This page has been personalized for you and contains confidential information. Please do not share this webpage or link. You can log in to your existing Cadre account to learn more about the investment.
Cadre is partnering with Regent Partners and Mariner Group (collectively the “Sponsor”) to develop Pilot & Park, a Class A multifamily asset (the “Asset” or the “Property”) located in Downtown Savannah’s rapidly transforming Eastern Wharf mixed-use district along the Savannah River. Cadre and the Sponsor are also owners and development partners on the Thompson Savannah, a hotel development completed in July 2021 located in the Eastern Wharf and adjacent to Pilot & Park.
In August 2022, Cadre entered into a joint venture with Sponsor to develop this shovel-ready Property and simultaneously acquired the land, executed a GMP contract and closed on a construction loan. We were attracted by the opportunity to partner with an experienced, repeat Sponsor on the development of a high-quality asset in an amenitized location with robust demand drivers.
Class A Product with Limited Competing Supply
Compelling Transaction Dynamics
Well-Aligned Repeat Sponsor
Upon delivery in 2024, Pilot & Park will be a four-story 278-unit, Class A multifamily community with an average unit size of 827 sf and rents of $2,609 ($3.16 psf). The 3.2 acre site will consist of 230k sf of living space which will surround two courtyards and a resort style pool. Wood and steel frame construction will surround a parking garage (406 total parking spaces: 1.5x parking ratio per unit or 1.1 per bed). Property amenities will include a fitness room / yoga room, co-working area, club room, chef’s kitchen, dog spa, and bike storage. Unit features will include stainless steel appliances, granite countertops, decorative lighting, and 9-10 foot ceilings.
We acquired the land for the development in August 2022 (“Asset Close”). We anticipate holding an initial investor close in Q3 2022 (“Initial Close”).
Cadre is partnering with Regent Partners and Mariner Group (collectively the “Sponsor”) to develop Pilot & Park. The Sponsor has a longstanding relationship with senior members of Cadre’s Investments Team. Sponsor is an owner and the developer of the broader Eastern Wharf masterplan including the Thompson Savannah which it developed and owns alongside Cadre.
Established in 1998 by company Chairman and Founder David Allman, Regent Partners is a leading real estate investment, acquisition, and development services firm. The Atlanta-based partnership has invested ~$2.6bn in more than 10mm sf of office, residential, hotel space, mixed-use and land holdings. The senior executives have over 160 years of combined experience and have developed various high-profile mixed-use projects, including Buckhead’s Tower Place and Sovereign developments.
Mariner Group is a seasoned sponsor focused on multifamily and mixed-use developments in the Southeast region. The principles of Mariner Group boast a broad scope of experience but also bring local market knowledge. In the Savannah market, Mariner has the local relationships and leverage that are evident in sourcing this opportunity. Headquartered in Atlanta, Mariner Group has completed over 1,000 luxury multifamily units across four projects, three of which are in Savannah.
Please see the Sponsor Overview section of the Investment Memo for additional detail.
The Sponsor is committing approximately $3.6mm (10%) of total equity to the transaction. The remaining share, approximately $32.4mm (90%), will come from Cadre’s investor partnerships including Cadre Direct Access Fund.
Cadre is funding an additional $4.0mm of equity to account for Cadre fund costs, carry, and fees. This results in the total Cadre equity commitment being approximately $36.4mm.
We have committed to backstop the transaction; Cadre’s senior partners and employees invest personally in this transaction through the Cadre Direct Access Fund, aligning interests with investors.
We closed a $66.5mm construction loan in Aug 2022. The rate is SOFR+250 bps with a four year initial term.
As with most development projects, primary risks include (i) development budget and timing, (ii) market dynamics, including Savannah’s significant multifamily supply pipeline, and (iii) exit valuation given a large component of the returns are not derived from cash flow. We believe these risks are mitigated by (i) already having a signed GMP construction contract and Sponsor’s direct relevant experience and a strong track record, (ii) strong microlocation and ability to create a premier product while offering rents at a discount to comparable product, and (iii) conviction in the Savannah market due to strong market fundamentals. Cadre maintains a ~$3.3mm hard cost contingency in excess of the 1% held in the GMP to account for possible escalations.
Please reference the Investment Memo for Sensitivity Analysis, as well as additional risk factors and mitigants.
Investors who commit or fund after the Initial Close (defined above) and after the date that Cadre closes on the underlying Asset will be subject to contribution interest calculated at a 6% annual rate from the Initial Close to the date of the subsequent investor close. The contribution interest is paid to a Cadre affiliate that funds remaining equity between the date Cadre closes on the underlying Asset and subsequent investor closings. Any such cost will be deducted from the investor’s initial distribution(s).
Regardless of when they commit or fund, all investors are entitled to their share of Asset cash flows (if any) from the Initial Close onward. More details can be found under "Subsequent Closings" in the "Summary of Principal Terms of the Investor Partnership" of the Final Investment Memo.
Cadre charges investors the following:
3.5% commitment fee on each investor’s capital commitment;
1.5% annual asset management fee and 0.5% annual administration fee on the fair value of the applicable Cadre fund’s investment in the joint venture.
Refer to Section 8.7 of the Partnership Agreement for a determination of “fair value”Other deal fees are charged by the LLC joint venture. Investors should review the Investment Memo for complete fee disclosures and descriptions.
The partnership will be calling 100% of the committed capital at the time of the Initial Close.
Through the Cadre Secondary Market, you may have an option to offer your position for sale on our platform at a target sale price based on the net asset value (“NAV”) of the investment at that time. Investments are typically eligible to post on the Cadre Secondary Market six months after the initial investor closing. However, liquidity and pricing are not guaranteed. Prior to investing, you should assume that you may be required to hold your investment for the duration of Cadre’s hold period.
See important disclosures below.
Investors will purchase an ownership interest in a Delaware limited partnership managed by Cadre. The Cadre partnership and an affiliate of the Sponsor entered into an LLC joint venture that indirectly owns the property.
Certain non-U.S. or tax-exempt investors may alternatively opt to purchase ownership interests through a parallel blocker partnership.
The Sponsor is responsible for providing Cadre with reporting data that we use to prepare updates for the investor partnership. Investors can expect to receive the following:
Property Updates: We provide quarterly updates for each property within 45 days of quarter-end. An online summary and full downloadable report can be accessed through our Portfolio page.
Capital Balance Statements: We publish investor capital balances on our Portfolio page. We also provide quarterly downloadable statements roughly 60 days after quarter-end. All current and historical statements are available for download on our Documents page.
Tax Reporting: For U.S. taxpayers, we aim to provide annual K-1 statements by the first week of April. All current and historical statements are available for download on our Documents page.