DVO ACCESS FUND LLC

  • Summary

    Summary

  • Strategy

    Strategy

  • Market

    Market

  • Team

    Team

  • Record

    Track Record

  • Terms

    Terms

  • Documents

    Documents

  • Closed

DVO Access Fund LLC

Investment Overview

  • Summary

    Summary

    DVO Gap Equity Fund Overview

  • Strategy

    Strategy

    Investing in Multifamily Assets

  • Market

    Market

    DVO Investment Footprint & Case Studies

  • Our Team

    Team

    Real estate professionals with 150+ years of experience

  • Track Record

    Track Record

    Prior Internal Rate of Return (IRR) of 26.7%

  • Terms

    Terms

    Summary of Investment Terms

  • Documents

    Documents

    Executive Summary, Presentation, PPM ...

Investment Summary

Fund Type

fund

Multi-Family Assets

DVO Fund Size

$150,000,000

Amount Closed

$0

Asset Profile

Value Add

Min. Investment

$250,000

Life of Fund

6-8 Years

Targeted Return

12% to 16%

Limited spots available to invest

Fund Description

DVO Access Fund LLC (the “Fund”) will invest substantially all of its assets in DVO Gap Equity Fund, L.P. (the “DVO Fund”). DVO Real Estate, LLC (“DVO” or the “Firm”) is seeking to raise up to $150 million in capital for DVO Fund. DVO offers a unique investment strategy by investing "gap equity" via a senior preferred structure in multifamily properties located in select top-tier markets within the United States. DVO offers a high 9% preferred return. DVO's prior investments have a proven track record with a realized net IRR of 26.7% .

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Key Considerations

  • Access to an Institutional Fund - The Fund provides individual investors with access to a $150 million institutional real estate fund named DVO Gap Equity Fund. DVO has acquired 23 properties as of May 2017, totaling 5,134 units with a total value exceeding $900 million.
  • Low Minimum Investment - The Fund has a low minimum investment amount per investor. The Fund will aggregate the capital raised with other investors allowing it to meet the $2 million minimum investment amount of DVO Fund.
  • Proven Track Record - DVO's prior investments have a realized net IRR of 26.7% .
  • Attractive Investment Markets - DVO’s Investment Locations: Denver, New York City, Portland, Seattle, Northern and Southern California.
  • Unique Investment Strategy - DVO capitalizes on inefficiencies in the market by investing gap-equity via a senior preferred structure in multifamily properties located in select top-tier markets within the United States.
  • High Preferred Return - DVO pays a 9% Preferred Return.

DVO Fund Overview

  • Private real estate investment management firm based in New York City
  • Founded in 2012 by David Valger, formerly with RCG Longview
  • Multifamily specialist with 14+ years of multifamily investing, including more than 28,000 apartment units
  • Capital partners include institutional real estate investment managers, family offices and high net worth investors
  • 100 years of combined relevant professional real estate experience
  • Yield + Value Creation Strategy
  • Targeted 12% - 16% net IRR and 7% - 9% net cash-on-cash
  • Generate superior risk-adjusted returns while taking less than standard equity risk
  • Institutional underwriting, structuring and asset management with owner/operator perspective
  • Structure provides for tax efficient income generation
  • 9% Preferred Return
  • DVO's prior fund has acquired 23 properties equaling 5,134 units with a total value of over $900 million.

Why Real Estate?

  • Diversification

    Real estate investments are considered a non-correlated alternative asset class.

  • Cash Flow & Appreciation

    Stabilized real estate generally benefits from regular and predictable cash flow.

  • Low Interest Rate

    Historically low interest rates may allow real estate to generate higher cash flows.

  • Income Tax Treatment

    Ordinary income can be minimized through the use of an accelerated depreciation strategy that may generate passive losses.

  • Hedge Against Inflation

    Rents, land values and replacement costs typically move upward with inflation.

  • Multiple Exit Strategies

    Real estate assets can be disposed of through individual or portfolio liquidations, asset refinancing, mergers, or a “roll up” through a portfolio capitalization.

DVO Investment Objectives

Maximizing Returns through Value-Creation Strategies

  • Assemble a strategically diversified portfolio of Class B value-add multifamily properties
  • Best-in-class local and regionally focused sponsors
  • Targeted total deal capitalization: $10 - $50 million
  • DVO Gap Equity investment: $2 - $15 million
  • Diversified portfolio with consistent cash flowing assets
  • Upside participation via preferred returns
  • Downside protection through Sponsor subordination
  • Existing cash flow with opportunity to grow NOI
  • Value driven through repositioning and renovation
  • Typical hold period: 3 - 5 years

Investment Highlights

Investors in the DVO Fund can benefit from investing in value-add Multifamily Assets from:

  • Downside Protection & Risk Mitigation

    The local Partner/Sponsor’s equity is subordinate to DVO’s equity in both cash flow and IRR turning the Sponsor’s equity into a ‘risk adjustment’ or buffer for DVO’s investment in the event of a downside scenario.

  • Sponsor Outperformance

    Sponsor’s equity risk and higher promote above a selected hurdle create a strong alignment of interest between DVO and Sponsor; incentivizing Sponsors to bring their top performing deals to DVO.

  • Fundamental Value Investment Philosophy

    Focus on investing in well-located, underperforming properties where value can be created and NOI increased through the implementation of renovation and repositioning, as well as creative recapitalization.

  • Regional & Local Expertise

    Local Partners/Sponsors’ ‘boots on the ground’ provide local market intelligence and in-depth knowledge critical to making informed investment decisions, risk mitigation on an on-going basis and creating value through expert asset management and/or repositioning strategies.

  • Underserved Market

    Equity investments of $2 - $15 million are too small for most institutional capital and too large for “country club” capital. Limited competition enables DVO the ability to structure more advantageous deals that generate superior risk-adjusted returns.

GAP Equity Overview

Participate in Upside While Protecting the Downside

  • DOWNSIDE PROTECTION

    Downside protection of a debt investment via preferred return hurdles in waterfall (typically to 10%)

  • UPSIDE PARTICIPATION

    Upside participation of an equity investment via uncapped participation in project cash flows

  • LENDING BENEFITS

    Receives similar rights as typical JV Equity without limiting senior lender options

  • MANAGEMENT RIGHTS

    DVO retains expanded major decision rights, budget approval and capex administration

  • PREFERRED RETURNS

    Preferred return hurdle further incentivizes Sponsor in achieving business plan in order to participate in cash flows

U.S. Multifamily Statistics

  • Long-term positive fundamentals projected for the US multifamily market
  • Continued, robust demand for multifamily units resulting from demographic trends, increased household formations, and historically low levels of homeownership
  • Supply/demand imbalance in select markets from interruption of development cycle by the Great Recession

Primary Locations and Markets

  • Suburban CBD’s near high growth urban centers
  • Markets with strong job and population growth
  • Diversified economies and employer base
  • Relatively high barriers to entry

Value-Added Strategy

  • Existing cash flow with opportunity to grow NOI
  • Stabilized, in-fill projects with upside in rent
  • Predictable operating costs and capital expenditures
  • Value driven through rehabilitation, repositioning and capital improvements

Favorable Structuring

  • Sufficient flexibility to address needs of wide-array of sponsors
  • Equity like returns while taking less than equity level risk
  • Upside incentivizes Sponsor and maintains a good alignment of interests
  • Multiple ways to exit in a disciplined manner at the appropriate time

Focused Investment Strategy

Objective: Make money on the buy, distribute cash flow from operations while increasing revenue through value-added strategies, and harvest profits through a disciplined exit.

Identify well-located, quality multifamily assets in growth markets

  • High-quality, Class B properties; renters by necessity - priced out of more expensive urban centers
  • Suburban communities near high-growth urban markets
  • Partner with experienced local/regional Sponsors with successful track record

Create alignment of interest with Sponsor by appropriately structuring

  • DVO’s 8% - 10% senior preferred return provides risk mitigation
  • Majority of cash flow to Sponsor above DVO’s 2nd hurdle further incentivizes Sponsor
  • Works in lock-step with senior financing

Value-creation through asset specific business plan

  • Upgrade / renovate property with capital investment
  • Drive value by increasing operating profits through aggressive asset management improvements
  • Recapitalization to unlock trapped equity

Harvest value created through disciplined exit

  • Ability to control exit timing through major decision rights
  • Participate in up-side from value creation, but mitigate down-side through structure
  • Create multiple exit options through debt structures and JV Agreement structuring


Why Multifamily & Student Housing

Multifamily Investment Attributes

  • Apartments average return over a 30-year period is the best of the primary property sectors averaging 12%.
  • Apartments have the most efficient cash flow and typically convert 83% of NOI into cash flow compared to industrial properties at 74%.
  • Apartments have the lowest re-tenanting costs and typically have the lowest cost of debt and capital.
  • Apartment rents can adjust daily, weekly or monthly making them more reflective of changing market conditions.
  • Apartment fundamentals appear strong over the next five to seven years.

Sources: Axiometrics, NMHC

DVO Key Market Attributes


DVO's prior fund incorporates 23 properties (5,134 units) in a nationwide real estate footprint of class B+ multifamily assets; DVO has invested nearly $104 million of gap equity in 23 properties, realizing a 26.7% net IRR to date. Please see Important Disclosure Statement.

Top performing MSA’s exhibiting strong market fundamentals:

  • Employment and wage growth
  • Micro-economic engine
  • Positive new household formation
  • Favorable demographic trends
  • Employer diversity
  • High-barriers to entry

DVO Property Case Study

Tamarac Village – Denver, CO - Generated a 34% net IRR in 20 months

fund

Investment Overview

  • Acquired 564-unit multifamily ideally located in the Southeast Business Corridor of Denver, CO and in close proximity to major employment and retail centers.
  • Off-market transaction.
  • Attractive going-in cap rate of 7.0% represents a 75 – 100 bps discount to market based on transactions of like properties.
  • With current rents 11% below market, modest renovation of dated interiors and common areas is expected to create significant value and enable the property to capture in-place loss-to-lease and better compete with comparable assets.
  • As a majority of the premier infill locations in the submarket have already been developed, new construction costs range $200k - $250k, double the cost of Tamarac.

Investment Update

  • Sold Tamarac Village on November 24, 2015, after a 20-month hold period generating a 34.6% net IRR1.
  • The $74 million sales price exceeded the underwritten exit price of $73.5 million in year 5.
  • 202 units (36%) were renovated.
  • Average renovated rents of $1,000 represented 26% increase over inplace rents at acquisition.
  • Increase of 18.2% for all rents (renovated/non-renovated).
  • High occupancy averaging 96.5% maintained throughout hold period.
  • The Property averaged 15.9% cash-on-cash return.

Actual financial results may vary significantly from what is provided in this presentation. Information and targeted returns are for illustrative purposes only. All returns are based on equity invested by DVO.

Investment Summary

Property Type

Multi-Family

Location

Denver, CO

Target DVO IRR

21%

Target DVO EM

1.9x

Asset Profile

564 units

Purchase Price

$55,000,000

Total Capitalization

$63,891,783

Total Sponsor Equity

$2,959,767

Purchase Date

3/2014

Debt

$44,160.000

Sales Date

11/2015

Sales Price

$74,000,000

Realized net IRR1

34.6%

Realized net EM1

1.61x


(1) Realized returns calculated using Gap Equity Fund waterfall.

DVO Property Case Study

Sunterra Apartment Homes – Oceanside, CA - Generated a 27.5% net IRR

fund

Investment Overview

  • Acquired 240-unit multifamily asset ideally located in Oceanside, CA, one of the strongest sub-markets in the San Diego MSA.
  • Ocean view units with rents 15% below market.
  • Implementation of an aggressive asset management plan, including renovating units, charging premiums for ocean views and performing property upgrades is expected to bring rents in line with comparable properties.
  • Additional revenue and value enhancement opportunities through increased operating efficiencies, expanded utility reimbursement programs and increased pet fees.
  • Experienced regional Sponsorship with more than 8,500 units currently under ownership.

Investment Update

  • Sold Sunterra on April 21, 2016 after a 27-month hold period for $54 million, an amount significantly exceeding the $50.8 million sales price underwritten in year five.
  • The disposition generated a 27.5% net IRR1 to investors, exceeding the pro forma 19.6% IRR.
  • Recently renovated units commanded rents of $1,598, a level in-line with year three underwriting, representing an increase of $368 or 29% over in-place rents of $1,230 at acquisition.
  • Average rents across the property increased 20.9%, from $1,230 per month at acquisition to $1,488.
  • The property was 96% leased at the end of December 2015.
  • The Property averaged 13% cash-on-cash return.
  • 76% or 183 of the units were renovated.

Actual financial results may vary significantly from what is provided in this presentation. Information and targeted returns are for illustrative purposes only. All returns are based on equity invested by DVO.

Investment Summary

Property Type

Multi-Family

Location

Oceanside, CA

Target DVO IRR

19.6%

Target DVO EM

2.05x

Asset Profile

240 units

Purchase Price

$38,250,000

Total Capitalization

$43,510,145

Total Sponsor Equity

$2,123,365

Purchase Date

1/2014

Debt

$30,980,000

Sales Date

4/2016

Sales Price

$54,000,000

Realized net IRR1

27.5%

Realized net EM1

1.69x


(1) Realized returns calculated using Gap Equity Fund waterfall.

DVO Property Case Study

Dean Street – Brooklyn, NY - Realized a net IRR of 23.5%

fund

Investment Overview

  • Acquired off-market and undermanaged 34-unit multifamily asset located in the highly desirable Boerum Hill/Park Slope neighborhood of Brooklyn, NY
  • Acquisition price of $286 psf compares favorably to comparables of $500 psf.
  • In-place rents of $12 psf for the 22 rent-stabilized units are substantially below market rents of approximately $40 psf.
  • Vacated units will undergo a complete renovation which is expected to bring rents to market levels.
  • Current local multifamily capitalization rates of 4.0% cap rates magnifying the impact of rent increases on asset value by over 25x.
  • Property located within rapidly gentrifying neighborhood spurred by the redevelopment of Atlantic Yards and the new Barclays Center.

Investment Update

  • Dean Street was sold on October 20, 2014 after a 23-month hold period.
  • The $14.5 million sales price exceeded the projected $14.4 million sale in month 60 and represented a 67% increase over the $8.7 million acquisition price.
  • The sale of the property generated 44.5% more cash than projected
  • The realized net IRR of 23.5%1 exceeded the pro forma return of 17.8%.
  • During the 23-month hold period, 6 of the 19 units were renovated andconverted to market rate with an average increase from $1,257 to $3,367 per month and 2,000 square feet of rentable space was recaptured, resulting in a 24.5% of increase in the rent roll.
  • DVO captured more than 96% of the value in 23 months that was originally contemplated to occur over a five-year hold period.

Actual financial results may vary significantly from what is provided in this presentation. Information and targeted returns are for illustrative purposes only. All returns are based on equity invested by DVO.

Investment Summary

Property Type

Multi-Family

Location

Brooklyn, NY

Target DVO IRR

17.8%

Target DVO EM

2.05x

Asset Profile

344 units

Purchase Price

$8,700,000

Total Capitalization

$10,775,613

Total Sponsor Equity

$755,123

Purchase Date

12/2012

Debt

$7,000,0000

Sales Date

10/2014

Sales Price

$14,500,000

Realized net IRR1

23.5%

Realized net EM1

1.44x


(1) Realized returns calculated using Gap Equity Fund waterfall.

DVO Property Case Study

Portofino Townhomes – Wilmington, CA - Generated a 20.8% IRR

fund

Investment Overview

  • Acquired 200-unit multifamily asset in Wilmington, CA for a belowmarket 6.1% cap rate versus comparable trades with average cap rates of approximately 5.0%
  • Located in the highly desirable South Bay region of Los Angeles, in close proximity to the Ports of Los Angeles and Long Beach.
  • Unit renovations and common area upgrades are expected to increase rents to market levels, which are an average 10.0% higher than Portofino.
  • Additional revenue enhancement opportunity through conversion of parking ports to private parking garages.
  • Easy access to major local employment hub, including, Boeing, Toyota, Honda, ConocoPhillips, Northrup Grumman, Kaiser Permanente South Bay Medical Center.

Investment Update

  • Portofino was sold in February 2017, after a 45 month hold period, for $67.75 million, exceeding the underwritten month 60 exit price of $65.0 million.
  • Average in-place rents were $2,260 per unit at exit, an increase of 24.6% since deal inception.
  • A T3/T12 NOI at exit of $3.9 million represents a 37.7% increase over the TTM NOI at acquisition, driven by a 25.9% increase in revenues while controllable expenses were reduced by 8.0%
  • 53.5% of units had been renovated to a Tier I spec and 28.5% of the property had been renovated to Tier II spec, including quartz countertops and stainless steel appliances, at the time of sale
  • The Yield on cost at exit of 7.3% represents a spread of roughly 250bps from current cap rates in the market.

Actual financial results may vary significantly from what is provided in this presentation. Information and targeted returns are for illustrative purposes only. All returns are based on equity invested by DVO.

Investment Summary

Property Type

Multi-Family

Location

Wilmington, CA

Target DVO IRR

18.0%

Target DVO EM

2.03x

Asset Profile

200 units

Purchase Price

$47,700,000

Total Capitalization

$53,604,944

Total Sponsor Equity

$2,756,989

Purchase Date

6/2013

Debt

$39,820,000

Sales Date

2/2017

Sales Price

$67,750,000

Realized net IRR1

20.8%

Realized net EM1

1.76x


(1) Realized returns calculated using Gap Equity Fund waterfall.

DVO Property Case Study

Bristol Village – Aurora, CO - Realized a net IRR of 23.5%

fund

Investment Overview

  • Acquired 240-unit multifamily ideally located in Aurora, CO, a suburb of Denver, one of the top growth markets in the U.S.
  • Attractive going-in cap rate of 5.6% represents a 50 bps discount to market based on transactions of like properties.
  • Immediate loss-to-lease upside as current in-place rents are 4% below market for un-renovated units and more than 15% below renovated unit.
  • Modest renovation of dated interiors and common areas is expected to create significant value via a projected 12.3% overall rent increase
  • Existing renovated units command a rent premium of approximately $100 per month, or nearly 10% versus un-renovated units.

Investment Update

  • Bristol Village was sold on November 17th, 2016 after a 31-month hold period.
  • The $47.4 million sales price exceeded the $42.8 million sale price projected for month 60 and represents 38% appreciation
  • The realized net IRR of 23.5%1 and 1.63x cash flow multiple compare favorably to the underwritten IRR and multiple of 14.0% and 1.57x respectively.
  • During the 31 month hold period, 126 units or 52% of the property was renovated, with rents at the property increasing from 26.1% since acquisition.
  • T3/T12 NOI at exit representing a 37.1% increase since acquisition, increasing the return on cost by nearly 200bps over the old period.

Actual financial results may vary significantly from what is provided in this presentation. Information and targeted returns are for illustrative purposes only. All returns are based on equity invested by DVO.

Investment Summary

Property Type

Multi-Family

Location

Aurora, CO

Target DVO IRR

18.6%

Target DVO EM

2.68x

Asset Profile

240 units

Purchase Price

$34,350,000

Total Capitalization

$38,235,000

Total Sponsor Equity

$1,854,000

Purchase Date

5/2014

Debt

$25,875,0000

Sales Date

11/2017/p>

Sales Price

$47,400,000

Realized net IRR1

23.5%

Realized net EM1

1.63x


(1) Realized returns calculated using Gap Equity Fund waterfall.

DVO Fund Management Team

DVO has assembled a team of motivated real estate professionals with a combined 150+ years and $10B of industry experience. We execute a disciplined approach at all times, but remain agile with the ability to capitalize on opportunities as they arise. The company culture fosters teamwork and encourages innovation. We are relentless in our pursuit of performance excellence.

  • David Valger

    David Valger

    President & Founder

  • Ryan Shore

    Ryan Shore

    Vice President

  • Oleg Sabel

    Oleg Sabel

    Special Counsel

  • Nicholas Nesi

    Nicholas Nesi

    Chief Financial Officer

President & Founder

Mr. Valger founded DVO Real Estate and is responsible for the overall management, operations and investing activities of the firm. A seasoned industry veteran, Mr. Valger has with extensive experience in all aspects of real estate investing and finance, including originating, structuring, underwriting and managing real estate and corporate private equity transactions valued at more than $6 billion.

Previously, Mr. Valger was a partner with RCG Longview Debt Funds, a New York-based real estate firm offering structured equity and debt products. At RCG, he specialized in multifamily properties and was responsible for originating, structuring and underwriting a variety of real estate mezzanine and preferred equity investments, including more than 25,000 multifamily units. While there, he developed and led an exclusive Fannie Mae platform. Prior to RCG Longview, Mr. Valger founded Genesys Holdings, a technology based service provider. He is a member of the Board of Directors and the Executive Committee of the UJA/Federation of New York and a Board member of The Jewish Community Relations Council of New York. Mr. Valger received a B.A. from Binghamton University with a Major in Art History and a Minor in Biology. He earned an M.B.A in Real Estate & Entrepreneurial Management from the Wharton School of the University of Pennsylvania.

Acquisitions & Underwriting

Mr. Shore is responsible for DVO’s acquisitions, asset management and dispositions. Mr. Shore has more than eight years of experience in commercial real estate investing and finance, including originating senior debt and mezzanine loans, debt restructurings and equity investments. Throughout his career, he has originated and managed nearly $1 billion in total capitalization of real estate transactions. Previously, Mr. Shore was an associate with Bank of America where he managed a $500 million loan portfolio of retail, office and residential properties, restructured more than $1 billion in senior syndicated notes related to under-performing assets and originated over $140 million in new loans. Mr. Shore received a B.A. in Finance from Boston University’s School of Management and an M.S. in Real Estate Development from Columbia University.

Structuring, Legal Due Diligence & Closing

Mr. Sabel serves as DVO’s outside legal counsel and oversees the legal structuring and closings of DVO’s real estate transactions. Throughout Mr. Sabel’s career, he has represented a wide range of clients, including leading private equity firms, hedge funds, mezzanine funds, REITS and lenders in national commercial real estate acquisitions, dispositions, financings, joint ventures and development transactions. He has extensive experience in structuring complex joint venture agreement, tenant representation, negotiating and conducting legal due diligence in real estate transactions. Mr. Sabel earned a Bachelor of Arts from Cornell and a J.D. from Brooklyn Law School1.

Accounting, Audit, Tax Compliance

Mr. Nesi serves as DVO’s Acting Chief Financial Officer and is responsible for all of DVO’s accounting activities. Mr. Nesi has more than 25 years of public accounting experience as a tax partner with BDO, USA, serving a broad range of industries including real estate and private equity. As the global lead engagement tax partner for a Fortune 200 client, he was responsible for the global coordination and integration of all tax compliance and consulting services on a world-wide basis. Mr. Nesi is a published author in The Tax Advisor, The CPA Journal, and The Journal of Multistate Taxation and Incentives. He is a past chairman of the NYSS CPA’s Multi-State Tax Committee, as well as a member of the AICPA’s State and Local Tax Committee. Mr. Nesi received a B.A from New York University, an LLM in Tax from New York University and a J.D. from New England School of Law.

  • Sarah-Jayne Johnston

    Sarah-Jayne Johnston

    Assistant Vice President

  • Lucian Paone

    Lucian Paone, R.A.

    Vice President

Administration, Marketing & Investor Relations

Ms. Johnston oversees DVO’s administration, marketing and investor relations. Prior to joining DVO, Ms. Johnston has worked at television and film production, management consulting and technology companies. Ms. Johnston’s functional experience includes project management, administration and content production at RAW television in London, Walgreens Boots Alliance in New York and Grown Ocean in New York.

Ms. Johnston received her Masters Degree in Social Sciences and Anthropology from the University of Glasgow in Glasgow, Scotland and a Master’s Degree degree in Media Arts and Production form the University of Technology in Sydney, Australia.

Engineering & Construction

Mr. Paone is responsible for physical asset due diligence, renovation & maintenance oversight and administration of capital expenditure reserves. Mr. Paone brings more than 25 years of construction, engineering and architectural experience, including owner representation, development and architectural design work on projects ranging from multi-family residential, commercial and hospitality high-rise projects. Mr. Paone’s prior experience includes multifamily physical asset due diligence, tenant improvement and work letter oversight for office and retail assets, development of hotels and administration of capital expenditures for multifamily assets in over 20 States. Mr. Paone graduated Cum Laude from the Pratt Institute with a Five-year Bachelor of Architecture Degree and is a Registered Architect in New York.



Investment Commitee

The following are members of DVO's Investment Commitee.

  • Dr. Peter Linneman

    Dr. Peter Linneman

    Principal of Linneman Associates

  • Allan Edelson

    Allan Edelson

    Senior Vice President

Emiritus Professor of Real Estate

Dr. Peter Linneman is a Principal of Linneman Associates, KL Realty, and American Land Funds, and is the Albert Sussman Emeritus Professor of Real Estate, Finance, and Business Public Policy at the Wharton School of Business at the University of Pennsylvania. He was a member of Wharton's faculty for 32 years, founding Wharton's Real Estate Department and the Zell-Lurie Real Estate Center. He is the founding co-editor of The Wharton Real Estate Review and has published over 80 articles during his career. Dr. Linneman is widely recognized as a leading strategic thinker and investor, and has been cited as one of the 25 Most Influential People in Real Estate by Realtor Magazine, and one of the 100 Most Powerful People in New York Real Estate by the New York Observer. He is a highly sought-after speaker, appearing as the keynote speaker at numerous major industry conferences. Dr. Linneman, holds both Masters and Doctorate degrees in economics from the University of Chicago.

Walker & Dunlop

Mr. Edelson is a 28-year veteran of the commercial real estate industry and a 23-year veteran in multifamily real estate finance. He is currently a Managing Director with Walker & Dunlop and previously he spent just over 18 years with CWCapital and Deutsche Bank Berkshire Mortgage (DBBM). Over the past 23 years he has originated over $13.8 billion in loans. He is one of the few originators in the country that has originated more than $3 billion directly for both Fannie Mae and Freddie Mac. This loan volume was generated from approximately 773 mortgages. During his tenure, Mr. Edelson has been consistently one of the top loan generating originators nationally. Despite generating industry leading volume, the aggregate loan loss over his $13.8 billion in loans has been less than 2 bps per loan. This high volume and extremely low loan loss record over two decades provides an unparalleled track record in the Agency origination industry. Mr. Edelson’s areas of expertise include structured transactions, portfolio transactions, large one off loans, affordable housing, as well as, senior housing loans. He has proven himself to be an industry leader and innovator, as exemplified with his many firsts. He was the first individual to execute a DMBS loan and or a variable rate loan on a senior housing transaction. He was the first individual to structure a non-crossed facility. He was the first individual to design many features found in large structured deals. He was the first to implement the float to fix to float structure. He was the first individual to restructure a performing Freddie Mac loan from amortizing to interest only. Mr. Edelson has been successful at identifying arbitrage opportunities between the capital markets and the Agency loan programs in ways that consistently add value to his clients. This has earned him a loyal client base that returns time and again with their financing needs. Mr. Edelson holds a Bachelor of Science degree from the University of Maryland, where he graduated Magna Cum Laude and received his Master’s degree in Business Administration from Harvard University. Additionally, Mr. Edelson received his CPA designation from the State of Maryland.



Board of Advisors

The following are members of DVO's Advisory Board.

  • Jay Anderson

    Jay Anderson

    COO of The Feil Organization

  • Charles Manna

    Charles Manna

    Managing Director BOA

  • David Worley

    David Worley

    Partner of Priderock Capital Partners

Founding Partner of RCG Longview

Jay Anderson is Chief Operating Officer of The Feil Organization and a Founding Partner of RCG Longview. He has been, along with Mr. Feil, the lead investment professional of many of the Feil investments over the last 23 years. He has purchased over $2 billion of property during his 35-year tenure. Mr. Anderson also oversees the in-house financing, accounting and management at Feil. Prior to joining The Feil Organization, he spent four years in both the audit and tax departments at Deloitte Haskins and Sells, servicing such clients as Merrill Lynch and Rapid American Corporation. Prior to that, he worked in the finance department of W. R. Grace & Company’s Consumer Services Group. Mr. Anderson currently serves on the real estate advisory board of M&T Bank, is a trustee to the enCourage Kids Foundation and was a trustee of Kean University of the State of New Jersey. Mr. Anderson is a Certified Public Accountant and holds a Master’s degree in taxation and finance from New York University Stern School of Business. He earned his Bachelor’s degree in accounting at Brooklyn College.

Director at Bank of America Merrill Lynch

Charles Manna is managing Director at Bank of America Merrill Lynch. Previously he was a Managing Partner at G2 Investment Group. He was also a Managing Director at Lehman Brothers for 11 years.

Partner of Priderock Capital Partners (PRC)

PRC was founded to manage and generate above-average returns for third-party institutional and high net worth investors and to improve the local communities in which they acquire assets. The PRC senior management team has acquired and managed over 15,000 multi-family units and developed over 24,000 units in Arizona, California, Colorado, Florida, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Texas, Virginia and Washington DC. David Worley is the Chairman of FirstCity Bank of Commerce of North Palm Beach, FL. For 8 years he was Chief Risk Officer of the Multifamily Division of the Federal National Mortgage Association. He was formerly a Senior Executive in capital markets and financial services, with proven leadership skills and a long track record of achieving results. Mr. Worley graduated from the University of Texas at Austin.

DVO Prior Fund Track Record

DVO's prior fund incorporates 23 properties (5,134 units) in a nationwide real estate footprint of class B+ multifamily assets; DVO has invested nearly $120 million of gap equity in 23 properties, realizing a 26.7% net IRR to date. Please see Important Disclosure Statement.

DVO INVESTMENTS
UNITS
ACQ DATE
TOTAL CAPITAL
TOTAL EQUITY2
DVO EQUITY2
UNDERWRITTEN NET IRR6
UNDERWRITTEN NET EQUITY
SALE DATE
LP Transactions3 - Unrealized
LP Transactions3 - Unrealized
Track Record
PROPERTY
Haven at Charbonneau - Wilsonville, OR
UNITS
126
ACQ DATE
6/4/2015
TOTAL CAPITAL
$19,422,698
TOTAL EQUITY2
$6,622,698
DVO EQUITY2
$5,629,293
NET IRR6
11.7%
NET EQUITY
1.55x
SALE DATE
Track Record
PROPERTY
Lighthouse Apartments - Kent, WA
UNITS
76
ACQ DATE
7/31/2015
TOTAL CAPITAL
$12,670,150
TOTAL EQUITY2
$4,850,150
DVO EQUITY2
$4,122,627
NET IRR6
12.3%
NET EQUITY
1.54x
SALE DATE
Track Record
PROPERTY
Village at Lake Meridian - Kent, WA
UNITS
177
ACQ DATE
7/31/2015
TOTAL CAPITAL
$22,712,790
TOTAL EQUITY2
$9,047,201
DVO EQUITY2
$7,690,121
NET IRR6
16.4%
NET EQUITY
2.25x
SALE DATE
Track Record
PROPERTY
Alden - Tualitin, OR
UNITS
210
ACQ DATE
7/31/2015
TOTAL CAPITAL
$31,124,670
TOTAL EQUITY2
$9,844,670
DVO EQUITY2
$8,367,969
NET IRR6
16.7%
NET EQUITY
2.50x
SALE DATE
Track Record
PROPERTY
Santa Fe Ridge - Silverdale, WA
UNITS
240
ACQ DATE
1/29/2016
TOTAL CAPITAL
$44,188,528
TOTAL EQUITY2
$15,638,528
DVO EQUITY2
$13,292,749
NET IRR6
16.5%
NET EQUITY
1.98x
SALE DATE
Track Record
PROPERTY
Belbrooke Apartments - San Leandro, CA
UNITS
146
ACQ DATE
3/24/2017
TOTAL CAPITAL
$42,550,591
TOTAL EQUITY2
$11,550,591
DVO EQUITY2
$7,421,943
NET IRR6
13.8%
NET EQUITY
1.64x
SALE DATE
Track Record
PROPERTY
Cascade Park - Vancouver, WA
UNITS
166
ACQ DATE
6/15/2017
TOTAL CAPITAL
$31,290,000
TOTAL EQUITY2
$11,600,000
DVO EQUITY2
$9,860,000
NET IRR6
14.1%
NET EQUITY
1.57x
SALE DATE
Total DVO Gap Equity3
Total DVO Gap Equity3
UNITS
1,158
TOTAL CAPITAL
$203,959,427
TOTAL EQUITY2
$69,153,838
DVO EQUITY2
$56,384,702
NET IRR6
14.9%
NET EQUITY
1.90x
SALE DATE
Track Record
PROPERTY
Cypress Creek - Salinas, CA
UNITS
288
ACQ DATE
8/31/2015
TOTAL CAPITAL
$52,441,884
TOTAL EQUITY2
$15,551,884
DVO EQUITY2
$3,075,000
NET IRR6
18.5%
NET EQUITY
2.14x
SALE DATE
Track Record
PROPERTY
Tree Tops - Silverdale, WA
UNITS
270
ACQ DATE
12/31/2015
TOTAL CAPITAL
$46,951,796
TOTAL EQUITY2
$16,989,796
DVO EQUITY2
$1,000,000
NET IRR6
19.3%
NET EQUITY
2.10x
SALE DATE
Track Record
PROPERTY
Wyndhaven - Mesa, AZ
UNITS
248
ACQ DATE
12/31/2015
TOTAL CAPITAL
$33,214,024
TOTAL EQUITY2
$12,725,024
DVO EQUITY2
$318,459
NET IRR6
20.1%
NET EQUITY
2.22x
SALE DATE
Track Record
PROPERTY
Copper Hills - Henderson, NV
UNITS
272
ACQ DATE
12/31/2015
TOTAL CAPITAL
$35,029,000
TOTAL EQUITY2
$12,166,000
DVO EQUITY2
$262,786
NET IRR6
28.6%
NET EQUITY
2.94x
SALE DATE
Track Record
PROPERTY
Eaves at Trumbull - Trumbull, CT
UNITS
340
ACQ DATE
3/1/2016
TOTAL CAPITAL
$78,315,999
TOTAL EQUITY2
$20,430,000
DVO EQUITY2
$625,800
NET IRR6
19.4%
NET EQUITY
2.21x
SALE DATE
Track Record
PROPERTY
Crestone - Aurora, CO
UNITS
234
ACQ DATE
4/29/2016
TOTAL CAPITAL
$51,447,500
TOTAL EQUITY2
$16,682,500
DVO EQUITY2
$800,760
NET IRR6
21.4%
NET EQUITY
2.00x
SALE DATE
Track Record
PROPERTY
Silverdale Ridge - Silverdale, WA
UNITS
118
ACQ DATE
5/27/2016
TOTAL CAPITAL
$22,162,500
TOTAL EQUITY2
$7,125,000
DVO EQUITY2
$342,000
NET IRR6
15.1%
NET EQUITY
1.87x
SALE DATE
Track Record
PROPERTY
Ashgrove Place - Sacramento, CA
UNITS
208
ACQ DATE
8/25/2016
TOTAL CAPITAL
$42,624,013
TOTAL EQUITY2
$14,244,666
DVO EQUITY2
$458,808
NET IRR6
19.7%
NET EQUITY
2.21x
SALE DATE
Track Record
PROPERTY
Country Oaks - Santa Maria, CA
UNITS
208
ACQ DATE
9/8/2016
TOTAL CAPITAL
$42,601,000
TOTAL EQUITY2
$14,851,000
DVO EQUITY2
$589,272
NET IRR6
16.0%
NET EQUITY
1.95x
SALE DATE
Track Record
PROPERTY
Sunset Gardens - West Covina, CA
UNITS
200
ACQ DATE
9/13/2016
TOTAL CAPITAL
$48,255,000
TOTAL EQUITY2
$16,705,000
DVO EQUITY2
$360,828
NET IRR6
19.0%
NET EQUITY
2.20x
SALE DATE
Total DVO BCE III Joint Venture4
Total DVO BCE III Joint Venture4
UNITS
2,386
TOTAL CAPITAL
$453,042,715
TOTAL EQUITY2
$147,470,870
DVO EQUITY2
$7,833,713
NET IRR6
19.1%
NET EQUITY
2.14x
SALE DATE
Total Unrealized
Total Unrealized
UNITS
3,527
TOTAL CAPITAL
$657,002,142
TOTAL EQUITY2
$216,624,708
DVO EQUITY2
$64,218,415
NET IRR6
16.0%
NET EQUITY
2.07x
SALE DATE
REALIZED TRANSACTIONS
UNITS
ACQ DATE
TOTAL CAPITAL
TOTAL EQUITY2
DVO EQUITY2
REALIZED NET IRR5
REALIZED EQUITY MULTIPLE5
SALE DATE
Track Record
PROPERTY
Dean Street - Brooklyn, NY
UNITS
34
ACQ DATE
12/4/2012
TOTAL CAPITAL
$10,775,613
TOTAL EQUITY2
$3,775,613
DVO EQUITY2
$3,020,490
NET IRR6
23.5%
NET EQUITY
1.44x
SALE DATE
10/14 $14.5mm
Track Record
PROPERTY
Tamarac Village - Denver, CO
UNITS
564
ACQ DATE
3/28/2014
TOTAL CAPITAL
$63,891,782
TOTAL EQUITY2
$19,731,782
DVO EQUITY2
$16,772,015
NET IRR6
34.6%
NET EQUITY
1.61x
SALE DATE
11/15 $74mm
Track Record
PROPERTY
Sunterra Apartment - Oceanside, CA
UNITS
240
ACQ DATE
1/31/2014
TOTAL CAPITAL
$43,603,80
TOTAL EQUITY2
$12,623,806
DVO EQUITY2
$10,500,440
NET IRR6
27.5%
NET EQUITY
1.69x
SALE DATE
4/16 $54mm
Track Record
PROPERTY
Bristol Village - Aurora, CO
UNITS
240
ACQ DATE
4/30/2014
TOTAL CAPITAL
$38,235,000
TOTAL EQUITY2
$12,360,000
DVO EQUITY2
$10,506,000
NET IRR6
23.5%
NET EQUITY
1.63x
SALE DATE
11/16 $47.4mm
Track Record
PROPERTY
Portofino - Wilmington, CA
UNITS
200
ACQ DATE
6/27/2013
TOTAL CAPITAL
$53,604,944
TOTAL EQUITY2
$13,784,944
DVO EQUITY2
$4,135,483
NET IRR6
20.8%
NET EQUITY
1.76x
SALE DATE
2/17 $67.8mm
Track Record
PROPERTY
Somerset Apartments - Kent, WA
UNITS
329
ACQ DATE
6/4/2015
TOTAL CAPITAL
$46,572,790
TOTAL EQUITY2
$14,195,081
DVO EQUITY2
$12,065,819
NET IRR6
20.8%
NET EQUITY
1.35x
SALE DATE
4/17 49.7mm
Track Record
TOTAL REALIZED
UNITS
1,607
ACQ DATE
6/27/2013
TOTAL CAPITAL
$256,706,226
TOTAL EQUITY2
$76,471,226
DVO EQUITY2
$57,000,248
NET IRR6
26.7%
NET EQUITY
1.58x
PORTFOLIO TOTAL
5,134
$913,708,368
$293,095,935
$121,218,662
20.8%
1.76x

Notes

(1) As of 11/17/16
(2) Includes DVO and third party equity
(3) Projected returns calculated using Gap Equity Fund waterfall; including all fees and carried interest
(4) DVO equity represents co-investment GP capital in separate JV vehicle without subordination; Projected returns calculated using the Joint Venture’s waterfall structure.
(5) Realized returns calculated using Gap Equity Fund waterfall.
(6) As per original underwriting prior to deal closing.

DVO Access Fund LLC

The following DVO Access Fund LLC Documents are available to view:

  • Investor Document Package DVO Access Fund

    This document provides access to view the operating agreement, the subscription agreement and the PPM.

  • Wire Instructions

    Use these wire transfer instructions to send funds to secure your investment.

DVO Gap Equity Fund LLC Documents

The following DVO Fund Documents are available to view:

  • Executive Summary

    The executive summary provides an overview of DVO.

  • Presentation

    The Presentation provides an overview of DVO and investing in student housing and multifamily communities.

  • PPM

    The Private Placement Memorandum (PPM) for prospective investors for the DVO Fund.

DVO Access Fund LLC Terms

Investment Summary

Fund

DVO Access Fund LLC

Fund Managing Member

CV Manager LLC

Technology Fee

0.75% of the investment amount will be paid to CV Marketplace LLC ("CV Marketplace") for use of the website.

Administrative Expenses

The Fund will pay CV Manager $50,000 per annum for arranging for the audit, tax preparation, income distributions and certain other expenses.

Organizational Expenses

The Fund will pay CV Manager a one time fee of $75,000 for organizational expenses (which may include legal, travel, accounting, filing, and other expenses) incurred in connection with the formation of the Fund.

Initial Closing Amount

$2 million

DVO GAP Equity Fund LLC Terms

Investment Summary

Target Size

$150,000,000 Maximum Offering

Minimum Commitment

$2 million

Term

8 years

GP Investment

Minimum $2.5 million

Investment Period

3 years from initial closing

Target IRR

15% - 19% Gross IRR, 12% - 16% Net IRR to investors

Preferred Annual Return

9% Compounded Quarterly

Management Fee

1.0% on committed capital; 1.5% on invested capital

Catch-up

50/50 until GP receives 20% of the Preferred Return

Carried Interest

80% to LPs - 20% to GP

Distributions

Calculated on a portfolio basis. All distributions go towards the repayment of capital first, then to the Preferred Return, then the Catch-up, and finally to the Carried Interest

Investment Strategy

The Fund seeks to invest $2 - $15 million in value-added multifamily investments primarily located in top-tier growth markets, which include Northern California, Seattle, Southern California, Denver, Austin, Salt Lake City, Chicago, Boston, Portland, New York City, Washington DC

Important Disclosure Statement for DVO Fund:

This presentation and the information contained herein (the “Information”) is for your internal use only and shall be kept confidential, restricted and proprietary to DVO Real Estate, LLC (“DVO”). You confirm that you will treat all of the Information as confidential and will take all necessary precautions to maintain the confidentiality of the Information.

No portion of this presentation may be reproduced or used by or distributed to others, at any time, in whole or in part, for any other purpose without the prior written consent of DVO. Acceptance of this presentation by you constitutes an agreement to be bound by the foregoing terms. In allowing you to view the Information, DVO undertakes no obligation to provide any additional information or to update, or correct any inaccuracies that may exist in, any of the Information. DVO shall not have any liability to you or any other person resulting, directly or indirectly, from the disclosure of the Information to you. The Information is not to be distributed directly or indirectly to any person or entity who does not meet certain legal and professional criteria as an Accredited Investor. This Information is not intended to be distributed, and does not constitute an offer or solicitation in a jurisdiction to any person or entity to which it is unlawful to receive such documentation.

Nothing in this document shall constitute an offer of securities for sale in the United States or any other jurisdiction, or form the basis for any contract or commitment. If there should commence an offering of securities by DVO, any decision to invest in any such offer and to subscribe for or acquire such securities must be based wholly on the information contained in a Confidential Private Placement Memorandum (the “PPM”) issued in connection with any such offer, and not on the contents of this presentation. The PPM will contain material information that is not contained in this presentation, including a discussion of material risk factors that may cause you to lose all or a portion of your investment. If there is any inconsistency between the Information contained herein and the PPM, the PPM will prevail. Some Information contained in this presentation constitute “forward-looking statements”, and are based upon estimates, assumptions and expectations about future events or conditions.

Such forward-looking statements are intended only to illustrate hypothetical results under such assumptions, not all of which are described herein. Actual events or conditions may differ materially from those assumed in developing such forward-looking statements, including due to the risk factors described in the PPM. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary and the variations may be material. You should understand such assumptions and evaluate whether they are appropriate for your purposes. DVO undertakes no obligation to revise any forward-looking statements to reflect subsequent events or circumstances, and you should not place undue reliance on forward-looking statements. Furthermore, past performance of DVO or the real estate market generally (whether described in this presentation or otherwise) is not a guide to future performance of real estate investments.

This presentation contains case studies and refers to DVO’s calculations, estimates and projections, based on the strategy executed by DVO since 2012. Calculations and projections are based on assumptions in the model and include all fees and carried interest, which have been prepared for illustrative purposes only and are not a guide to future performance. Numerous assumptions were used in preparing the case studies, some of which may not be reflected herein. As such, no assurance can be given as to the accuracy, appropriateness or completeness of any particular case study, or whether they reflect current market conditions or future market performance. The case studies should not be construed as either projections or predictions of financial performance, or as legal, tax, financial or accounting advice. The specific characteristics of investments selected by DVO in the future may differ materially from those shown in the case studies.

Any investment in funds managed by DVO will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold, directly or indirectly, in or within the United States or to, or for the account or benefit of, any U.S. person, except pursuant to an exemption from or in a transaction not subject to the Securities Act and applicable U.S. state securities laws.

The Information and all information and opinions in it are the property of DVO. You may not use any portion of this Information except for your personal use, and you may not otherwise distribute any portion of this Information to a third party without the prior written authorization of DVO. DVO and the logo DVO are trademarks of DVO and you may not use any of the service mark, copyright or other notices (whether or not in this Information for any purpose, or alter, remove or otherwise obscure any of them without the written permission of DVO or any relevant third party owner.

Copyrights © 2018 All Rights Reserved by CityVest Capital Inc
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The information on this website does not constitute an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any investment or security described herein. Any such offer or solicitation shall be made only pursuant to the final confidential offering documents of any entity described on this website, which will contain information about each entity’s investment objectives and terms and conditions of an investment and may also describe certain risks and tax information related to an investment therein and which qualifies in its entirety the information set forth herein. The information contained herein does not constitute part of the offering documents of any entity. An investment in any investment included on this website, entails a high degree of risk (including the possible loss of a substantial part, or even the entire amount, of an investment) and no assurance can be given that any entity’s investment objectives will be achieved or that investors will receive a return of their capital. Past returns are not indicative of future performance.

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Value Add

Risk of Loss
Medium 1
Leverage
60-75% 2
Occupancy Rate
Less than 80% 2
Strategy
Heavy Renovations​/Major Retenanting 2
Stable Tenants
Few​/None 2
Hold Period
1-3 Years 2

1 The Risk of Loss is relative to other investment profiles. There is always a risk of total loss.

2 These are typical attributes for this profile of investment and may or may not represent this particular investment.

Multi-Family

Multi-family investments are apartment communities with more than four units. So long as there are people, there will be a need for housing. As the population grows, demand for housing will increase as well.

Target Return (IRR)

The estimated annual return which includes both the annual cashflow and the sale proceeds.

Target Annual Cash

The estimated average percentage annual cash return from the investment.

Estimated Hold

Estimated hold period from investment to realization.

Preferred Return

The preferred return or “pref” is a percentage cumulative return on initial investment that investors must attain prior to the investment manager’s participation in the profits.

Fund Size

ApexOne Fund is raising a maximum of $100,000,000