Schema kind
    No schema kind yet

    To be executed before closing; the bid package is in progress

  • Construction loan term sheet

    Tier
    Full materials
    Status
    Available
    Schema kind
    loan_term_sheet

  • Appraisal

    Tier
    Full materials
    Status
    Pending
    Schema kind
    No schema kind yet

  • Geotechnical report

    Tier
    Full materials
    Status
    Not started
    Schema kind
    No schema kind yet

    Not started, per the bid package's owner documents

  • Phase I environmental site assessment

    Tier
    Full materials
    Status
    Available
    Schema kind
    No schema kind yet

    Received, per the bid package's owner documents

  • ALTA survey

    Tier
    Full materials
    Status
    Pending
    Schema kind
    No schema kind yet

    Pending, per the bid package's owner documents

  • Title commitment

    Tier
    Full materials
    Status
    Available
    Schema kind
    No schema kind yet

    Received, per the bid package's owner documents

  • Rent roll

    Tier
    Full materials
    Status
    Not applicable
    Schema kind
    rent_roll

    Ground-up: no existing tenants

  • Trailing twelve months (T12)

    Tier
    Full materials
    Status
    Not applicable
    Schema kind
    t12

    Ground-up: no operating history

  • Subscription documents

    Tier
    Closed investors
    Status
    Pending
    Schema kind
    sub_doc

Investor questions

11 answered, visible to all invited investors

Ask a question

Questions are visible to every invited investor once answered. The sponsor answers; Apolis does not.

0 of 1000 characters

The sponsor sees which assumption the question concerns.

On this sample page your question stays in this browser. It is not sent to the sponsor or to anyone else.

Preview: investors can use this once the deal is live.

Indicate interest

An indication of interest is not an offer, an acceptance, or a commitment to invest. No money moves and no obligation is created. It can be changed or withdrawn at any time.

Check size ($25,000 minimum)

On this sample page your indication stays in this browser. It is not sent to the sponsor or to anyone else.

Full materials open after accreditation attestation and the sponsor's confidentiality terms.