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The VAULT 970 Yuma Street Denver, CO July 2009 CONFIDENTIAL CONFIDENTIAL THE UNITS DESCRIBED IN THIS EXECUTIVE SUMMARY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE AGENCY HAS REVIEWED OR APPROVED THIS EXECUTIVE SUMMARY OR THE MERITS OF THE COMPANY’S CONTEMPLATED OFFERING. ANY ASSERTION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS EXECUTIVE SUMMARY DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY UNITS IN ANY JURISDICTION. EXECUTIVE INVESTMENT SUMMARY NINE THOUSAND (9,000) UNITS OF MEMBERSHIP INTEREST ($500 PER UNIT) The VAULT, LLC, a recently formed Colorado limited liability company (the “LLC” or the “Company”), is under contract to purchase from 970 Yuma, LLC (“Seller”) an Industrial Warehouse property (the “Property”) located at 970 Yuma Street, Denver CO 80204. The closing of the Company’s purchase of the Property is scheduled for July 24, 2009. As its sole business, the Company intends to manage the property. The Company is considering offering for sale, to selected potentially qualified investors, units of membership interest in the Company (“Units”) as follows: Selling Net Proceeds to the Offering Price Commissions Company Percent Interest Per Unit: $500 -0- $500 0.01111% Total Offering: $4,500,000.00 -0- $4,500,000.00 100% (9,000 Units) If the offering commences, Units may be sold to up to Thirty (30) sophisticated but non- accredited investors and an unlimited number of accredited investors. See “TERMS OF THE OFFERING: Suitability Requirements” below. If the Company proceeds with the offering, the offering of the Units will commence upon the circulation of a Confidential Private Placement Memorandum (the “PPM”), and will continue until the earlier to occur of (i) acceptance by the Company of subscriptions for Units totaling $4,500,000, or (ii) August 31, 2009. In particular, the offering may continue after the Company purchases the Property. If and to the extent that all 9,000 offered Units are not fully subscribed by third-party investors by August 31, 2009, Mr. R. Brian Watson will retain the balance of the Units. See “USE OF PROCEEDS” below. THIS EXECUTIVE SUMMARY WILL BE SUPERCEDED IN ITS ENTIRETY BY THE PPM IF THE COMPANY ELECTS TO PROCEED WITH THE OFFERING. NO PERSON SHOULD INVEST IN THE COMPANY UNTIL THEY HAVE RECEIVED AND CAREFULLY REVIEWED THE PPM. IN THE EVENT OF ANY CONFLICT BETWEEN THE PPM AND THIS EXECUTIVE SUMMARY, THE PPM SHALL CONTROL IN POINT OF CONFLICT. THE OPPORTUNITY In October 2008, Northstar Commercial Partners (“NCP”) formed an investment LLC called 970 Yuma, LLC to purchase the property located at 970 Yuma Street, Denver, CO 80204. As of early June 2009, renovations were completed, transforming it into a private luxury warehouse. NCP is now recasting the investment as an opportunity for thirty (30) investors to purchase a 1/30th share of the Property. The Property consists of an industrial warehouse building measuring ±21,570 SF on ±18,946 SF (±0.43 acres) of land that has been completely remodeled and upgraded into a personal luxury warehouse. Prior to closing, NCP will create The LLC, which will be the ownership entity for the investment. The primary strategy is to purchase the property at the price of $3,850,000 and immediately lease the facility to the The LLC – The Private Executive Network with a ten (10) year lease. The LLC will consist of thirty (30) Founding Members who will each invest $150,000 into the entity for a total of $4,500,000 to purchase the property. The total amount reflects the transaction costs and associated holding costs. NCP and The LLC have identified a network of high-net worth individuals and influencers who desire to participate in a collaborative leadership network that would be headquartered at the Property. The Property, a former cash storage facility, is the perfect fit for The LLC with its close-to-downtown location and extensive security features (including interior doors with bullet proof glass and bank-grade vault doors). Renovations included interior warehouse painting, new lighting and electrical, high-gloss epoxy floor painting, showroom lighting, renovation of the second floor office space, roof repairs, and the installation of multiple features to personalize the building including a bar/lounge, commercial-grade kitchen, workout facility, archery range, home theater, game room, shooting range, 3,000 bottle wine cellar, and state-of-the-art security and sound systems. The plan is to offer a unique facility for discerning individuals unlike anything in the marketplace. THE PROPERTY The Property is located just south of Denver’s central downtown business district. The Property sits on a frontage road to Interstate 25, the region’s main north-south corridor. The Interstate is easily accessible from nearby exits and on-ramps for both north bound and south bound travel. Nearby businesses include an auto salvage yard, warehouse and wholesale operations. The area is considered a mature market with little room for new construction and stable to increasing lease and sale rates. The facility was formerly used for coin and currency processing and delivery by its previous owner, Loomis Fargo and Company. The building was vacated in 2007 when Loomis consolidated three of their smaller Denver facilities into a larger, single location. The building footprint covers nearly 100% of the land and includes ±3,200 SF of second floor office space. The warehouse building is constructed of masonry block with a brick veneer on the front side. The square shaped building includes a large, open garage-style space with 12’ clear ceilings accessible through two drive-in doors. The south and east sides of the main warehouse contain several storage rooms and walk-in vaults. The south end of the building also includes ±3,200 SF of second story office space accessible through a separate, exterior doorway. The office layout is unique and appealing since it could be used in conjunction with the warehouse or completely separate if desired. Two of the building’s attributes - low ceiling height and lack of a yard area/parking - would typically be difficult to overcome obstacles; however these actually become benefits in the LLC’s plan. CAPITAL IMPROVEMENT COSTS In the investment model, $100,000 is allocated for placing dedicated features that would be required by the tenant to finalize the VAULT facility. Recently completed improvements include high glass epoxy floor coating, showroom lighting, lounge with bar, wine cellar, indoor shooting range, archery range, commercial kitchen, home theater, and state of the art security and sound systems. The second floor office space was renovated and updated. The entire renovation project was designed by Mr. Jim Hyatt, a world-renowned designer and architect based in Denver, whose design accomplishments include the design for the Sheik and Sheika’s palaces in Abu Dhabi, United Arab Emirates and several Four Seasons hotels. ENVIRONMENTAL INVESTIGATION The current owner, 970 Yuma, LLC engaged Evergreen Engineering and Environmental Services to conduct a Phase One study of the property upon its acquisition in October, 2008. During due diligence it was discovered that an underground gasoline storage tank had been emptied and closed in place outside of the building. Soil tests performed during due diligence indicated that trace amounts of diesel fuel exists in the soil. These levels are well below state standards that would require any mitigation. In addition, since the tank in question previously contained gasoline, not diesel, it is believed the diesel has originated from some unknown off-site source. As a condition of the transaction, the previous owner, Loomis Fargo, removed the tank and we have received “No Further Action” status from the State of Colorado. Upon completion of their study, Evergreen concluded that there were no other environmental concerns which would require additional investigation or remediation at the property and issued a reliance letter to cover Northstar Commercial Partners and 970 Yuma, LLC under the Phase I report. Copies of the environmental report are available for investor review on the Northstar website or by request. PICTURES OF BUILDING ORIGINAL VAULT DOOR DINING AREA WINE VAULT BAR & LOUNGE GAME ROOM & CIGAR HUMIDOR THEATRE SHOOTING RANGE WAREHOUSE & SHOWROOM FULL SERVICE CATERER KITCHEN THE PROPERTY Property Location: 970 Yuma Street, Denver CO 80204 Building Size: ±21,570 SF Clear Height: 12’ 8” Facility: Column Spacing: 44’x35’ Zoning: I-2 County: Denver Flood Zone: Zone AE - flood insurance is required Construction: Concrete Block & Brick Roof: Modified & Built Up; currently in fair condition. Power: 800 amp, 120/208 volt; considered adequate for proposed uses (new switch gear in service). Fire Sprinkler System: Wet system covers warehouse and most first floor offices but none of the second floor offices. Doors: 2 Drive-In Yard Area: None Off Street Parking: None (Since the building will be used for vehicle storage, the City of Denver has verbally indicated they will waive off-street parking requirements.) Land Size/Acres: ±18,946 SF (±0.43 acres) Year of Construction: 1967 Ten (10) year lease with The VAULT, LLC to be signed Property Status: before closing. Contract Price: $3,850,000 Capital Improvements and Closing Costs: $650,000 Investment Strategy: Lease out the property to The VAULT LLC. PROPERTY LOCATION Regional Map View of Property Location Local View of Property Location AERIAL VIEW OF SITE Subject property is within 2 miles of the central downtown business district and both of Denver’s professional sports facilities. FLOOR PLAN TENANT THE VAULT Secure. Private. Exclusive. The VAULT will be Denver’s first private, secure and armored event center located in the heart of the city. This stunning, one of a kind facility designed by award winning architect, Jim Hyatt, offers over 18,000+ square-feet of luxurious space for social events. The facility combines world class amenities with comprehensive, high-level security features including armored and bullet proofed areas and dedicated access for vehicles, providing complete peace of mind for guests. The VAULT amenities include a bar and lounge area, a deluxe gaming room complete with billiard and poker tables, a private dining area, cigar lounge, movie theatre, and a climate controlled 3,000 bottle wine vault accessible for private tastings. Other amenities include indoor private shooting range (the only one of its kind in central Denver), indoor archery range, gun vault, exotic car showroom, work out facilities with a full bathroom, DJ Booth and dance floor, lavish living room / lounge, deluxe commercial kitchen, Wi-Fi Internet access and professional presentation resources for all size and types of events. This secure event venue will be the first of its kind to offer local leaders and influencer's access to private lunches, events and receptions with professional athletes, high profile leaders and celebrities. Though the venue can be reserved for special functions, The VAULT Membership will be private and closed to the general public. (Full business plan available upon request.) Lease Terms Ten (10) Year Lease Term Rental Rate: $26.08 per sq ft (NNN) with annual increases Security Deposit: None Personal Guaranty: None LINK TO VIEW VAULT PHOTOS: http://www.northstarcp.com/970yuma/vaultphotos/index.html INVESTMENT SUMMARY Purchase Price:+ $3,850,000 Projected Costs: Legal & Accounting Fees: $12,500 NCP Advisory Fee (4% of Purchase Price): $154,000 Estimated Capital Improvement/Art/Furniture Expenses: $483,500 Total Investment Cost: $4,500,000 Total Equity Required Total Capital Partner Equity Requirement $4,500,000 Number of Investors 30* Minimum Investment Amount: $150,000 Required Date for Receipt of Capital Investment July 24, 2009 Projected Date of Closing: July 31, 2009 INVESTMENT RETURN PROJECTIONS 1. First Tier of Distribution: 12.5% annualized return on the $150,000 investment distributed annually. This distribution is the return of capital. Once all capital is returned, 12.5% annually is then straight return on invested dollars. 2. The VAULT Entity pays market lease rates once building is paid off. 3. The 30 Founding Members will also receive a ten (10%) profits interest in The Denver VAULT operations entity which is then distributed annually in thirty (30) equal shares. It is estimated that this entity should net in excess of $2,028,000 per year by the second year of operations. (see pro forma on next page). 4. Lifetime Membership as a Founding Member in “The VAULT” Members Club at no additional cost. Equivalent to $1,800 annually. 5. Should a 75% majority of the Founding Members vote to sell the building, members shall receive their proportionate share of interest from the net proceeds of the sale. *R. Brian Watson will be the first Founding Member as he will invest $150,000 into the LLC for a 1/30th interest. Consequently, only 29 shares shall be offered to outside investors. Proprietary Information of Northstar Commercial Partners VAULT FINANCIALS First Year Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 LOW MID HIGH MID Income 225 Members 300 Members 450 Members Member's Club - Membership Dues* $ 337,500 $ 450,000 $ 675,000 $ 450,000 $ 652,500 $ 946,125 $ 1,371,881 $ 1,989,228 Event Space Rentals** $ 656,250 $ 875,000 $ 1,312,500 $ 875,000 $ 962,500 $ 1,058,750 $ 1,164,625 $ 1,281,088 Food, Liquor & Beverage*** $ 703,125 $ 937,500 $ 1,406,250 $ 937,500 $ 1,031,250 $ 1,134,375 $ 1,247,813 $ 1,372,594 Misc Event Revenue**** $ 174,750 $ 233,000 $ 349,500 $ 233,000 $ 256,300 $ 281,930 $ 310,123 $ 341,135 Total Income $ 1,871,625 $ 2,495,500 $ 3,743,250 $ 2,495,500 $ 2,902,550 $ 3,421,180 $ 4,094,442 $ 4,984,044 Expenses Personnel - GM $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 78,750 $ 82,688 $ 86,822 $ 91,163 Personnel - Benefits $ 11,250 $ 11,250 $ 11,250 $ 11,250 $ 11,813 $ 12,403 $ 13,023 $ 13,674 Professional Services - Accounting $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,750 $ 16,538 $ 17,364 $ 18,233 Professional Services - Website $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 5,000 $ 5,250 $ 5,513 $ 5,788 Marketing $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 Professional Services - Legal $ 25,000 $ 25,000 $ 25,000 $ 35,000 $ 10,000 $ 10,500 $ 11,025 $ 11,576 Administration - Facility Lease (NNN) $ 562,500 $ 562,500 $ 562,500 $ 562,500 $ 562,500 $ 579,375 $ 596,756 $ 614,659 Administration - Technology (Computers/Phones/etc) $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 5,000 $ 5,250 $ 5,513 $ 5,788 Administration - Insurance $ 35,000 $ 35,000 $ 35,000 $ 35,000 $ 36,050 $ 37,853 $ 39,745 $ 41,732 Administration - Taxes $ 22,000 $ 22,000 $ 22,000 $ 22,000 $ 22,660 $ 23,340 $ 24,040 $ 24,761 Administration - Utilities $ 36,000 $ 36,000 $ 36,000 $ 36,000 $ 37,080 $ 38,192 $ 39,338 $ 40,518 Administration - Maintenance $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,360 $ 12,978 $ 13,627 $ 14,308 Administration - New Furniture and Furnishings $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Administration - Property Management $ 16,875 $ 16,875 $ 16,875 $ 16,875 $ 16,875 $ 17,381 $ 17,903 $ 18,440 Total Expenses $ 895,625 $ 895,625 $ 895,625 $ 905,625 $ 873,838 $ 901,747 $ 930,669 $ 960,641 Net Income/(Loss) $ 976,000 $ 1,599,875 $ 2,847,625 $ 1,589,875 $ 2,028,713 $ 2,519,433 $ 3,163,773 $ 4,023,403 10% Allocation to Founding Investors / Members $ 97,600 $ 159,988 $ 284,763 $ 158,988 $ 202,871 $ 251,943 $ 316,377 $ 402,340 Assumptions Founding Investor / Member Summary Monthly Memberships Number of Members Annual Revenue / Member Total Total Available Investment $4,500,000 Member's Club 300 $1,500 $450,000 1/30th Share $150,000 Total $450,000 Facility Lease Revenue (NNN) $ 562,500 Event Space Rentals Number of Events Revenue per Event Total 1/30th Share $ 18,750 Events - Regular Nights/Days 125 $5,000 $625,000 Return % 12.50% Events - Holidays & High Demand Nights/Days 25 $10,000 $250,000 Total $875,000 10% of Operating Profits (Average) $ 266,504 1/30th Share $ 8,883 Return % 5.92% Food, Liquor & Beverage (250 people per event) Number of Events Revenue Total Liquor & Beverage ($15) 150 $3,750 $562,500 Membership Dues (Annual Equivalent) $ 1,800 Food ($10) 150 $2,500 $375,000 Return % 1.20% Total $937,500 Misc. Event Income (10% + commission received from vendors) Number of Events Revenue Total Total Annualized Return 19.62% Security 150 $400 $60,000 Catering 150 $500 $75,000 Valet 150 $250 $37,500 Photography 150 $150 $22,500 Exotic Car Rentals 38 $1,000 $38,000 Total $233,000 Founding Investor / Member Summary Total Available Investment $4,500,000 1/30th Share $150,000 Facility Lease Revenue (NNN) $ 562,500 1/30th Share $ 18,750 Return % 12.50% 10% of Operating Profits (Average) $ 266,504 1/30th Share $ 8,883 Return % 5.92% Membership Dues (Annual Equivalent) $ 1,800 Return % 1.20% Total Annualized Return 19.62% Proprietary Information of Northstar Commercial Partners WEBSITE NCP Website Additional information on this investment opportunity can be viewed on the secure NCP website, or by mail upon request. Please contact R. Brian Watson for login instructions. The following materials are available online: • Photo Slideshow • Building Floor Plan • Financial Pro forma Details • Factors to Consider NOTICES NOTICE REGARDING FORWARD-LOOKING STATEMENTS This Executive Summary and related documents located in the secure areas of Northstar Commercial Partner’s website at (www.northstarcp.com) (the “Website”), contain forward- looking statements and forecasts concerning the Company’s or management’s plans, intentions, strategies, expectations, predictions and financial forecasts concerning the Company’s future activities and results of operations and other future events or conditions. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “could,” “estimate,” “might,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Sections of this Executive Summary and the Website containing such statements include, but are not limited to the Business Plan, “Factors to Consider”, and the Financial Statements. The Company’s actual results or activities or actual events or conditions could differ materially from those forecasted by the Company, due to a variety of factors, some of which are beyond the control of the Company. See “Factors to Consider” for a discussion of certain other factors that could cause the Company’s actual results or activities or actual events or conditions to differ from those anticipated by the Company. Forecasts concerning the Company’s future results of operations and expansion plans are based on a number of assumptions and estimates made by management of the Company. These estimates and assumptions are believed by management to be reasonable, but are uncertain and unpredictable. To the extent that actual events differ materially from management’s assumptions and estimates, actual results will differ from those forecasted. The investment returns outlined above in this Executive Investment Summary are in no way guaranteed by Northstar Commercial Partners, 970 Yuma, LLC, or any affiliate or representative thereof. Proprietary Information of Northstar Commercial Partners NOTICES NOTICE TO INVESTORS AN INVESTMENT IN THE OFFERED SECURITIES INVOLVES A HIGH DEGREE OF RISK. THE OFFERED SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAW. NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS EXECUTIVE SUMMARY OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. SECURITIES PURCHASED IN THIS OFFERING WILL BE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AS SET FORTH IN THE OPERATING AGREEMENT OF THE COMPANY. NOTICE TO COLORADO INVESTORS THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE COLORADO SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
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