In this webinar, Joseph Zock and Brandon Sockwell present a mixed use OZ development in Colorado Springs designed for veterans of the armed forces.

Interested In Learning More About This Opportunity?

You can visit the Official OpportunityDb Partner Page for Veterans Villa to:

• View beautiful high-resolution images.
• Learn key details about the fund and related projects.
• Request more information from the fund sponsor.

Webinar Highlights

• Background of the Veterans Villa team.
• Highlights of the Colorado Springs economic growth drivers.
• Overview of a mixed use development designed to support veterans.
• Timeline and milestones for the project.
• Live Q&A with OZ Pitch Day attendees.

Featured On This Webinar

• Peak Innovation Park in Colorado Springs

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.

Learn More About Tocqueville

• Visit Tocqueville.com

Webinar Transcript

Jimmy: Next up, I’m gonna get Brandon Sockwell. He’s gonna be presenting the Veterans Villa project, in Colorado Springs, Colorado. Brandon, how you doing?

Brandon: I’m good, Jimmy. How are you?

Jimmy: Very good. So, Brandon works with Joe Zock. Joe is supposed to be here to present to us, but something came up and he had to hop on an airplane this morning, so he’s not with us this morning, but he did record this intro, which I’m gonna play for you right now, and then we’ll turn it over to Brandon.

Joe: Good morning, Jimmy, and thank you very much for that kind introduction. My name is Joseph Zock. I’m from Tocqueville Asset Management. I serve as a partner and portfolio manager. Tocqueville manages approximately $7 billion in assets, and we are currently focused on our Qualified Opportunity Zone Business, our QOZB, in Colorado Springs. That is called Veterans Villa. And Veterans Villa is focused, as it sounds, on the veteran community and those currently serving in the U.S. armed forces. We have a partner. That partner is CapZone Impact Investing, and they provide the expertise in Opportunity Zones, the regulation, and the compliance. We also partner with Brandon Sockwell, who will be speaking in a minute. Brandon served admirably in the military, and he is our man on the ground to liaise with the veteran community. So, I will, essentially, hand it over to him, and should you have questions, we have a website. We have our call to action. We can be communicated. We can be found very easily. So, thank you very much, Jimmy, once again, and Brandon, I’ll turn it over to you.

Jimmy: Okay. So, that was Joe Zock. Joe, you’re here in spirit with, us and we’ll catch you next time. Brandon, I’ll turn over to you now. You’ve got 10 minutes to run us through Veterans Villa. And thanks for joining us this morning.

Brandon: Yeah, absolutely. Thank you, Joe, for the virtual introduction, and Jimmy for hosting. Are you guys able to see my screen?

Jimmy: Looks good, Brandon. Yes.

Brandon: Perfect. Well, I’ll dive right in. Yeah, by way of introduction, I’m Brandon Sockwell, part of the development team for Veterans Villa. I am local to Colorado Springs. As Joe mentioned, I’m kind of the boots-on-the-ground development representative, and then liaison to the military and defense communities here locally.

Quick overview on our project. This is a mixed-use development. Two-hundred-and-forty units of ADA-compliant market-rate housing. What’s really unique about this project, and Joe alluded to it in his introduction, this project is designed from the ground up, and located to serve the sizable veteran and active-duty communities in Colorado Springs. So, in addition to the 240 apartment units, we’ve got 37,000 square feet of small business center space, designed to serve the veteran community. So, this could include services such as childcare, medical services, co-working space for veterans services organizations. We’ve talked to many folks in the community about being a part of this project in that regard.

Prior to real estate development, I spent nine years at Army Special Operations, the last five of which were at Fort Carson, here in Colorado Springs, with 10th Special Forces Group, so I know Colorado Springs well, and this project, and the opportunity to deliver Class A housing to the veteran and active-duty communities is near and dear to my heart.

So, zooming out for a second, and just talking about Colorado Springs at a macro level, we’ve seen tremendous growth over the past 10 years. We’re actually expected to surpass Denver’s population by 2050, and really strong economy here, anchored by five military installations. You may have heard that Space Force HQ is gonna remain in Colorado Springs, and then an awesome defense tech and aerospace industry as well. And then, lastly, just a phenomenal quality of life. You know, we’ve got Pikes Peak. We’re located in the foothills here. Still relatively affordable. It’s a great market.

Now, to zoom in a bit, and talk about our location and our project, just to orient you to this map, you can see the Veterans Villa logo there on the bottom of the screen, pointing to that blue circle. That is the location of our project. We’re just east of, you know, a huge open space. We’ve got sweeping views of Pikes Peak out to the West. But we refer to this as, you know, our hub-and-spoke model, because we are the hub here, and we are centrally-located to the five military installations in Colorado Springs. There’s over 43,000 active-duty service members in the Springs, and another 20,000 government contractors that work at these installations and need great places to live. On the active-duty side, you know, myself and my teammates, when we move to a new installation, you have 10 days to find housing, which, as you can imagine, is not a lot of time. Often, military installations, including Fort Carson, and Peterson Space Force Base, directly to our north, are oversubscribed for housing. So, you need to find something off-base. The options right outside the gate tend to be subpar, a little bit less desirable, so this project really gives investors the ability to provide really quality housing, adjacent to these installations, to active-duty personnel.

These are folks with really strong tax-free housing stipends, a recession-resistant income stream, so, you know, this is something I’ve experienced first-hand when I’ve moved to a new military town, and really excited about the missional component of this project. In addition to the active-duty side, we’ve got 84,000 vets in Colorado Springs. The city does a great job with veteran retention, in part due to the 100-plus aerospace and defense tech companies that have a presence here. A lot of those companies require cleared talent, so, folks that have those secret TS/SCI clearances, coming from the military side of things. We are located, if you look at the number 1 here, just northwest of our project location, this is Peak Innovation Park. So, by way of perspective, the Denver Tech Center is about 1000 acres. This is a 1600-acre commercial development. It’ll have north of 50,000 employees at full build-out. There’s no residential associated with that development plan. This is a city-run development, and we’re very tied in with the city and the development director. He is ecstatic about the adjacencies, the opportunity for folks working at Peak Innovation Park to live at Veterans Villa, adjacent to that commercial project. And, you know, you’ve got some additional data down here for where these other large defense tech folks are located in Colorado Springs. So, there’s a massive need for quality residential products in the southeast portion of Colorado Springs.

So, just to briefly cover where we are in terms of entitlement and construction. We do have site control. We’ve gone through the zoning and annexation processes, so we have access to city utilities and services. The project is de-risked in that regard for new capital, since we are fully entitled. And then, on the construction side, we’re trending toward completed CDs by the end of the year, hoping to break ground mid-2024, and work towards stabilization in February of 2027. And then, to provide just a quick financial overview, we’re happy and would love to get on the phone with any potential investors and do a deeper dive into the deal metrics. We’ve got a full model we can share, market study, but it’s about a $100-million deal, about $45 million in equity required. We’ve raised about half of that, and are trending toward finishing that equity raise by the end of the year. High-level metrics, around the six-year, or, sorry, a 6% untrended yield on cost, and then, you know, just south of 13% for our projected IRR. That trends closer to 16% when you take into account the taxable equivalent and the benefits of investing cap gains through the OZ program.

I know I’m running out of time here. We’ve got just a 10-minute slot. But here’s some info on the project sponsors. Joe introduced Tocqueville and CapZone. They’ve worked together on the GP side for other OZ projects in the past, but, you know, in summary, this is an opportunity to generate a really solid investor return, and provide much-needed quality housing to those who have served or are currently serving in a growing market in Colorado Springs. So, you can reach out to Joe or myself. Our information is there on the screen, and I think, Jimmy, I’m probably up against time here, so I’ll pause, and if there’s time for a question or two, I’ll do my best to answer them. Otherwise, thank you for your time.

Jimmy: Yeah, no, that was perfect, Brandon. Thank you. I know you stayed on 10 minutes just perfectly. I’ve got a little bit of a buffer built into the schedule. We do have time for a question or two before we move on to our next presenter. If you do have questions for any of our presenters throughout the course of the day, please use the Zoom Q&A tool in your Zoom toolbar. We had a question just come in, actually. Is the housing market-rate housing, or is it subsidized at all, or is it built to be affordable by design, or… How would you classify the housing in your project?

Brandon: Yeah. So, we’ve made sure that the rents align with the what’s called BAH, the basic allowance for housing of the active-duty population here in Colorado Springs. So, we’re also in talks with the city, and other veteran’s services organizations in the area, to figure out how we can potentially deliver projects to veterans that may have unique housing needs. So, it’s something that we continue to explore with the city, with veteran’s services organizations in the area, you know, with CHFA and the Department of Housing here in Colorado. So, market rate, but we’re working with other organizations to see if there are opportunities for creative options in that regard.

Jimmy: Good. I have a question that I think might come up across the course of the entire day here, is, you know, has the new interest rate environment impacted your progress at all? Is that kind of hurting you a little bit, or are you going along just fine with development as-is, or… Or how do you work around that challenge of a much higher interest rate environment than we had a year or a year and a half ago?

Brandon: Yeah, and that’s a great question. It’s certainly challenging, but there are, you know, opportunities, such as, you know, the HUD 221(d)(4). The gentleman that was on prior mentioned that. Generally, there’s 100 to 200-basis-point improvement in those rates, as opposed to just general, you know, commercial construction financing. So, there are tools available. We’re working through the process with HUD as a potential lender for this project. You know, meeting with folks at the state for other projects, such as the Non-LIHTC Forwards program, which has some affordable housing associated with it, and some creative financing on both the debt and equity side. So, we love this market. I think we’re uniquely positioned in that regard, and can kind of continue to move forward, just due to some of the unique economic environments here. But, you know, you, I think, would be wise to continue looking at some of those creative financing options.

Jimmy: Time for one or two more questions. Bill asks, “Is this the same quality housing as one would find in new apartments?”

Brandon: Yes. This is a Class A building. This is, you know, a place any of us would be happy to live. I didn’t really get into the amenities much, but, you know, there’ll be a clubhouse, with a pool, with a gym, hopefully with some co-working space. But yes, this is gonna be a phenomenal project, a Class A building, in an area of town that desperately needs this type of housing.

Jimmy: Good. And then, the last question is, “Plan for distributions or dividends to your investors? When do you think this will be cash-flowing?”

Brandon: Yeah, great question. So, let me… I probably don’t have too much time yet, but I can share a quick snapshot here on the deal overview slide. And, you know, this is a question I think we can better address on a larger call, with Joe and the Tocqueville team on board, but whoever asked that question, here’s kind of our high-level annual projections, and we’d love for you to reach out, and we’d love to schedule a follow-up call to answer that question in more detail.

Jimmy: Perfect. Well, with that, Brandon, we are at time, but thank you. Thanks to Joe Zock. Thanks to CapZone and Tocqueville for presenting today and sponsoring today’s event. Really appreciate your time, and we’ll catch you next time, all right, Brandon? Appreciate it.

Brandon: All right. Thank you, Jimmy.