Legacy Capital Partners is a series of private equity funds, focused on providing real estate developers with a reliable and efficient source of flexible and patient equity capital. The Fund's objective is to align its investment strategy and investment timeframe with Developer Partners whose goals are to build value through longer holding periods.
The following is an outline of the Legacy Capital Partners' general investment parameters.
| Property Type: | The Fund is focused on mixed-use retail and apartment projects. Other property types (including for-sale residential projects) will be considered on a select basis.
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| Property Description: | The Fund is seeking to invest in value creation opportunities through the development of new assets or the re-positioning/re-development of existing assets.
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| Developer Partners: | Real estate professionals with strong local market knowledge, development/re-development expertise, and proven track records.
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| Project Locations: | The Fund will consider any geographic location within the continental United States.
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| Individual Investment: | $2,500,000 to $8,000,000. Larger and smaller investments will be considered on a select basis.
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| Fund Investment: | The Fund will provide up to 90% of the required equity and the Developer Partner will be required to contribute a minimum of 10%.
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| Investment Period: | 10+/- years. The Fund's objective is to refinance the Project upon stabilization in order to return all or a portion of invested capital with an eventual exit through the sale of the asset at the conclusion of the first refinance period.
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| Ownership/Management: | The Fund and Developer Partner will form a new single purpose entity. The Developer Partner will be the managing member/general partner and will be responsible for the day-to-day operations. The Fund will be the member/limited partner and will have approval rights with respect to major decisions. The Developer Partner shall be responsible for providing any guaranties required to secure construction and/or permanent financing for the Project. Individual(s) and/or an entity acceptable to the Fund shall provide the Fund with a guaranty of completion, guaranty of cost overruns, and a guaranty for standard non-recourse "carve-out" events.
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| Distributions: | Preferred Return: The Fund and the Developer Partner shall receive a pro rata preferred return of 10% from operating cash flow or, if cash flow is insufficient, the preferred return shall accrue on a non-compounding basis. Excess Cash Flow: After payment of the Preferred Return, excess cash flow shall be distributed so the Developer Partner receives a promoted interest in the distribution. Sale and/or Refinance Proceeds: After payment of the preferred return and the return of all original invested capital, sale and/or refinance proceeds shall be distributed pro-rata so the Developer Partner receives a promoted interest in the distribution.
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| Target Return Parameters: | Through the Distribution of cash flow and refinance proceeds as defined above, the Fund is seeking to achieve the following: 1) Excess proceeds at the time the asset is re-financed shall be adequate to pay all accrued and unpaid Preferred Return and to return at least 60% of the original invested equity. 2) After the asset is re-financed the Fund's share of the project's cash flow shall initially provide a cash on cash return of at least 19% on the Fund's residual equity.
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| Origination Fee: | Legacy Capital Partners will earn an Origination Fee of two percent (2%) of the Fund Investment. The Origination Fee will be capitalized into the project budget and paid at closing.
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| Transaction Expenses: | The expenses relating to the appraisal, feasibility study, travel, legal, reviews of third party reports, plans and specifications and project documentation shall be capitalized into the project budget and paid at closing. |
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