In this webinar, Taylor Trautloff presents an industrial opportunity in a Denver Opportunity Zone that has already secured construction financing.

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Webinar Highlights

• Background of StarPoint’s history and experience.
• Summary of the “Prime and Prime” investment thesis.
• Overview of Point Central, a Denver OZ project that has already closed construction financing.
• Financial terms and timeline for the Point Central project.
• The desirable location of the Point Central project near Denver’s urban core.
• Live Q&A with OZ Pitch Day attendees.

Featured On This Webinar

• Young, Smart and On-the-Go: Top 10 Metros for Millennials Who Want to Relocate

Industry Spotlight: StarPoint Properties

StarPoint Properties is an uncommonly innovative real estate firm, combining exceptional operating expertise with creativity in asset transformation to drive superior outcomes for its investors. StarPoint is a leader among its peers and seeks to outperform other investment vehicles, year after year.

Learn More About StarPoint Properties

• Visit StarPointProperties.com

Webinar Transcript

Jimmy: I’m now bringing Taylor Trautloff up on stage. She is going to present the Denver Industrial Opportunity Zone Project Point Central offered by StarPoint Properties. So here comes Taylor now. Taylor, there you are. How are you doing?

Taylor: Great. How are you, Jimmy? Nice to see you.

Jimmy: Very good. Great to see you again as always, Taylor. We’re running a few minutes behind schedule in case you haven’t noticed, but I’m gonna give you the full 10-minute allotment that you’re due, and then we’ll save a little bit of time for some Q&A. So if you have questions for Taylor, please do use the Q&A tool in your Zoom toolbar. But, Taylor, without further ado, I’ll turn it over to you.

Taylor: Well, we’ll be able to make up some time. My presentation will be sweet and to the point. So to get started, my name is Taylor Trautloff, and I help lead capital markets for StarPoint Properties. I primarily work with our high-net-worth investors. So to give you an overview of this presentation, I’m going to start off by giving a background of StarPoint Properties and who we are as a company, and then afterwards I’m going to discuss our Opportunity Zone investment offering. Before we begin, I need to read this disclosure.

This presentation is for discussion purposes only and does not constitute and should not be interpreted as either recommendation or advice including legal, tax, or accounting advice. This presentation includes forward-looking statements that represent opinions, estimates, and forecasts, which may or may not be realized. All recipients must perform their own independent investigation and assessment of any offering or information contained. Past performance is not necessarily indicative of future results.

StarPoint Properties was founded 28 years ago, and we are based out of Beverly Hills, California. We have about 50 full-time professionals here in our corporate office, and then we have about another 50 people out on the field in property management. Since inception, we have completed over 150 acquisitions, and we have about $1 billion in assets under management. This is split between our multi-family and our commercial properties. And commercial includes office, industrial, and retail. Our longest investor has been with us for over 20 years, and our reinvestment rate is over 90%.

Since 1995, StarPoint has delivered an average annual net-to-investor return of 24.6%. This is a little bit more than two times the average annual return of the SMB 500 and the MSCI re-index over the same time period. This speaks to our long-term track record and to our dedication in delivering asymmetrical returns for our investors. This is a snapshot of some of our investment team members. Paul Daneshrad is our founder and CEO, I consider him to be a bold visionary leader and he built StarPoint from the ground up into what it is today. Sandy Schmid and Ken Bernhard lead our development and construction departments respectively.

First, I’ll get started by talking about our general Opportunity Zone program, and then afterwards I’ll discuss our current offering. With all of our Opportunity Zone projects, we target a net-to-investor IRR of 14%, and on a taxable equivalent basis, this is about an 18% IRR over a 10-year period. We consider our investments prime and prime because we’ve identified these four key attributes that we believe are essential for a prime real estate investment.

First, we look at prime major metros, and for that, we look for supply chain hubs, we look at macroeconomic data, demographic trends, you know, what regions are driving population growth. And we typically focus on Texas and West, so Colorado and Texas, and then all the states west of this as well. With prime submarkets, we want to be in the best neighborhood on the best street.
So for industrial in particular, we will look for proximity to freeways, railroads, and airports because tenants want to be able to move goods, you know, around within the metro region, and we also will look at proximity to workforce housing.

For all asset classes, especially multifamily, we’ll look at proximity to major employers and we’ll look at where, you know, jobs are and the demographics of the area. And also we’ll look at, you know, the walkability of a site and the schools nearby. We typically focus on industrial and multifamily. We’ve invested across all asset classes, but there are tremendous secular tailwinds with industrial and multifamily in particular, and so we believe that these will outperform over the next decade. And with prime design, we design our assets with the 21st-century tenant in mind, all leading to a prime investment opportunity.

The investment I’ll discuss with you now is fully owned by StarPoint and it is more than shovel-ready. We have actually already began our horizontal construction, so I’m excited to share Point Central with you. Point Central is a $36.7 million industrial project in Denver. We already closed our construction financing, we closed our construction loan in late May 2023. And this is a huge, you know, win and something I want to highlight because there are many projects that may not come to fruition in today’s market. It is challenging for some sponsors to get construction loans closed, so wanted to call that part out. We have already raised about $11.5 million of equity. We have under a million dollars of equity left to raise. This will close by August 15th, so wanted to also call that out.

This is a first come first serve opportunity. We are targeting a net-to-investor IRR of a 14.3%, and we’re targeting a 3X multiple. We are also underwriting a cash-out refinance to occur post-stabilization, which should incur in late 2025. And that will help our investors be able to pay off their tax bill that will come due by late 2026, you know, for that initial capital gain. Point Central will be a 157,000-square-foot industrial project in Denver. It’ll be comprised of 2 adjacent buildings, each about 80,000 square feet with a 190-foot truck yard in the center.

This is a rare, unique opportunity to invest in industrial asset right next to the urban core of a thriving city. Usually in most cities, you don’t have land that’s zoned, Opportunity Zone, end zone industrial this close to the downtown urban core. This site is within a 10-minute drive north of downtown Denver and Union Station. And that is huge for this asset. We also like the site because it is adjacent to all regional interstate highways. In this photograph, we show you how it is bounded by the I-25, the I-270, and the I-76. This will help us attract a best-in-class tenant and this is key so that way our tenant can move their goods and logistics, you know, throughout the metro Denver area.

We have a strong conviction in the Denver sum market. Denver is ranked as the second best place to live by U.S. News. Colorado is the fastest growing state in the U.S. per the U.S. census. And Denver is also the fastest growing city in America for millennial transplants with a 20% growth in this demographic since 2014. And this demographic is precisely the same demographic that is most likely to shop online, and e-commerce is a major demand driver for industrial real estate.

Wanted to share a quick construction update with you all. We began construction in May 2023. We have almost completed all of our horizontal construction, grading is 80% complete and we are getting ready to pour the concrete now. One of our building pads is certified as ready for vertical construction and our second building pad will be certified by end of this month. Completion is estimated for June 2024. This is a summary of our terms. Our minimum investment size is $50,000, we are targeting a whole period of 10 years as this is the requisite holding period for an Opportunity Zone project to reap the full benefits. We charge an annual asset management fee of 1.25% of that asset value, and we charge a development fee of 5% of hard costs.

We offer an investor-friendly waterfall, which is a 10% preferred return after that 10% IRR is hit, then there’s an 80/20 split of the cash flows up to a 14% IRR, and then there’s a 70/30 split thereafter. We hope that you’ll choose to partner with StarPoint Properties. We have over 500 investors and, you know, I know them all on a personal basis, or at least most of them. And I want to also mention that I have prepared a full offering memorandum for Point Central, so I have a full pitch deck that dives in much greater detail than this presentation, and I’m more than happy to share that OM with you. I’ve included my phone number and my email address right here.

Jimmy: Perfect. Well, Taylor Trautloff, thanks so much for joining today. We do have a few questions. We got a few minutes to answer some of those questions. I’m gonna give you full-time. By the way, if you have any questions for Taylor, for any of our presenters, please do use the Q&A tool in your Zoom toolbar. First question is, how confident are you that you can find a tenant for that industrial property?

Taylor: We are very confident in that actually, this is part of why we’re building the site to be, you know, 80,000 square feet across 2 buildings, or it’s about 74,000 and 82,000. But these are smaller size buildings compared to a lot of the industrial supply that’s coming on the market and compared to some of the existing industrial supply. And so we’ll be able to attract…we’re targeting 3PL, which is third-party logistics tenants. This would be something…an example would be if you were to order something on Amazon, and if it were to be shipped and fulfilled not by Amazon, but from a different seller, they would realistically be using one of these 3PL tenants. And that industry within the U.S. is a $10 billion-plus industry. So there’s a lot of tenant demand in that space.

We have a boots-on-the-ground top leasing broker who’s already looking into different LOI options. And then I also want to mention that this submarket is the top submarket for industrial within Denver, this is core Central Denver submarket. It’s a little bit different than the DIA airport market, which has a bit more supply concerns.

Jimmy: Yeah, the 3PL market is growing tremendously as logistics-based warehousing becomes more and more important. You can’t build industrial fast enough is what I understand. Bill asks what’s the minimum investment for this fund?

Taylor: Our minimum investment size is $50,000.

Jimmy: And do you have any other Opportunity Zone projects that you’re currently working on, or anything that’s closed previously perhaps?

Taylor: We did, we actually just closed actually last week. Last week we closed our multifamily Opportunity Zone project, so we closed the loan on that in late June, and then we completed our equity raise last week, and that was a, you know, huge win. We’re all very excited about that. That’s about a $78 million project, and we are building 245 units of multifamily in Phoenix, but that one is now closed.

Jimmy: Okay, great question, just came in from Nirav. Wants to know, is StarPoint on the Schwab platform, or how do investors typically access StarPoint Properties and their fund offerings?

Taylor: I don’t think we are on the Schwab platform, but typically investors will come straight to us. And usually, it actually benefits the investor the most to go straight to the developer because then you’re not being assessed additional fees. You know, other platforms may charge additional fees to an investor. So if you can go straight to a developer or find a developer you trust, that is typically going to be the most lucrative.

Jimmy: Yeah, Nirav, great question there. The vast majority of these funds presented today and the vast majority of funds just overall privately offered qualified opportunity funds don’t appear on any of those types of broker or brokerage platforms. Most investors place capital directly into the fund. I think that’s all the questions we have, and we have run out of time. We’re starting to get a little bit back on schedule.

If you’re interested in StarPoint Properties or in particular this Denver Industrial Opportunity Zone project, please do reach out to Taylor directly. She’ll get you in touch with the right person on her team, and she can get over subscription docs if you are interested in making an investment. I understand this one’s closing pretty soon. You’re just looking for the final few investors here, is that right, Taylor?

Taylor: Correct. We have less than $1 million left to raise. We are targeting a close date of August 15th. So I wanted to make sure everyone that’s watching is aware of that. And thank you so much, Jimmy, for explaining about the direct investment as well.

Jimmy: Perfect. All right. Well, Taylor, thanks again for joining us today and we’ll see you at the next OZ Pitch Day…

Taylor: Thank you, Jimmy.