(From left to right) C. Joseph Blackbourn, Drew Brown, David Burner and John Graham
2017 ULI Arizona Shark Tank catches investor interest but no bites
Tailored after the popular TV show and following the huge success of Shark Tank at ULI Fall Meetings, ULI Arizona again brought together expert money and real local deals, including a panel of “sharks,” moderated by C. Joseph Blackbourn, president and chief executive officer for Everest Holdings, to evaluate the proposals and offer the audience a look behind the closed doors of an investment committee.
This year’s Fifth Annual ULI Arizona Shark Tank was held on Thursday, November 16 in front of a standing-room only crowd at the Omni Montelucia Resort in Scottsdale.
In addition to Blackbourn, this year’s sharks also included: Founding Partner of DMB Associates Drew Brown, President and CEO of Circle Road Companies David Burner as well as President and CEO of Sunbelt Holdings John Graham.
While the sharks expressed interest in the three different project proposals presented this year, there were no bites, but many in the audience showed additional interest when asked by the sharks after each presentation.
Like always, those chosen to pitch the sharks were selected based on their actual experience with real estate development, an active and interesting deal to discuss and the ability to make a concise and captivating presentation.
Presenters included a local ULI member that founded an urban infill real estate development company in 2012 when he was only 20-years-old, which he still runs, and a few Arizona State University graduates that pitched two different projects: a senior living community in Texas and luxury residential community in Chandler.
Just like the TV show, this year’s sharks were quick to smell blood in the water during presentations and did not hesitant to jump in and ask questions about the project’s specifics, schedule, budget, investment returns and pro formas.
Gifford Groves – CIMA Holdings, LLC
First to present was Massimo “Max” Sommacampagna, founder and owner of CIMA Holdings, along with his partner Blake Sanders.
Combined, they bring nearly 20 years of industry experience to the company, which has successfully executed on four ground-up development projects totaling over $2 million in cost and 10,000 SF in residential for-rent and for-sale projects throughout the entire project cycle, including acquisition, development, construction, lease up, management and sale.
They were seeking $650,000 in development capital for a 12-unit for-sale residential subdivision development at an infill site in Arcadia near 32th Street and Thomas Road. Each unit would total 2,175 SF of livable space, ranging from 3-4 bedrooms with 2.5 bathrooms.
The project’s investment summary consisted of a 67- to 33-percent split between investors and sponsors until the equity investment is returned. Additionally, net project cash flows following the return of the equity investment will be split 50/50.
Senior Living Investment – Brydant
Next up was Brydant, a full-service real estate firm focusing on corporate and public benefit assets with projects throughout the country.
The company’s Chief Investment Officer Michael Zajas, an ASU graduate with 10-plus years of real estate experience, led the presentation for a 211-unit senior living community called Bridlewood Senior Living in Amarillo, Texas, which would provide the full continuum of care, including independent and assisted living as well as memory care.
He described the market as full of opportunity because no large institutions have not acquired a controlling majority of the market. In addition, 10,000 Baby Boomers retire each day and while they may not need the full continuum of care offered at these senior living facilities yet, they may eventually.
The $63.5 million development would serve as a prototype facility to test the company’s model, which if successful, Brydant would then roll-out in 15 additional markets, in particularly Arizona. Zajas says his company tends to look for overlooked and underserved secondary market like Amarillo, which bodes well for Greater Phoenix.
Zajas was seeking $17 million in new equity from the sharks, which would account for 27-percent of the total project cost.
To learn more about this project and investment opportunities, contact Zajas at 480-277-2516; firstname.lastname@example.org.
St. Moritz Residence – Sunset Luxury Residential
The last presentation of the day drew little to no criticism for the sharks who each commented on how “incredibly well done” it was, how the presenters truly had their “arms around the project” and understood how “it works.”
Both ASU alumni, Franco Calabrese and Frank Gidaro of Sunset Luxury Residential, started the company to pursue personal real estate endeavors like residential development projects such as St. Moritz Residences, which is the luxury townhome community project that they pitched to sharks.
Consisting of 31-luxury for-sale townhomes in Chandler, the community would be located at a high-profile infill parcel about 0.5 miles from Chandler Avenue and Arizona Boulevard, which was recently named the fourth hottest intersection in Phoenix by ULI.
The total project cost was said to cost $8.7 million or roughly $297,000 per home to develop, which was described as $20,000 less per unit that comparable communities nearby.
Sunset Luxury Residential was seeking an equity investment partner for 80 percent of approximately $1.1 million.