Investment. Planning. Development. Management. The Premiere West Coast Real Estate Investment & Development Company February, 2017
Table of Contents Executive Summary Company Overview Page 4 Target Markets Page 5 Multifamily Fundamentals Page 10 Mack Urban Introduction Company History Page 13 Key Team Members Page 14 Mack Urban Communities Page 25
Executive Summary 3
Company Overview 4 Mack Urban, LLC (the Company ) is a premiere West Coast real estate investment and development company formed by Mack Real Estate Group, Urban Partners, LLC and Harbor Urban, LLC. Uniting top-tier development talent with outstanding capital relationships, Mack Urban is the premiere long-term investment, development and ownership company with a focus on urban infill mixed-use multifamily and commercial development within target gateway markets. Target Gateway markets include California and the Pacific Northwest, where Mack Urban focuses on investment and development primarily in Southern California, Seattle and Portland. We are a proven development sponsor who is best in class with decades of investment and development experience. Our investment leadership is defined by the company s experienced principal involvement with integrated management of all services, which creates superior investment results for our investors, partners and clients.
Target Market - Seattle 5 Annual Job Growth Cumulative Net Absorption Performance Indicators Source: CoStar Market Analytics, Seattle Apartment Market Fundamentals, 2016Q3
Target Market - Portland 6 Annual Job Growth Cumulative Net Absorption Performance Indicators Source: CoStar Market Analytics, Portland Apartment Market Fundamentals, 2016Q3
Target Market - Los Angeles/Orange County 7 Annual Job Growth Cumulative Net Absorption Performance Indicators Source: CoStar Market Analytics, Los Angeles Apartment Market Fundamentals, 2016Q3
Target Market San Diego 8 Annual Job Growth Cumulative Net Absorption Performance Indicators Source: CoStar Market Analytics, San Diego Apartment Market Fundamentals, 2016Q3
Sensible growth driven by favorable demographic demand and restrained supply 9 Seattle Portland San Francisco Bay Area Los Angeles/ Orange County San Diego Common Attributes Desirable geographic location/climate High barriers to entry and/or strong economic growth Growth among key industries Strong job growth Urban cores showing Growth above National average Year to Year rental growth Existing Target Markets Potential & Opportunistic Markets
Multifamily Fundamentals 10 Growing Class of Renters by Necessity Increased difficulty in purchasing a home due to: Recent surge in home prices in desirable market Tighter credit and capital requirements Migration of technology-based jobs to more urban environments where housing is even more expensive Average first-time homeowner is now 32 years old, 5 years older than 6 years ago Growing Numbers of Renters by Choice Urban markets create incremental demand on top of job growth: Driven by Millennials and Baby Boomers, the two largest demographic cohorts Millennials and Baby Boomers have few, if any, dependents Millennials and Baby Boomers becoming less reliant on cars Young employees value flexibility in living arrangements Fear of home value declines U.S. Homeownership Declining U.S. homeownership rate has declined from 64.9% in 2013 to 62.9% in 2016 Los Angeles homeownership rate at 49% Seattle homeownership rate at 46% Limited competition from buyto-rent homes that are mainly suburban markets
Mack Urban Introduction 11
Introduction 12 Mack Urban is a premiere full service real estate investment, development, planning, advisory and management firm. The company pursues select market niches where complexity or innovation create exceptional potential for its partners and clients. With highly-specialized expertise in urban infill entitlement processes, complex private and/or public financial structures and sustainable construction methods, Mack Urban identifies opportunities which are not widely followed or understood, resulting in competitive quality, marketing advantages and superior financial performance. Mack Urban s business model includes two fundamental investment types: development and value-add. Current equity projects include residential and mixed-use developments in urban core and high population growth areas of the western United States and major land development projects requiring detailed planning and entitlement strategies. Mack Urban s asset portfolio includes: land development, mixed-use development, apartment and condominium homes, transit-oriented development, student housing, financial restructurings, build-to-suit development and the adaptive reuse of historic structures. The privately held company was founded in 2000 as Urban Partners, LLC. In 2011 Urban Partners and AREA Property Partners acquired Harbor Properties in Seattle, WA and created Harbor Urban, LLC. In 2013 Urban Partners, Harbor Urban and Mack Real Estate Group partnered to create Mack Urban, LLC. Ownership of the company is held by William Mack, Richard Mack and Paul Keller. Paul Keller serves as Founding Principal & CEO, Kevin Lindquist is COO, and John Gunn is Managing Director for the Los Angeles office. Today, Mack Urban consists of more than 20 real estate professionals. The Principals of Mack Urban are personally involved in the day-to-day management of all investments. Company headquarters are in Downtown Los Angeles and Pacific Northwest investments are managed through the Seattle office.
Company History Pacifica Capital Investments, LLC Mack Real Estate Group Urban Partners, LLC 13 1980 Keller Construction builds commercial office building for Leonard Family 1981-1989 Pacifica evolves into full service real estate company 1990 Pacifica opens real estate investment office in Denver, CO 1993 Apollo Real Estate Advisors founded in collaboration with William Mack to seek U.S. property opportunities 1995 Apollo expands as global real estate advisor 1999 Pacifica, Apollo and Keller Construction build Arboretum Office Building in Santa Monica, CA Sells in 2001 2000 Urban Partners LLC, founded in Los Angeles, CA 2005 Urban opens Seattle, WA office 2009 Rebranding of Apollo Real Estate Advisors to AREA 2011 Property Pacifica Partners investment in Urban 2012 Harbor Urban, LLC formed as full service real estate company Seattle, WA 2013 Mack Real Estate Group, Urban Partners & Harbor Urban announce new Partnership Mack Urban, LLC 1981 Pacifica Holdings Company founded to own real estate in Los Angeles County 1984 Pacifica and Paul Keller purchase Southern California retail center 1990-1998 Pacifica acquires and develops 8 million square feet of Denver properties and develops 1995 Pacifica and Apollo form partnership to invest in and develop commercial properties in greater Denver 1998 Pacifica sells Denver real estate holdings for $750 million 2000 Pacifica and Apollo invest in industrial building and achieve subsequent disposition in Madrid Spain 2002 Pacifica and Apollo start commercial land development project in Madrid Spain 2007 Urban and Real Estate Capital Partners, LP form coinvestment GP Capital Fund 2010 AREA investment vehicles exceed $13 billion 2011 Urban and AREA reach agreement to purchase Harbor Properties, Inc. Seattle, WA 2013 AREA sold to ARES Mack Real Estate Group formed 2014 Mack Urban announce new property management company, Mack Urban Communities
Key Team Members William Mack (New York) 14 Mr. Mack is the Chairman of MREG. Mr. Mack founded AREA Property Partners (f/k/a Apollo Real Estate Advisors) in 1993 and is widely regarded as one of the leading figures in the U.S. real estate industry. He serves as Chairman of the Board of Directors of Mack-Cali Realty Corporation, one of the largest publicly-traded real estate investment trusts in the U.S., and as President and Chief Executive Officer of the Mack Organization, a national owner, investor, and developer of warehouse and retail facilities. Mr. Mack also serves as Chairman of the Board of the Solomon R. Guggenheim Foundation, Emeritus Trustee of the University of Pennsylvania s Board of Trustees, Chairman of the Board of Overseers of the Wharton School of the University of Pennsylvania, and Vice Chairman of the North Shore Long Island Jewish Health System. Mr. Mack is a Director of Florida Community Bank and Hudson s Bay Company (TSE: HBC), which owns and operates Lord & Taylor and Saks Fifth Avenue. Mr. Mack was previously a member of the boards of directors of Retail Opportunity Investments Corp. (Nasdaq: ROIC), Wyndham International Inc., The Bear Stearns Companies, Vail Resorts Inc., and the Empire State Development Corporation. Mr. Mack attended the Wharton School of the University of Pennsylvania and received a B.S. in Business Administration from the New York University School of Business.
Key Team Members Richard Mack (New York) 15 Mr. Mack is the co-founder and Chief Executive Officer of MREG. Mr. Mack was one of the founding principals of AREA Property Partners (founded in 1993 as Apollo Real Estate Advisors) and prior to founding MREG was the Chief Executive Officer of AREA s North American business and a member of that firm s U.S. and European Investment Committees. Over 20 years, Mr. Mack was involved in the investment of more than $14 billion of equity capital in more than 550 debt and equity real estate transactions on behalf of AREA s primarily institutional investors and was specifically responsible for creating new business lines to capitalize on evolving market trends, including a subordinate debt business and ArCap, a joint venture functioning as AREA s special servicing and B-piece investment business. Previously, Mr. Mack had been a member of the Real Estate Investment Banking Department at Shearson Lehman Hutton. Mr. Mack serves on the Wharton School of Business Undergraduate Advisory Board, the Randall s Island Sports Foundation Board of Trustees, the Board of Trustees of the Child Mind Institute and the 92nd Street Y Board of Directors. He is president emeritus of the HES Community Center in Canarsie, Brooklyn and the co-chairman of the Robin Hood Foundation s Housing Advisory Board. Mr. Mack earned a B.S. in Economics from the Wharton School of the University of Pennsylvania and a J.D. from the Columbia University School of Law.
Key Team Members Stephen Mack (New York) 16 Mr. Mack is a Partner of Mack Real Estate Group. He has over twenty years of investment experience. Mr. Mack is a Founder and has served as a Managing Partner of Solon Mack Capital LLC ( Solon Mack ), an investment firm that conducts private and public investments in multiple asset classes for the Mack Family, since 2002. Prior to forming Solon Mack, Mr. Mack founded Long Lake Capital, LP, a multi-strategy fund of hedge funds, and has been co-managing the portfolio since its inception. Previously, Mr. Mack was the managing member of MVG Holdings, LLC where he was responsible for executing public and private equity investments. Mr. Mack is a Trustee of NYU Langone Medical Center and a Board Member of Musicians on Call. Mr. Mack received a B.A. from the University of Pennsylvania and an M.B.A. from Columbia Business School.
Key Team Members Paul Keller Chairman (Los Angeles, California & Seattle, Washington) 17 Paul Keller has over thirty years of experience in the real estate and construction industries, formerly leading Keller Equity Group, Inc., Keller CMS, Inc. and Keller Construction Company, LTD. Mr. Keller and Keller-related entities have been responsible for over 2,000 projects in the continental United States and Hawaii and have provided program development and project and construction management oversight services to a variety of clients on projects valued in excess of $7 billion dollars. Mr. Keller is highly regarded in the industry for his comprehensive grasp of asset and project management details and his ability to match leasing, construction and financing requirements. Among his present leadership roles, Mr. Keller is a member of ULI (Urban Land Institute) Los Angeles Advisory Board; ULI Los Angeles Land Use Leadership Committee; board member of the L.A. Streetcar Initiative (LASI); board member of FoLAR (Friends of the L.A. River); board member of Friends of Waterfront Seattle; member of The Los Angeles Coalition for the Economy and Jobs and a member of the Central City Association of Los Angeles. Previous leadership roles include: Chairman of Eimago (formerly Union Rescue Mission Foundation) and former Chairman of the Board of Directors, Seven Arrows Elementary School in Pacific Palisades, California.
Key Team Members Kevin Lindquist Chief Operating Officer (Los Angeles, California & Seattle, Washington) 18 Kevin Lindquist serves as Chief Operating Officer for Mack Urban, LLC and is responsible for overseeing Mack Urban s development and construction activities and delivering Mack Urban s development pipeline.. Kevin has over seventeen years of Class A commercial and residential real estate development experience on the West Coast, and has been responsible for all facets of real estate development from acquisition through development, lease-up, and disposition, as well as raising both debt and equity capital. Prior to joining Mack Urban, Kevin held senior positions with Western National Properties, City View, KB Urban, and Trammell Crow. Kevin holds a BA from UCLA and an MBA from Cornell University. Del Morais, CPA Chief Financial Officer (Los Angeles, California & Seattle, Washington) Del Morais is responsible for the oversight of the company s finance, accounting and tax departments. He manages the partnership and project teams responsible for the day-to-day accounting, forecasting and reporting. Prior to joining Mack Urban in 2011, Mr. Morais was the Director of Finance at Countdown to Buy, a start-up internet real estate broker in Bethel, CT. There he managed the finance department responsible for capital raises, accounting and entity reporting. Prior to CTB he was a Vice President of Goldman Sachs Equities Division in London. Mr. Morais has also worked for Deloitte in New York City as an Audit Senior in charge of SEC financial statement audits for many Fortune 500 companies. Mr. Morais is a licensed CPA with non-active series 7, 3 and 63 licenses and has been working in finance and real estate since 1999.
Key Team Members Martha Barkman Vice President of Development (Seattle, Washington) 19 Martha Barkman has over 25 years of development, construction and retail experience. She is responsible for predevelopment, construction management, retail targeting for many of Mack Urban s projects in the Seattle area. She is directly involved with development activities including conceptual and architectural development, entitlement, construction oversight and proforma management. Through Mack Urban and its predecessor, Harbor Properties, Martha has completed more than 18 residential and mixed use development projects totaling over 4 million square feet and leasing of over 150,000 square feet of retail associated with these projects. Martha is actively involved in the local real estate community and serves as an advisor on several City of Seattle panels, improving development regulation and public benefit requirements. She has also served on several Urban Land Institute taskforce committees and several community groups in the neighborhoods where the projects are located. Sincere community involvement has led to the long term success of the projects and their retail components. Martha has two BA degrees from Seattle Pacific University in Finance and Management, and also holds an MS degree in Construction Management from the University of Washington.
Key Team Members 22 Patrick Merritt Vice President of Construction Services (Seattle, Washington & Portland, Oregon) Patrick is VP of Construction Services at Mack Urban, in charge of managing all aspects of construction and entitlements. Throughout his 15 year career, Patrick has managed a wide variety of multi-family projects including hi-rise apartments, garden-style condominiums & apartments and affordable housing in the Los Angeles and Seattle areas. Patrick s goal at Mack Urban is to facilitate the completion of quality projects that are on-budget, on-schedule and without insurance claims or accidents. Patrick holds a Certificate in Construction Management from UCLA.
Key Team Members David Elliott Senior Vice President of Construction Services (Los Angeles, California) 23 David Elliot is Senior Vice President of Construction Services at Mack Urban with over 40 years of successful high quality construction/design-build experience. Throughout his career David has been team leader on a variety of complex projects, including design/build, residential, hospitality/resorts, mixed use, processing facilities and healthcare. Additionally he has overseen the execution of self-perform concrete structures, drywall/plaster, finishes and civil work. David has demonstrated a consistent record of success in setting and attaining personal and corporate goals. He has maintained and encouraged a safe work environment for project Teams and the Public and consistently developed contracting and design solutions for overall project savings. David is a graduate of Lehigh University.
Mack Urban Communities 25 Mack Urban Communities (MUC) has been formed as the in-house division of Mack Urban specializing in asset management, residential leasing and property management. The decision to form Mack Urban Communities highlights Mack Urban s desire to create a fully integrated company which enables them to most closely align the interests of the property management company and the asset owners and investors. Focused exclusively on the management of the Mack Urban s portfolio of multifamily assets, MUC is positioned to deliver unparalleled property management services through a wholly integrated package designed to reflect Mack Urban s goals, market dynamics and conditions, and property needs. The MUC philosophy is based on a high level of focus placed on these areas of expertise: Superior Leasing, Marketing Strategies, Operations and Risk Management, and Investor Reporting. Mack Urban Communities has specific expertise in pre-development market research and executing on the lease-up of newly constructed assets which is a critical period for value creation. MUC provides a deep resource for Mack Urban in the development process, from initial underwriting and project design, to marketing and branding of the asset. The integration of our property management personnel into the development and construction organization ensures a seamless transition from the development and construction of communities through the lease-up of those communities. MUC s premiere brand of customer service begins with hiring the most talented associates considered the highest caliber in the industry. Providing an extraordinary level of service to both Mack Urban and the Residents who call their communities home is the hallmark of Mack Urban Communities.