Request for Proposal: Balboa Reservoir Property Purchase and Development Opportunity from SFPUC

Transcription

1 Request for Proposal: Balboa Reservoir Property Purchase and Development Opportunity from SFPUC Developer: Raintree Partners (Raintree Evergreen LLC) January 18, 2017

2 PART I: EXPERIENCE 9.5 A. Proposer Profile (confidential) Raintree Partners (Raintree Evergreen LLC, Raintree ) is a private real estate investment and development company that focuses on the development, acquisition and ownership of multifamily residential and mixed use properties in high growth western U.S. markets. The company has a $475 million equity commitment from an institutional investor ( Evergreen, Evergreen Real Estate Partners LLC) on behalf of a state pension fund. The venture between Raintree and Evergreen is Raintree Evergreen LLC (each entity is described below). Raintree was founded in December 2007 by Jeffrey B. Allen. Mr. Allen has over 30 years of real estate experience including development, investment and management responsibilities. Raintree is the successor to the business interests of J.B. Allen Realty, Inc., a private real estate development company founded by Mr. Allen in From its offices in San Francisco and Orange County, Raintree has acquired and developed 32 properties over the past 10 years totaling more than 5,100 units in core markets in both Northern and Southern California. Years in Business: Raintree Partners has been in business for 10 years and collectively the Raintree Partners development team has 50 years of real estate development experience. Organizational Structure: The organizational structure is laid out in the Ownership Map below. The key entities include Raintree Partners LLC (Developer), Raintree Evergreen LLC, and Evergreen Real Estate Partners LLC. TO BE FORMED SPE LLC "BORROWER" Borrowing Entity Key Principal & Guarantor Raintree Evergreen LLC Principal A Delaware Limited Liability Company Sole Member (100%) Evergreen Multi Family LLC Raintree Partners LLC A Delaware Limited Liability Company A Delaware Limited Liability Company Member Member Evergreen Real Estate Partners LLC A Delaware Limited Liability Company Raintree Evergreen LLC: Raintree is a privately held company founded in 2007 focused on the development, acquisition, and ownership of multifamily properties. The company targets investment opportunities in the western U.S. with a primary focus on northern and southern California. Raintree currently owns 29 properties consisting of more than 5,100 apartments in California. Evergreen Real Estate Partners LLC ( Evergreen ): Evergreen is managed by Evergreen Investment Advisors ( EIA ), a wholly owned subsidiary of M3 Capital Partners LLC ( M3 ). Evergreen is capitalized with equity commitments in excess of $2.5 billion from a large U.S. pension fund and invests globally. January

3 Evergreen s value add strategy seeks entity level and strategic joint ventures with product focused, private real estate operating companies that have attractive long term prospects for out performance. Evergreen targets long term investments (10+ year holds) that offer attractive cash flow yields and riskadjusted returns, and generally pursues commitments to individual platforms of $100 million to $300+ million. Development Team Members: Raintree Partners has begun early planning and massing studies with BDE architects of San Francisco on the Balboa Reservoir RFP site. Reuben & Junius, a San Francisco based land use attorney, will be working with Raintree Partners on this site as well. Raintree partners is currently interviewing additional architectural firms and landscape architects for the project. Key staff members of both Raintree Partners are detailed below. Raintree Partners Key Staff and Resumes Jeffrey B. Allen Chief Executive Officer Mr. Allen has been in the real estate development, investment and management business for more than 35 years on a local, regional and national level. Mr. Allen formed Raintree Partners in December 2007 as the successor to J.B. Allen Realty, Inc., a real estate development company he established in Under Mr. Allen s direction, the firm has created a platform partnership with an institutional investor through which Raintree Partners has strategically invested $300 million of equity capital in California apartments. Prior to founding Raintree Partners and J.B. Allen Realty, Mr. Allen was Managing Director of multifamily investments at SSR Realty Advisors (the predecessor to BlackRock Realty) and CEO of its Metric Property Management subsidiary. There, his team managed $2.3 billion of institutional capital invested in a portfolio of more than 20,000 apartment units across the U.S. Previously, Mr. Allen was a Partner with Maguire Partners in Los Angeles and, prior to that, a senior executive with affiliates of Security Capital Group where he led business entities that developed, acquired and managed more than 22,000 apartment units and 12,000 extended stay hotel rooms. From 1981 through 1995, Mr. Allen was cofounder and Managing Partner of the western region of Paragon Group, a leading national developer and manager of multifamily, office and industrial properties. He was also co founder and Vice Chairman of Carlan Homes, a single family homebuilding affiliate of Paragon Group. Earlier in his career, he held development management positions with Cabot, Cabot & Forbes and The Koll Company. Mr. Allen holds an MBA from Harvard Business School and a BS in Civil Engineering from Cornell University. He is a licensed real estate broker in California and a member of the Urban Land Institute, ULI Multifamily Council, Cornell University Real Estate Council, Fisher Center for Real Estate and Urban Economics and the National Multi Housing Council, where he previously served on the Executive Committee and the Board of Directors. Jason K. Check Managing Director of Development Mr. Check will serve as lead negotiator for the Balboa Reservoir development project and has been involved in all of Raintree s prior projects in San Francisco. Mr. Check s decade in commercial real estate has focused on sourcing value add opportunities, asset and project management, and environmental engineering. January

4 At Raintree, Mr. Check oversees the firm s development and construction activity. He has sourced and acquired more than $100 million in multifamily projects in direct off market transactions in addition to helping to establish Raintree s construction and development processes. Prior to joining Raintree, Mr. Check handled asset and project management responsibilities on more than $100 million in acquisition, development and multifamily rehabilitation projects at The Picerne Group. Previously, he was a construction manager for Langan Engineering on residential high rise and mixed use projects in Manhattan and Queens. Mr. Check earned Bachelors and Masters degrees in Civil and Environmental Engineering at the Georgia Institute of Technology. He is a LEED Accredited Professional and a member of the Urban Land Institute, ULI Small Scale Development Council and ULI Orange County Housing Initiative Council. He also is a participant in National Multi Housing Council functions. Richard W. Price Vice President of Development With more than a decade of experience in the finance and real estate industries, Richard Price serves as vice president of development for Raintree Partners. As vice president, Mr. Price oversees all phases of the development process for multifamily rental communities throughout Northern and Southern California, managing projects through acquisition, due diligence, entitlement, project design, permitting, construction and operations. He also supports Raintree s financing and refinancing efforts for both construction and permanent loans on stabilized development projects. Prior to joining Raintree Partners, Mr. Price s experience included: underwriting institutional size multifamily value add acquisitions totaling $1.2 million for Bascom Group, a private multifamily investment company located in Irvine, California; brokering multifamily transactions for buildings averaging 10 to 50 units for ACI Apartments in San Diego, California; and working as a certified public accountant for PricewaterhouseCoopers. Mr. Price received a Bachelor of Accounting from Brigham Young University and a Master of Real Estate Development from the University of Southern California. He earned his Certified Public Accounting license (CPA), is a licensed real estate broker in the State of California, and a member of the Urban Land Institute. Allen Chuang Development Associate With a background in accounting and real estate analysis, Mr. Chuang supports the firm s acquisitions and development platforms through financial modeling and analysis, as well as conducting market research, executing due diligence activities and assisting in the asset management function for the firm s portfolio. Prior to joining Raintree, Mr. Chuang was an Associate with Ernst & Young LLP s Transaction Real Estate Services Group where he was responsible for conducting due diligence associated with portfolio and single asset transactions, market studies and cash flow analyses for REITs and private equity firms. Mr. Chuang began his career as an auditor at Ernst & Young. Mr. Chuang holds a Bachelor of Science degree from the Haas School of Business at the University of California, Berkeley. He holds a Certified Public Accounting license in the State of California. January

5 9.5 B: Project Profiles 1. Encasa (under construction) Project: Encasa Residential Village Role: Developer Acres: 13.4 Estimated Completion: 1Q2017 Location: E. Weddell Drive Sunnyvale, CA (San Clara County) Building: 4 Story Wrap and 3 Story Walk Up Number of Units: 465 Units (448,260 NRSF) Common Area Amenities: Coworking Space (10 Private Offices and 2 Cowork Lounges), Swimming Pool and Spa (2), Indoor/Outdoor Clubrooms (2), Yoga Rooms, Spin Room, Dog Parks (2), Barbeque Areas, Bicycle Storage and Repair Rooms, Barbeque Areas, Outdoor Fireplace (3), Trail System, 1 Acre Park, Transit Oriented Development (VTA), Community Gardens, Bocce Court, Recreation Lounge and Tech Room Home Amenities: Quartz/Ceaserstone Countertops, Stainless Steel Appliances, Luxury Vinyl Wood Plank Flooring, Private Patios/Balconies, In Unit Washers and Dryers, Full tile, Kitchen Backsplash, Built in Microwave, LED Walk in Closets, Park View, Linen Closets, Chrome Fixtures Project Schedule: Event Date Project Month 1. Land Purchase May-14 Month 1 2. Construction Begins May-15 Month Length of Construction 28 Months 4. Development Complete Aug-17 Month Tenant Move-in Begins Nov-16 Month Stabilization Apr-18 Month Refinance Period Nov-18 Month 54 Total Project Cost & Financing: Total Cost: $201M Construction Financing ($145M): Bank of America, Cynthia Goodfellow, 5 Park Plaza, Suite 500 Irvine, CA January

6 Role of the Public Sector: Raintree Partners worked closely with the City of Sunnyvale and SFPUC to obtain all approvals and permits to construct the project. There were several steps and approvals necessary in order to obtain entitlements on the 13 acre site. o City of Sunnyvale: The City of Sunnyvale approval process for entitlement of the site included a general plan amendment, a rezoning, site plan approval, and included an EIR which included a neighboring project from another developer. Raintree worked closely with its planner, the Planning, Building, and Public Works departments, Planning Commission, City Council, and the City Manager s office during the approvals process. The City of Sunnyvale approval process was completed in approximately two years. o SFPUC: Raintree worked closely with SFPUC to negotiate and execute a license agreement for rights to improve and maintain 1.1 acres of SFPUC land (see Parcel C in image above). This land, which bisects the project, was a considered a critical piece of open space by Raintree and the City of Sunnyvale, and an important part of the project. The approval process with SFPUC included several rounds of approval with various members of the SFPUC team including the Real Estate Director (Rosanna Russell), Rightof Way Managers (Brian Morelli and Jane Herman), Project Engineers (Stacie Feng and Tracy Leung), Environmental Project Manager (Sally Morgan), and Senior Land Resources Planner (Joanne Wilson). Community Engagement: Raintree Partners worked closely with the neighboring community in order to address concerns about relative density and massing adjacent to 2 story townhomes. Raintree hosted many community meetings and outreach events in an effort to inform its neighbors and the local community. Raintree s strategy included i) hiring a third party liaison to provide an open point of contact with the neighbors and address community questions and concerns, ii) holding multiple public meetings to obtain feedback on the project and design direction, iii) door to door campaigns to engage directly with neighbors to obtain feedback and approval of the project. The result of the public engagement was overall very positive and resulted in strong support for the project from the local residents via support at public hearings and letters to City Council. Combined EIR Challenges: The City required Raintree s project be studied as part of a combined EIR with another developer. This resulted in delays to Raintree s initial project schedule and exposure to issues (height, density, environmental, neighborhood opposition) Raintree otherwise may not have faced. Raintree complied with the City s request for the combined EIR and worked with the other developer and their neighborhood associations to obtain support for both the Raintree and the other developer s projects. As a result, the combined EIR was adopted and both projects approved by City Council with support from the community. Site Environmental Challenges: As a result of the findings in the EIR, the project faced environmental challenges, which needed to be addressed prior to project approval. Some of these challenges included air quality issues due to the site s proximity to highway 101. Raintree worked with its design team to create solutions including orienting the residential portions of the site away from the freeways, utilizing the garages as noise and air contaminant buffers from the freeway, orienting operable windows away from the freeway, and installing MERV 13 air filters. January

7 2. The Stuart at Sierra Madre Villa New Construction Role: Developer Acres: 12 Completed: 2007 Location: 3360 East Foothill Blvd Pasadena, CA Building: 3 story and 4 story wood framed (Type V) residential building over a 2 story concrete podium Number of Units: Phase I. 188 Units (168,619 NRSF) Phase II. 212 Units (177,608 NRSF) including an historic structure. Completed June Community Amenities: 1950 s and 1960 s style furnishings and lounge, Modern Fitness Center, Business Center, Courtyard and Outdoor Kitchen BBQ and Dining Area, Two story historic, mid century Clubhouse, Covered Garage Parking, Controlled Access Community, Easy Access to the 210 Freeway, Direct walking path to Gold Line light rail Home Amenities: Central Air Conditioning, Chrome Lighting, Dishwasher, Gourmet Kitchen, Large Soaking Tub, Stainless Steel Appliance Package, In Unit Washer and Dryer, Floor to Ceiling Windows, Personal Patios and Balconies Total Project Cost & Financing: Total Cost $97M Joint venture with BRE properties (now Essex Property Trust), project was funded with 100% equity. Role of the Public Sector: Mr. Allen worked closely with the City of Pasadena, the Pasadena Planning Commission, City Council and the MTA (Metro Transit authority) to obtain all approvals and permits to construct the project. There were several steps and approvals necessary in order to obtain entitlements on the 12 acre site. o City of Pasadena: The City of Pasadena approval process for entitlement of the site included a general plan amendment, site plan approval, site development permit and included both the preservation and adaptive re use of a historical building. The entire approval process took close to four years. o MTA: Mr. Allen worked in conjunction with the Pasadena MTA in order to help construct a new parking structure for the Gold Line Metro Station which borders the property. January

8 Community Engagement: Mr. Allen worked alongside the Pasadena Heritage Commission, Cal Tech University, the Transportation Committee, the Architectural Review Commission, the MTA, numerous Pasadena homeowner associations, and hosted a design fair for the local community to encourage transparency and communication. During this process Mr. Allen was able to gain the support of then Pasadena Mayor Bill Bogaard and Cal Tech President David Baltimore who both actively campaigned for the project. Market Challenges: The 12 acre site, which was originally entitled and planned in 1999 as a large Bio Tech campus relied heavily on the ability to obtain both Bio Tech tenants and a commitment from Cal Tech to build world class research labs. Shortly after being awarded the site the period that followed, the dot com bubble, would go on record as some of the worst in history for Technology and the NASDAQ. As a result, any technology related firms were fighting to stay afloat and willing tenants dried up. Fortunately, Mr. Allen had built a strong enough relationship with the City of Pasadena to get a site development permit and push ahead with apartments instead of a Bio Tech campus. After a strenuous redesign the City of Pasadena approved the 400 unit apartment plan. Site Challenges: In the middle of the site was a historic building that had to be incorporated into the greater 12 acre plan. It was eventually decided upon to donate the building to the City of Pasadena and assist in converting it to a live theater which is still in use today known as A Noise Within Theatre. January

9 3. The Martin (under construction) Project: The Martin Role: Developer Acres:.45 Location: 2051 Third Street San Francisco, CA (San Francisco County) Building: 5 Story (Type IIIA) Wood Frame Over 2 Story Podium (Type IA) Number of Units: 92 Units (68,964 NRSF) Including Live/Work/Retail at Ground Floor Common Are Amenities Coworking Space (6 Private Offices and a Cowork Lounge), Retail and Live/Work Space, Conference Room, Roof Deck Overlooking the SF Bay, Clubhouse, Fitness Center, Covered Parking, Barbeque Are, Bicycle Storage, Leasing Office, Recreation Center, Transit Oriented Project located at 3 rd Street/Mariposa Station (Muni), Landscaped Courtyard, Adjacent to Future Crane Cove Park Home Amenities Quartz/Caeserstone Countertops, Stainless Steel Appliances, Luxury Vinyl Wood Plank Flooring, Private Patios/Balconies, In Unit Washers and Dryers, LED Lighting, Walk in Closets, Water and City Views, Linen Closets, Chrome Fixtures, Aluminum Windows Project Schedule: Event Date Project Month 1. Land Purchase May-13 Month 1 2. Construction Begins Jun-15 Month Length of Construction 24 Months 4. Development Complete May-17 Month Tenant Move-in Begins May-17 Month Stabilization Sep-18 Month Refinance Period Feb-18 Month 57 Total Project Cost & Financing: Total Cost: $56M Construction Financing ($35.1M): Capital One, Greg Reed, 660 Newport Center Drive, Suite 1240, Newport Beach, CA Role of public sector: January