SIGNATURE/DRS FUND I PRIVATE EQUITY FUND IREAL ESTATE
Dec 19, 2015
Presented by:
Ward Katz & Jerry Miller Co- Managing Members
Signature/DRS Fund I7171 W. 95th St. Suite 220Overland Park, KS 66212
Phone: 913-563-4500Email: [email protected]
www.signaturedrsfunds.comWard Katz
Phone: 913-955-2904Email: [email protected]
Jerry MillerPhone: 913-563-4518
Email: [email protected]
Real Estate Multifamily Rental Investment Opportunity Fund
SIGNATURE/DRS FUND IPRIVATE EQUITY FUND IREAL ESTATE
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
Signature/DRS Fund I is a joint venture between two experienced and successful real estate firms, DRS Management & Signature Property Management, to develop and manage Signature/DRS FUND I. The Fund will focus on acquiring, repositioning, managing and selling multifamily properties in Kansas City, Dallas, Denver, St. Louis & Phoenix.
Management has over 60 years of Real Estate Investment and Management Experience.
DRS Management & Signature Property Management have developed, acquired and syndicated over $175 Million in more than 25 separate real estate transactions
DRS Management & Signature Property Management have overseen the management of 65 apartment communities and over 9,000 units, and currently manage 15 property communities and over 3,000 units
The existing combined portfolio of DRS Management & Signature Property Management consists of apartment communities, condominiums and home associations in three states
SIGNATURE / DRS FUND ICOMPANY OVERVIEW
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
1) Signature/DRS Fund I was formed to: Offer accredited investors the opportunity to participate with the sponsor of
the Fund by combining resources for the acquisition, management and sale of a portfolio of a diverse apartment properties.
2) The offering’s goal is to provide: An investment structure with low font-end costs where the sponsor is
compensated only after a preferred return is distributed to investors.
3) To add value to the investment: Sponsors will utilize their professional management staffs to reposition the
properties through refinancing, better marketing and management or cost–effective physical upgrades.
SIGNATURE / DRS FUND IFUND OBJECTIVE
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
The Fund will invest 100% of the equity required in a project to own a 100% interest in the project. The Fund will deploy a percentage of its capital in joint ventures where the Fund can control a
disproportionately larger ownership interest than the percentage share of equity invested in a particular project.
Utilizing a combination of these two investment platforms, the Fund believes that it will be able to greatly leverage its investments and acquire between $35MM and $45MM in assets, thus providing diversification, reducing risk and enhancing overall returns to the Fund.
SIGNATURE / DRS FUND IFUND BUSINESS MODEL
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
SIGNATURE / DRS FUND IINVESTMENT PARAMETERS
To Provide Real Estate Investors with a quality, proven real estate investment & management company with a compelling vision.
Company Philosophy
Asset Type
Company Objective
Fund Target Return
Asset Size in Dollars
Asset Size in Units
Assets Location
To Acquire 3 properties over the next 2 years.
100 – 250 Units per property
$7.5MM - $15MM
30% IRR (before fund expenses and splits)
Kansas City, Denver, Dallas, St. Louis, Phoenix
Leverage Per Asset
Apartment BuildingsClass B & C Properties
70%-75%
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
5 Year AnalysisInvestment Amount $ 100,000
Percentage Equity Interest 1.43%
Cash Flow Category 1/1/2015 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 TOTALS
Capital Contribution $ (100,000)
Preferred Return $ - $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 40,000
Return of Capital $ - $ - $ - $ - $ - $ 100,000 $ 100,000
LP/Sponsor Split $ - $ 7,236 $ 8,227 $ 9,259 $ 10,336 $ 6,398 $ 41,4568
Capital Event Distribution $ - $ - $ - $ - $ 82,241 $ 82,241
Total $ (100,000) 15,236 16,227 $ 17,259 $ 18,336 $ 196,639 $ 263,697
Cumulative Cash Returned $ (100,000) $ 15,236 $ 31,463 $ 48,723 $ 67,059 $ 263,697 $ 263,697
IRR 26.0%Annual Return(Capital &
Income) 15.2% 16.2% 17.3% 18.3% 14.4%
Multiple 254%
* Past performance is not indicative of future results.** This is a sample return and actual results may vary. See PPM for risks of Investment.
SIGNATURE / DRS FUND ISAMPLE INVESTMENT SCENERIO
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
APARTMENT CYCLES AND FUND STRATEGYTHE FUND TARGET
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
Much has been written and spoken about the upswing in renters who no longer view home ownership as an investment, who want the flexibility of renting and/or cannot obtain financing for a home purchase. It is commonly believed that rental demand for mid-market apartment product will not keep pace with supply.
With rental demand for apartments continuing to firm up, institutional investors are purchasing and developers are building Class A apartments at a record pace. Management believes that the apartment cycle is rapidly approaching hyper supply and that the time to purchase well located Class B/C apartments at a reasonable price is on the horizon. Our criteria are those Class B/C properties that are ripe for repositioning through management, financing and/ or rehabilitation
The financing of many transactions, particularly 5-7-10 year deals will be facing maturity resulting in buying opportunities. Sellers and commercial brokers are looking to buyers who have ample funds and borrowing capacity to move quickly and close. The motivation for raising funds for purchase of undesignated projects but meeting specific investment criteria is to demonstrate to the sellers and brokers that the fund can move rapidly to contract and close and thus assure an early look at all opportunities.
APARTMENT CYCLES AND FUND STRATEGYCONTINUED DEMAND and OVERSUPPLY
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
U.S. Constructionof New Apartments
• 2001-2007 average 301,000 units/year• 2009 163,000 units• 2012 104,500 units• 2013 195,000 units• 2014 300,000 units• 2015 (projected) 413,000 units
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
Kansas City Constructionof New Apartments
• Existing inventory 132,500 units• Under construction and pipeline 8,000 units• Average annual absorption 1,500 units• Projected years supply 5.3 years
SIGNATURE /DRS FUND IPRIVATE EQUITY FUND I REAL ESTATE
5 Year AnalysisInvestment Amount $ 100,000
Percentage Equity Interest 1.43%
Cash Flow Category 1/1/2015 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 TOTALS
Capital Contribution $ (100,000)
Preferred Return $ - $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 40,000
Return of Capital $ - $ - $ - $ - $ - $ 100,000 $ 100,000
LP/Sponsor Split $ - $ 7,236 $ 8,227 $ 9,259 $ 10,336 $ 6,398 $ 41,4568
Capital Event Distribution $ - $ - $ - $ - $ 82,241 $ 82,241
Total $ (100,000) 15,236 16,227 $ 17,259 $ 18,336 $ 196,639 $ 263,697
Cumulative Cash Returned $ (100,000) $ 15,236 $ 31,463 $ 48,723 $ 67,059 $ 263,697 $ 263,697
IRR 26.0%Annual Return(Capital &
Income) 15.2% 16.2% 17.3% 18.3% 14.4%
Multiple 254%
* Past performance is not indicative of future results.** This is a sample return and actual results may vary. See PPM for risks of Investment.
SIGNATURE / DRS FUND ISAMPLE INVESTMENT SCENERIO