Helping U.S. Veterans Live A Better Life, With Tocqueville Asset Management

In this webinar, Joe Zock discusses unique OZ projects designed to help U.S. veterans while also delivering returns for investors.

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Webinar Highlights

  • The importance of location when making Opportunity Zone investments;
  • How Veterans Villa will provide a unique collection of services to veterans;
  • Renderings of the Veterans Villa project in Colorado Springs;
  • Target returns and investment terms for Veterans Villa;
  • Live Q&A with OZ Pitch Day attendees.

Industry Spotlight: Tocqueville

Tocqueville Asset Management was founded in 1985 as an independently owned partnership focusing exclusively on the long-term growth and preservation of clients’ capital.

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Webinar Transcript

Jimmy: Joe Zock from Tocqueville Asset Management. He’s gonna be presenting Veterans Villas.

Joe: So, thank you. My name is Joseph Zock. I’m presenting Veterans Villa Operating LLC today, and I also am a portfolio manager at Tocqueville Asset Management. So, Tocqueville is a traditional registered investment advisor. We manage $7 billion or more in assets, and we combine joint forces with CapZone Impact Investments, and they’re considered by many to be experts in the opportunity zone space. And as you mentioned, Jimmy, Kim Cooley is also part of our team, and Kim provided the inspiration, really, for this investment.

So collectively, we are investors. We have capital at risk, we have personal capital at risk and that’s, I think, an important point. But really during the course of my career, I’ve been asked multiple times, “What’s the compelling reason to hire your firm?” Or, “What’s the distinguishing characteristic?” And having watched several presentations today, the distinguishing characteristic is that we are investors and for a daytime job so to speak, we look at traditional publicly-traded equities, private equity pieces, real estate, all types of things, but our expertise is in that financial analysis. It’s not just that we’re good with spreadsheets, we really understand what’s going on and we have years of experience. So that’s the compelling reason to hire us.

Let’s go to the disclaimer because otherwise, my compliance department will be scolding me for not pushing this up. So you’re good to go. That is our traditional disclaimer, and I’ll give you a minute to read that. Okay, time’s up. Since we have a limited amount of time today, there’ll be no discussion of tax law pending legislation, the compendium of acronyms that populate or punctuate the opportunity zone conversation. No QUOFs, no OZs, no QOZBs, no CREs, no DSTs, no IRS, none of that. On the other hand, we expect the audience to be familiar with these terms.

For the next few minutes, we’ll talk about Veterans Villa Operating LLC, where we have investments in Colorado Springs. And, Jimmy, you were nice enough to point out that all of these opportunity zones are about location, location, location. That’s number one. Number two, when we’re trying to put profits together with purpose the location is important, but we’re trying to help U.S. veterans live a better life. And we’re trying to make sure that what we are doing in the opportunity zones helps someone else. So, these are not areas of Detroit or Baltimore that have been abandoned. This is raw land, greenfield that we’re building a 240-unit residential complex that has two side buildings, well, small business centers. They’re not that small, one is 18,000 square feet, one is 10,000 square feet, and those are to support the veterans as they come back from theaters or as they’re currently employed by the army to live a better life.

And what does a better life mean? It means that if you have an injury there’ll be physical therapy. If you have psychological challenges, there’ll be psychologists on site. We’re also unique and we’re positioning a business center there, and that business center will help veterans start their next life like firemen or policemen that had a career for a certain amount of time, they discover that they’ve got plenty of time after age 40, and they want to do something different. So we’ll help them, we’ll guide them through that business creation, or we’ll help them with existing businesses that we have. So this is adjacent to the residential units, and it’s separate. So it’s something that our primary investor wanted this to be within walking distance, and he himself was a veteran, is a veteran and wanted to make sure that there was nothing more than a 1% grade because of handicapped veterans who either lose control of their wheelchair or lose their wheelchair getting out of the car, something that… The point is that we’re acutely sensitive to the needs of veterans.

Now I’m gonna talk about Colorado Springs for several reasons, but let’s go to the slides here. That’s Tocqueville and CapZone, we can skip that. That’s our rigorous investment process. I’ll defer that conversation, please call us. I’m gonna say, please call us several times during this pitch. Keep going. Colorado Springs, for those of you that don’t know it, it’s right in the middle of the country. If you live in Los Angeles or New York, you might not have ever been there, this is what it looks like. And this is what our site looks up at, that’s Pike’s Peak. So anyone of us, anyone on this call, will be happy to live in such a wonderful environment.

So, this is what the artist’s version of Veterans Villa will look like. And as you can see, I’m not sure if you can see it on this slide, but there’s a triangular-shaped object at each end, that’s the angle at which the residential units are constructed. In the middle, there’s a community center which looks very much like a regular community center in any residential unit, and then the side buildings, which I spoke of before are off to the left. So all of this looks up at Pike’s Peak. It’s in a beautiful part of Colorado Springs, but it’s undeveloped, which is why it’s an opportunity zone. So this is what the artist’s rendition would look like and this is what the Veterans Center would look like.

So having said all this lifestyle for veterans is important, and Colorado Springs is a growing economy, you know, most people think of Texas and Florida as being growth areas. Well, they are for people who are over 60, they wanna move to Florida. Corporations wanna move to Texas for obvious reasons, but people under 50 are moving to Colorado for the lifestyle advantages that are multiple. They’re clear. So having said that, many of the veterans that we’re appealing to have been stationed there. So our site is within 20 minutes of five different military installations. The US Air Force Academy is right up the street, and this property is located very close to the airport. And that’s important because, you know, it’s good to be lucky.

After we purchased the land, which has already been done, an enormous development opened up, it was just announced two weeks ago, close to the airport, which will provide all types of benefits for our project. It will basically ensure that we’re gonna have a, you know, healthy number of people who want to rent and be in this project. And the traffic, so to speak, and all the things that we were worried about like stores, grocery stores, movie theaters, all those things that people need close to their home, they will be built and that’s good for a residential project.

So, the Veterans Villa will also accommodate existing personnel in the US military. So with those five bases, there are many people who want the types of structures that we’re building. So three-bedroom apartments if you have a family, they’re all ADA accessible, and it’ll be a short distance to their station. The investment objectives, you know, we’re looking for a mid-teens or low mid-teens return on investment, and we’re looking for the long-term appreciation of these real estate assets. So as most of the developers have said in your lineup today, it’s a combination. All of these investments, these opportunity zone investments are initiated by a person recognizing a capital gain. And once that has occurred, all the various time standards start running. But we are looking at a 10-year period of time for this investment, and we believe that that’s an adequate runway for us.

Having said that, we’ve acquired the land, we’re going through the zoning process right now, we’re doing all the things that you would do in a construction project, and we’re reaching out to the veteran community. We have had extraordinary response from the veteran community for a good reason, and so that’s the purpose. That’s why you would wanna, with all the choices that you’ve seen here today, just on your program, family, offices, individuals can put their capital gains into any one of these projects, and I’m sure they’ll be professionally managed. This project has that purpose. This project is doing good for folks who have served our country and that will continue for as long as we’re involved in the project.

Having said that, I usually have a partner with me who I turn and say, you know, “What did I forget?” And I’m not even sure how long that took, but please call us. That’s really my call to action at the end of our presentation. There are many, many more details involved. It takes literally, Jimmy, about three hours for us to go through OZ, Law, the regulations, zoning, who’s going to live there, what our eventual financial goals would be, and all of the items that you see that everyone’s talked about today, the escalating costs of construction, what financing is gonna cost, all of those things, that’s appropriate in an in-depth conversation with our entire team. So, my call is please give us a call because purpose has an attractive note to it and hopefully our experience and our expertise in all of these areas will gain your confidence going forward. So that’s really all [ crosstalk 00:10:18]
Jimmy: Tremendous presentation, Joe, really appreciate that.

Joe: That’s my elevator pitch in a three-story building, you know.

Jimmy: I love it, Joe. And I do love that you point out that this really is a purpose-driven project that you are working on. What better way to serve our nation’s veterans? A really impactful project that you have there in Colorado Springs. Colorado Springs, as I understand, is kind of the pilot project or first project that you’re doing under this Veterans Villas brand. What other cities are you rolling out to? What else does your pipeline look like or your roadmap look like going off into the future?

Joe: So let me first talk about the things that we’ve done already just to gain your confidence. Can you turn to that? So, we wanted to get our first collaboration with Kim Cooley done properly, done perfectly in a rapidly changing economic environment. So we’re gonna focus on Colorado Springs until it’s complete, that means until it’s vertical. But Kim is very ambitious and she’s looking at projects in Fort Worth, she’s looking at projects in Jacksonville, she’s looking at projects in Iowa. I mean, she has plenty of places to go, but we have to have this proof of concept. We have to demonstrate to the community that we are deserving of their dollars. So we’re gonna stick to this and not get too thinly spread.

We started as this slide shows in Minnesota providing once again, Veteran Affairs outpatient clinic, Next one is a project which is really a workforce development in New London. This is just getting close to fully rented, so that will be, you know, maybe another year before it starts spinning out income. And then the last one is the one that we’re talking about today, or it says Disabled veterans, but it’s really for everyone. And in fact, because of the ADA and, excuse me, anti-discrimination laws, we cannot just rent to veterans. If anybody else shows up, you know, we can’t be discriminatory in any way, shape, or form. So that’s an important part when we’ll get into these discussions.

We have raised about 66% of the equity, but it’s open for investors. And what does that mean? Well, everything I’ve just said the project is designed, the land has been acquired, financing has been secured. So folks that would be coming in at this stage of the game have eliminated all of those risks. and that’s advantageous. The reason it’s open is because costs have gone up. I think everybody in the construction industry has witnessed that, and as I mentioned before financing costs have gone up as well. So we’re out to raise that last bit of capital and put it to bed.

Jimmy: Good. We’ve got time for a couple more questions here from the audience. I think this slide says it actually, but it’s a little tough to read in case anybody’s on a smaller screen. Joe, can you tell us how many residential units will there be in the project? And then part two of this question is, when do you plan to break ground?

Joe: So 240 units, residential units. That’s the easy question. Breaking ground is a function of the… This property is being annexed as we speak, and so there’s some politics involved when that annexation is finished. We can’t start moving dirt until the annexation process is complete. We’re expecting that to be complete within six months, we expect it to be available in early 2024. Actually, it should be a little bit later than that, maybe mid-’24. But our financial plan looks very much like some of the ones that have been described today where we are looking out two, sometimes three years before investors start to see their returns. We’ll probably do a refinancing three years into it, and then obviously liquidation or the exit plan would be 10 years out. We are long-term investors. We do wanna hang on for that entire period, and we’re hoping, as you mentioned before, that the log gets changed. So, you know, 2028, that would be something that would be very beneficial but this particular project is well on its way.

Jimmy: I’ve heard that they might even push for an extension to 29 since it didn’t get passed last year, but that’s another conversation for another day.

Joe: Wait, just in the past hour and a half that happened?

Jimmy: It happened in the past few months, but yeah. Charles has a comment in the chat I just wanna read. He mentions that other Kim Cooley projects are located in Daytona Beach, Florida, San Benito, Texas, Omaha, Nebraska, and South Sioux City, Nebraska, just short ways away from Iowa. And he also mentions he likes the project and he’s already made an investment. So, Charles, thank you for that comment there. Joe, I think we’re out of time now, but before we go, can you tell our listeners and viewers where can they go if they’re interested in reaching out to you, learning more, or requesting subscription docs on this offering?

Joe: So here’s the group of people that you can reach out to. My email’s there, my phone is there, we all pick up our own phone. Kimberly Lake is also listed there. She’s representing Capstone, and Kim Cooley if you want to send her a note. So we’re all funneling all of our leads and all of our requests in when you do go through the due diligence, you’ll be meeting with all of us, meaning representative for all three organizations. So it’s comprehensive, I wasn’t joking about three hours, it takes us about three hours to go through everything that the standard investor would or the prudent investor would need to go through.

Jimmy: Now, it’s a great service to provide and great project. Thank you for presenting it today. Joe Zock, everybody, I just linked his email address and his phone number in the chat. So please do reach out to Joe and his team if you’re interested in learning more about this amazing project. Joe, thank you so much for joining us today. Really appreciate your time.

Joe: Thanks. Thanks for your time.