Riaz Capital Fund V, LP - Distressed Value-Add Fund

INVEST IN VALUE-ADD MULTIFAMILY REAL ESTATE

A real estate market recovery is beginning -
now is the time to invest in our three-pronged
strategy of distress, solar, and densification


Play Now Track record performance metrics referenced in this video are gross of fees. Past performance is not indicative of future results.

Projected Fund Returns*

2-2.5x

Net Equity Multiple

12-17%

Net IRR

9.5-13.1%

Avg. Cash on Cash


OUR VALUE-ADD
TRACK RECORD*

2.3x

Net Equity Multiple

$18M

Total Distributions

9+

Year Hold

NOW IS THE TIME TO
INVEST IN REAL ESTATE

Multifamily Real Estate Prices [1]

NOW IS THE TIME TO
INVEST IN REAL ESTATE

Commercial real estate is a cyclical market and is prone to boom and bust cycles. The boom provided by exceptionally low-interest rates has given way to a period of contraction due to higher interest rates and tighter financing conditions. As with every cycle, the time to buy and diversify your portfolio is when prices are low - we believe that period is now.

Girl in a jacket

$850B Wave of Distressed Mortgages Coming Due

Over $850 billion of low-rate multifamily mortgages are maturing by end 2026. Given much higher interest rates, many of these loans will be impaired at the same time banks have sharply curtailed lending. We believe this will force many property owners into distressed sales.[2]

Girl in a jacket

$500B+ Available in Energy Incentives

The Inflation Reduction Act (IRA) provides an estimated $500 billion to $1.2 trillion in credits and rebates for climate change mitigation, renewable energy, and energy efficiency programs, including for multifamily properties. [3]

Girl in a jacket

AI Tech Wave Just Beginning

The Bay Area is projected to add ~100,000 AI jobs by 2030. We anticipate an influx of talent into California more broadly which will lead to rising rental demand over the next decade as housing supply fails to keep pace. [4]

Girl in a jacket

New Pro-Housing Laws Make Adding Units Easier

Recent California ADU legislation enables up to a 25% unit count increase and speedy approval for small-format unit additions to existing buildings.

DOWNLOAD FUND DECK

ATTEND OUR NEXT WEBINAR

Learn more about our Distressed Value-Add Fund

Join us for a discussion on how looming distress and federal and state legislation are uncovering real estate investment opportunities with high risk-adjusted returns and cashflows.

Format: Presentation (30 mins), followed by Q&A (30 mins)

Wednesday, May 15th, 2024
11:00 AM PT / 2:00 PM ET
REGISTER FOR THE WEBINAR
Image 7

Riaz Taplin

Principal & Founder,
Riaz Capital

Image 7

Mathew Salter

Vice President of Investor Relations, Riaz Capital

THE RIAZ CAPITAL EDGE

We create value for residents and investors while implementing smart cost reduction measures.

Girl in a jacket

Acquisitions Identified Using Data, Ahead of Competition

We identify discounted and distressed acquisition opportunities by analyzing loan databases for early signals of distress, and utilizing our relationships with debt and multifamily brokers.

Girl in a jacket

Track Record of Using Government Programs for Density and Solar

We have leveraged the State Density Bonus Law across 23 buildings and 1900+ units [5] and State ADU legislation enabling up to 25% unit-count increase across 9 ADU pilot projects. Our ~4MWh solar installations powering 1500 units [6] are designed to tap Inflation Reduction Act (IRA) incentives, which REITs cannot.

Girl in a jacket

Risk Mitigation Through Efficient Capital Structure

We reduce our cost of capital by up to 170 bps through mission-based rate discounts from federal agencies, which affords us ~$1-2M in debt savings across the life of an average loan [7]. We also underwrite with downside protection and maintain low leverage.

Girl in a jacket

Design Innovation & Efficient Construction

With decades of construction and design expertise, we efficiently develop small-format housing to add rentable square footage at lower cost. Our cost per residence is $250K vs. $570K (Bay Area average) and our timeline from acquisition to operation is 30 months vs. 72 months (SF average) [8]. We add units (ADUs) at a low ~$150K/unit cost.

Girl in a jacket

Tech-Enabled Marketing & Operational Efficiency

We leverage technology to reduce leasing and operating costs including an integrated online leasing platform, virtual tours, and keyless entry. We've leased over 200 units without
physical tours.

INQUIRE NOW

How we create value in the fund

Investing in value-add projects since 2012 has helped us refine and inform our process.

Data-Driven

Source distressed assets through a proprietary database of maturing loans. Acquire distressed assets with strong fundamentals and value-add potential.

Add Apartments

Convert garages and open spaces into additional housing units to increase property income.

+

Solar

Use government incentives to offset the cost of solar installations and other value-add energy upgrades.

+

AI-Driven

Leverage technology to automate and improve operations including digital leasing platforms, keyless entry systems, AI maintenance automation, among others.

+

Lower Cost of Capital

Leverage government-backed affordable housing discounts and incentives to lower borrowing costs.

+
Acquire
Distressed Assets
Add More
Housing
Add Solar
Energy
Technology
Improvements
Borrow at
Lower Rates

Acquire Distressed Assets

Source distressed assets through a proprietary database of maturing loans. Acquire distressed assets with strong fundamentals and value-add potential.

Add More Housing

Convert garages and open spaces into additional housing units to increase property income.

Add Solar Energy

Use government incentives to offset the cost of solar installations and other value-add energy upgrades.

Technology Improvements

Leverage technology to automate and improve operations including digital leasing platforms, keyless entry systems, AI maintenance automation, among others.

Borrow at Lower Rates

Leverage government-backed affordable housing discounts and incentives to lower borrowing costs.

DOWNLOAD FUND DECK

RELATED THEMES IN THE MEDIA

HOW TO PLAY THE PROPERTY MELTDOWN IN FIVE CHARTS

Apartments might be a better bet for those hunting for distressed assets. Prices for multifamily apartment buildings have fallen by a fifth since March 2022. Some owners who paid top dollar for properties during the pandemic using short-term, floating-rate debt may be forced to sell if mortgage repayments become unmanageable when their interest rate hedges expire… Read More

The Wall Street Journal, Aug 30, 2023

The Clearest Sign yet That Commercial Real Estate is in Trouble

Foreclosures are surging in an opaque and risky corner of commercial real-estate finance, offering one of the starkest signs yet that turmoil in the property market is worsening. Lenders this year have issued a record number of foreclosure notices for high-risk property loans, according to a Wall Street Journal analysis… Read More

The Wall Street Journal, Nov 13, 2023

'Granny flats' play surprising role in easing California's housing woes.

More than 23,000 ADU permits were issued in California last year, compared with fewer than 5,000 in 2017 — which was around when ADU permitting began to take off thanks to legislative and regulatory changes in the state. The state now requires faster permit approval by localities, and establishes that cities must allow ADUs of at least 850 square feet...Read More

The Washington Post, May 21, 2023

How will the IRA impact commercial real estate?

While you’ve no doubt heard about the Inflation Reduction Act (IRA), it may have evaded your sphere of concern as something only relevant to those focused on battling economic inflation or combating climate change. You may want to take a second look, though, as the bill has major considerations for the commercial real estate (CRE) industry… Read More

Globest.com, Sep 21, 2022

ATTEND OUR NEXT WEBINAR

Learn more about our Distressed Value-Add Fund

Join us for a discussion on how looming distress and federal and state legislation are uncovering real estate investment opportunities with high risk-adjusted returns and cashflows.

Format: Presentation (30 mins), followed by Q&A (30 mins)

Wednesday, May 15th, 2024
11:00 AM PT / 2:00 PM ET
REGISTER FOR THE WEBINAR
Image 7

Riaz Taplin

Principal & Founder,
Riaz Capital

Image 7

Mathew Salter

Vice President of Investor Relations, Riaz Capital

Learn how we add value to properties

DOWNLOAD FUND DECK

Rose on Bond

1638 47th Ave, Oakland, CA 94601

Rose on Bond

1638 47th Ave, Oakland, CA 94601

VALUE-ADD CASE STUDIES

Our decade-long track record of turning around distressed assets*

Property 1

Contra Costa

1460 Contra Costa

2.46x Gross Equity Multiple
2.9 Years
Held
$6.4M Total
Profit
$10.8MTotal Distribution

We purchased this off-market property with rents set at 60% of nearby institutional comparables. With extensive building repurposing and aesthetic upgrades, the rental rates beat those of local comparable properties with a basis of ~$13M.

Property 1

Eastwood

1715 High St.

2.10xGross Equity Multiple
2.5Years
Held
$1.6M Total
Profit
$3.0M Total Distribution

1715 High Street is a 33 unit apartment building in Oakland's Fremont. After executing unit upgrades, common area modernization, and building infrastructure improvements, we sold the building in 2016.

Property 1

2000 Linden

2000 Linden Street

3.76xGross Equity Multiple
9Years
Held
$1.9MTotal
Profit
$3.4MTotal Distribution

We purchased this property in October 2013 for $1.6M and sold it in April 2022 off-market for $5.2M. Our first successful implementation of micro-living, 2000 Linden, which was 100% leased within 30 days of opening, averaged an exceptional 95% occupancy in the first year.

Property 1

Rose on Bond

1638 47th Ave.

The Rose on Bond project renovated an existing church and adjacent building, converting it into 60 rental apartments consisting of studios, 1 bedrooms, and 2 bedrooms. We acquired the land on which this historic building stood for $1.8M and performed an extensive restoration valued at $13.4M that upgraded the interiors for modern living while maintaining its unique aesthetic. Now restored to its original beauty, this iconic building bridges the gap between the classic Spanish Revival style and elements of 21st century interior design.

Property 1

Artthaus Grand

220 Grand Ave Oakland, CA

After purchasing the property in 2019 for $3.9M, we completed a 20-month, $6.5M renovation that retained only the shell of the building while modernizing everything else. The result was an expansion in unit count from 8 to 11 (which created a total of 33 rentable suites), thorough upgrades to the units and common areas, and significant aesthetic improvements to the exterior. The property now offers a mix of furnished and unfurnished suites with private kitchenettes, built-in storage, and natural lighting, as well as a community kitchen, package concierge, bike storage, smart locks, and a virtual doorman.

Property 1

Oakbrook Manor

1232 E 19th St Oakland, CA

When we first encountered Oakbrook Manor, the property was poorly managed, struggling with a 63% occupancy rate. We purchased it at $44M - a ~$9M discount to its pre-Covid value - because it had strong fundamentals, ADU potential, and a stellar location near Lake Merritt. We upgraded both interiors and exteriors, including fresh paint and new electrical systems, added a fitness center, and converted 34 unused garages into 17 well-appointed studios (ADUs). Our value-creation process including densification resulted in a lift of 125 basis points or ~50% increase to project-level NOI over the development period.

*Performance figures shown gross of fees. Past performance is not indicative of future results.

NILES STATION -
A VALUE-ADD CASE STUDY

When we first encountered Niles Station through a trusted broker, the family who had owned the property for 40 years was ready to retire.

We acquired this 50,000 square foot site for its strong fundamentals and ADU potential at a $3M discount to its pre-pandemic value.

Our value-creation process resulted in a cap rate increase of 178 basis points and a ~81% increase to project-level net operating income over the project's development period.

Download the Case Study

About Riaz Capital

Riaz Capital is a Bay Area-based real estate development and asset management company, focused on moderate-income and student housing in California. Operating in the Bay Area since 1977, Riaz Capital has profitably developed housing in California across 160 different residential and multifamily projects.

~$750M

Total Real Estate Assets Under Management

3,600 Units
56 Buildings

Under Management and Development

20+ Years

of Multifamily Experience in California

RIAZ TAPLIN

Principal and Founder

MAX RESHULSKIY

Chief Portfolio Officer & Partner

SETH LANG

Senior Vice President of Development & Partner

PAUL DICARLO

Chief Investment Officer & Partner

ARIEL BOYCE-SMITH

Human Resources and Legal Affairs

MATHEW SALTER

Vice President of Investor Relations

LISA VILHAUER

Vice President of Design and Entitlement

TIM ROONEY

Vice President of Development

Go Back

FAQs

USD $250,000 (inquire about grouping).

For Accredited Investors only.

2.0-2.5x Net Equity Multiple, 12-17% Net IRR, and 9.5-13.1% Target Average Cash on Cash following investment period.

The fund target size is $100M with a $250M cap.

The fund will invest in distressed and other value-add assets with the potential for greater densification. The target properties will be located in Western U.S markets, primarily in California.

The investment term is 9 years with two one-year extension options


     What are the Management Fees?

There is a 2% Asset Management Fee on effective gross income plus additional property-level construction, management, and financing fees.


      Is there a Preferred Return?

Yes, Limited Partner investors are entitled to an 8% preferred return before the General Partner is entitled to any profit sharing.


     Are there any Fee Discounts available?

Yes. Carried interest discounts are available for commitments made prior to the fund’s first close on June 30, 2024.


After Limited Partners receive their 8% preferred return, the General Partner is then entitled to a 25% catch-up. Carried interest to be split 75% to Limited Partners and 25% to the General Partner thereafter.

The fund closing date is June 30, 2025. Carried interest discounts are available for commitments made prior to the fund’s first close on June 30, 2024.

This fund is not a Qualified Opportunity-Zone Fund.

CONTACT US

TO INVEST IN RIAZ CAPITAL FUND V, LP (DISTRESSED VALUE-ADD FUND)

Fund Safe Harbor
Riaz Capital Fund V, LP - Distressed Value-Add Fund is offering securities under Rule 506(c) of Regulation D “Investment” to accredited investors. Nothing in this advertisement constitutes an offer to sell or the solicitation of an offer to purchase securities or an interest in the partnership. Any such offer or solicitation may only be made by means of delivery of the Partnership Agreement, Subscription Agreement, and Private Placement Memorandum which will contain material information not included herein and shall supersede, amend and supplement this presentation in its entirety.

This advertisement is provided for informational purposes only and is intended solely for the person to whom it is delivered. This advertisement is to be used only in connection with recipient’s consideration of an investment with Riaz Capital. This presentation is confidential and may not be reproduced or distributed without the express written consent of Riaz Capital. By receipt of the enclosed material and information, the recipient agrees that this confidential information will be permanently kept confidential and will not be used in whole or in part for any purpose other than evaluating the Investment.

In addition to information about the securities, this website may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Any operational projections or financial projections or returns shown on this website are estimated predictions only, are hypothetical, are not based on actual investment results and are not guarantees of future results or actions. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on this website (including historical returns paid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment. Any investment information contained herein has been secured from sources that Riaz Capital believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance.

It is advised that you consult an investment advisor, legal advisor, and tax professional to fully understand any potential implications before making an investment in the partnership.

Regulatory Risk
The information contained herein is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. The Riaz Capital Fund V, LP - Distressed Value-Add Fund securities are not registered and are offered in reliance of an exemption from registration. Neither FINRA, the SEC, nor any other securities regulator have approved of any of these securities.

Investment Risk
Investments made under Regulation D involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Investors may lose all or a substantial portion of their investment.

An investment in the partnership involves significant risks and investors should have the financial ability and willingness to accept the risk characteristics of the Investment. Investors should review the Partnership Agreement and Private Placement Memorandum, conduct such investigations and evaluation as they deem necessary or appropriate and consult their own legal, accounting, tax and other advisors in order to make an independent determination of the suitability and consequences of the Investment.

Further, these securities not listed on any exchange. A secondary market for these securities does not currently exist and may never develop. Investors should not purchase these securities with the expectation that a market eventually will develop. Further, even if a market did exist or develop, the securities have significant restrictions on their transferability.

Performance
This advertisement may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Any operational projections or financial projections or returns shown on this presentation are estimated predictions only, are hypothetical, are not based on actual investment results and are not guarantees of future results or actions. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown.

Performance of the Investment may be volatile, and investors may experience results that differ materially from those shown herein. There can be no assurance that estimated returns or any projections set forth in this presentation will be realized or that actual returns or results will not be materially different than those estimated herein.

In addition, other financial metrics and calculations shown on this presentation (including historical returns paid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment. Any investment information contained herein has been secured from sources that Riaz Capital believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Nothing on this presentation should be interpreted to state or imply that past results are an indication of future performance.

Source

  • Freddie Mac AIMI - Price Index. Graph from late 2023 onwards is broadly illustrative of an anticipated trend, and not a projection, Sept. 21, 2023
  • Mortgage Bankers Association (MBA), Newmark Research, October 2023
  • The Inflation Reduction Act: Here’s what’s in it, McKinsey & Co., October 2022
  • Article by JLL Research, PwC, June 2023
  • Including units in entitlement
  • Installed or on the way
  • Over 10 years on a $20M loan. Reflects a $220K rate buydown
  • For ground up construction
Value Creation why us
×

Have questions?

Register for our next investor webinar.

REGISTER