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RiverOak invested $3.9 million in a new 170-unit townhouse development on Camp Avenue in Stamford, CT. The award-winning developer, RMS Construction Inc, also recently completed the construction and sale of a 60-unit project of similar style and price also in Stamford. Pre-construction buyer interest for the project has been exceptionally strong, with well over 50% of the units pre-sold before construction began.

Our investment is on a preferred equity basis, with an anticipated IRR of approximately 24%. RMS Construction is a full service construction and real estate development company headquartered in Stamford. RMS has specialized in providing high-quality yet affordable units to meet the increasing demand for affordable housing in the area and has been extremely successful in this niche.

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170 Unit Townhouse (Fund III)

Pickwick Plaza is a premier, 4-building, suburban office complex totaling 238,000 square feet at the top of Greenwich Avenue in Greenwich, Connecticut. The property is located in the heart of downtown Greenwich and has immediate access to many fine shops and restaurants. Pickwick Plaza is the "100%" location for such tenants as Morgan Stanley, US Trust Company, Merrill Lynch and Deutsche Bank, all of whom provide broad based wealth and money management services.

The property is 100% leased and currently has an average in-place rental rate that is 30% below market. Recent, post-9/11 leases that have been signed at the property have averaged $68.00 per square foot. The managing partners, Broadway Partners and The Landis Group are very familiar to RiverOak, having successfully leased and refinanced 400 Atlantic Street in Stamford, CT, in which RiverOak's Fund I was an investor.

The acquisition price for Pickwick was $115 million and the property closed in June of 2002. RiverOak has an "unpromoted" equity position in the deal.

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Pickwick Plaza (Fund II) (Closed)

This property has provided RiverOak the opportunity to participate on a preferred equity basis in a brand new apartment development in Groton, CT. This was the first new project built in this market in 14 years. The current vacancy rate was only 5% at a time when the two Indian casinos had recently expanded, Pfizer had just completed their new research headquarters, and Electric Boat was expected to receive new government contracts. The developer, GRP of Stamford, CT had done a very thorough job of planning this development. Trammell Crow began marketing the first units in early 2003.

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The Ledges
339 Unit Apartment Complex (Fund I, II ) (Closed)

The central business district of Stamford, CT is the home of 400 Atlantic Street; a 500,000 square foot, 15-story, Class-A office building. The building was built in 1980 as the home of Champion Paper Company. International Paper Company acquired Champion in early 2000 and decided to sell the asset while remaining the lead tenant. When RiverOak and its partners, Broadway Partners and The Landis Group, acquired the property in late 2000, International Paper agreed to occupy floors 12-15, leaving the building 45% vacant. This vacancy represented an enormous opportunity for RiverOak and its investors. All available space was rented in 2001, to solid credit tenants including American Express and Abbey National Bank. The building was refinanced in January of 2002, returning nearly twice the investors' initial equity. The property is ideally located one block from both I-95 and the Stamford Town Center Mall and two blocks from the Stamford Metro-North train station.

Acquisition price was $105 million and the transaction closed on December 28, 2000. RiverOak had a "promoted" equity position in the deal.

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400 Atlantic Street (Fund I) (Closed)

Parker's Glen is a 5-lot cul-de-sac, with each lot approved for a 6-bedroom home, in New Canaan, CT.  This is RiverOak's second investment with Palmer Design, LLC, a high-end builder who works only in New Canaan.  Of the five 2-acre home sites, three are being sold to other builders and Palmer will build on the other two.  RiverOak has its equity invested with a 25% preference and a profit participation thereafter.  RiverOak anticipates a 35% IRR from this project.  The five homes on the site will run approximately 8,000 SF on two floors and four of the lots will have partial views of the Long Island Sound from the 2nd floor.

RiverOak and Palmer decided to sell three of the five lots before the road was put in.  Both partners agreed that while an early sell out might end up foregoing some profit in the land, there was more value in reducing the acquisition debt to zero and shortening the life cycle of the project to take advantage of the current market conditions in New Canaan to the fullest extent.

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Parker's Glen (Fund III)

RiverOak's Fund II and Fund III have each invested $1,000,000 in Redbrick II, LP as an unpromoted investor limited partner. RiverOak projects an IRR to its Fund(s) of22-23%. Redbrick II, LP is a fund that purchases single-family units, both homes and condominiums, in blue-collar urban northeast locations such as Bridgeport and Waterbury, CT and Trenton and Jersey City, NJ. The unit purchases are vetted through a proprietary multi­variable equation that takes into account historical rental rates, employment rates, demographic trends and many other macro-economic factors. The sponsors and operators of Redbrick have an MIT Real Estate Institute background, which accounts, in part, for the mathematical discipline of the Fund.

RiverOak decided to invest in Redbrick's second Fund for two reasons;

1) The performance of Redbrick's first Fund which has returns to investors approaching a 30% IRR;

2) The opportunity to further diversify within the housing asset class into a less expensive and less volatile housing category;

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Redbrick Partners (Fund II, III )

Skyview Lane was a single family new home immediately next to a home that RiverOak financed with Palmer Design in Fund II.  That first home sold in early 2004 for 2.9 mm and has since been re-sold at 3.25 mm.  Palmer Design, LLC is a specialty new home construction company building homes only in New Canaan, CT.  This $650,000 investment was made by RiverOak in April of 2005.  The home was built and the home sold and closed in April of 2007.  RiverOak earned an IRR of 31.3% on this transaction.

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Westport Corporate View (WCV) is an 80,609 square foot Class A two-building office complex in downtown Westport, Connecticut. Each building has two levels of covered parking. WCV is situated at the highly visible intersection of Post Road (Route 1) and Wilton Road (Route 33) and provides east and south views of the Saugatuck River.

At the property level, in-place rents average $28.00 per SF, which is approximately $4.00 to $7.00 per SF below market. Almost half of the building's square footage comes up for renewal between 2008 and 2009. At present, there is very little vacancy in the Class A market in Westport. The partnership "locked-in" a 7-year assumable loan at a 5.09% fixed rate. If interest rates rise, the mortgage will become a marketable asset to the overall deal.

RiverOak's common equity investment is being made in joint venture with Prescott Capital Management, LLC of New York City and Onyx Equities, LLC of New Jersey. Onyx will act as the operating partner.

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Westport Corporate View (Fund III)

199 State Street is located on the Rose Kennedy Greenway. The Rose Kennedy Greenway is a brand new park that was created when the Central Artery, with the majority of north/south automotive traffic, was moved underground as it went through downtown Boston in a project widely known as the "Big Dig".

The property will consist of 12 residential half floors, some of which may be combined into 3000+ square foot apartments. The property is located one block from the Faneuil Hall shopping area. All of the 199 State Street condominiums face towards Boston Harbor and have partial Harbor views. When RiverOak invested in this property, 4 of the units were pre-sold.

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199 State Street (Fund II, III)

Sheffield Office Park was an unusual opportunity for RiverOak to participate on the "sponsor's side of the deal". This means that beside our pro-rata share in the deal we also own 28% of the sponsor's carried interest. Sheffield is a 3-building, 517,146 square foot office complex in the Detroit suburb of Troy, Michigan. The property sits on a 28.2-acre campus adjacent to the former K-Mart world headquarters and the Somerset Collection Mall. It also borders the high-end executive community of Bloomfield Hills.

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Sheffield Office Park (Fund I)

Allaire is a 12.92-acre development parcel that was purchased from a New Jersey utility company. The property is zoned commercial and is permitted for 108,000 square feet in two flex office/warehouse buildings.

In partnership with Bollerman Development Corporation of Red Bank, New Jersey, two build-to-suits installations were completed totaling 108,000 square feet. These buildings complete the site. In addition, the partnership owned an option on an adjacent 15-acre parcel.

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Allaire Corporate Campus (Fund I) (Closed)

Pinnacle Communities, LLC is a multi-disciplinary home builder who is based in Milburn, NJ. RiverOak has invested $2.7 mm with the luxury custom home division of Pinnacle. To increase the speed in which Pinnacle Custom can respond to opportunities, Pinnacle sought financing that did not have to be raised on a deal-by-deal basis. RiverOak has invested preferred equity in a holding company designed to fund the equity for 2 Pinnacle Custom homes over the next 2 years. The first tranche of $1.35 mm was funded in January 2005 to finance the construction of a 12,000 SF home in Upper Saddle River, NJ, a New York City suburb that is one of the most affluent towns in the United States. RiverOak anticipates a 25.5% IRR on invested funds over a 2-year period.

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Pinnacle Communities, LLC (Fund III)

Fairfield 80 is an existing 108,519 square foot office building in Fairfield, NJ (aka “Fairfield 80”) built in 1990. The property has excellent visibility from I-80 and has immediate access from Exit 52 off I-80. Presently the Property is 71.3% leased which includes leases with Aetna Life Insurance Company (“Aetna”), one of the nation’s leaders in health care insurance; Cover-All Technologies, a primary software developer for the property/casualty insurance industry; PrimePay, a leader in the payroll and outsourced human resources industry; and Countrywide Commercial Mortgage Lenders.

The purchase price is $13.3 million or $123/SF which is significantly below replacement cost. Total acquisition cost is estimated to be $13.85 million and total capitalization, including tenant improvements and leasing commissions is $16.16 million. Fund IV will invest approximately $3.0 million or 85% of the required equity. The sponsoring partner is the Cofinance Group who will invest the remaining 15% and will manage the property on a day-to-day basis. The Cofinance chief operating officer is Jim Maurer who is well known to RiverOak. Mr. Maurer worked for Steve DeNardo for 5 years in the 1990’s at both MONY and ING. We have underwritten returns to the Fund of about 22% over a 3-5 year hold period and an investment multiple of 1.6x-2.0x.

Fairfield 80 is situated in an improving leasing market, ultimately driven by the very tight leasing market in New York City. The value opportunity in this project resides in the lease up of the project and an improvement in the net operating income. To this end, we already have a lease out for negotiation for 14,000 SF with a globally recognized name brand tenant. At the same time we are in preliminary negotiations with another tenant for 12,000 SF.

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The Modern is a new ground-up condominium development in Williamsburg, Brooklyn. The building includes 9 residences with a projected average price per square foot of approximately $800 which represents a very competitive value proposition in the Williamsburg market, particularly with Manhattan prices averaging over $1000 per square foot.

The investment’s value is in its superior location within the Williamsburg section of Brooklyn; one block off Bedford Street and literally right at the subway station just moments from Manhattan. The area has been dubbed the “New Soho” because of its modern galleries, chic boutiques, trendy restaurants and lively night spots. The sleek modern architectural design is intended to differentiate the building from other small condo buildings in the area. Affordable pricing, distinctive design and spectacular location combine to create a very attractive development opportunity. RiverOak Fund III owns a preferred equity position with an expected IRR of over 25%.

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The Modern - Williamsburg, Brooklyn (Fund III)

This property gave RiverOak the opportunity to participate on a preferred equity basis in a commercial loft conversion in the very tight West Harlem market. This property was targeted for nonprofit corporations, which is the major commercial activity in this neighborhood. Vacancy for this type of space is less than 7%. The building is an 8-story, 50,500 square foot brick and concrete structure that was a former commercial laundry. The property was 50% pre-leased at closing. Commerce Bank of New York provided $5 million in construction financing. RiverOak invested $1.5 million for an 18-month period.

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140 West 124th Street (Fund II) (Closed)

Hartsdale is a 3-story, 45,284 square foot office building on 3.875 acres. The building was built in 1938 as a public school, The Webb School. It was converted in 1986 to an office building, and underwent a complete $4 million renovation. In 1987 the building won the prestigious Building Owners and Managers Association "Historic Building of the Year" award. Under our partnership's ownership, the building lobby and elevator had been renovated and the hallways had been refurbished. The building had steadily maintained a 98% rate of occupancy. Our partner in this transaction was Broadway Partners of New York City. We closed on this investment in August of 2000.

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200 Central Park Avenue (Fund I) (Closed)

Saxon Woods is a two building complex of 5 stories each, totaling 236,000 square feet on 15 acres in Harrison, New York. Harrison is located in the eastern end of the White Plains/Westchester County, New York market. The properties are strategically located at the intersection of Exit 23 of the Hutchinson River Parkway and Mamaroneck Avenue. With Route I-287 two miles to the north and Route I-95 one mile to the east, Saxon Woods enjoys convenient access to all major roadways in the area.

When the properties were purchased in August 2001, the Harrison sub-market encompassed 2.1 million square feet and had a vacancy rate of approximately 2%. The market had experienced no significant speculative building for ten years. Despite the general condition of the economy in August 2001, the mid and long term picture for the property were driven by the excellent location, solid transportation infrastructure and the lack of new office space supply. Significant tenants in the complex included Allstate, S & P, and Icon. Our partners in this deal were Broadway Partners, Antares and an affiliate of The Landis Group. RiverOak had a "promoted" equity position in this investment.

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Saxon Woods Corporate Center (Fund I) (Closed)

Velocity at Greystone Apartments on Warburton Avenue is a fully approved 79-unit rental apartment development located at 1077 Warburton Avenue in the City of Yonkers, New York. The site comprises .45 acres and 19,834 square feet. The community will be knows as “Velocity at Greystone”. Velocity at Greystone will feature a mix of studio, one, two and three-bedroom apartments ranging in size from 448 square feet to 997 square feet. The units will spread over a nine-story mid-rise building. Each floor plate will be 7,905 square feet and will have between 8-10 units. The building will be of concrete construction and provide enclosed parking.  A typical unit within Velocity at Greystone will have wooden floors, granite countertops, stainless steel appliances, cable and WIFI capabilities. In addition, the building will also have a fitness center and laundry facilities.

The property is situated on the west side of Warburton Avenue, a major north/south road along the Hudson River, linking Yonkers and Hastings-On-Hudson, and possesses unobstructed views of the Hudson River, the New Jersey Palisades and The George Washington Bridge. The site is also adjacent to the newly renovated Greystone Metro North Train Station, which provides service to Grand Central Station in less than 25 minutes.

RiverOak invested $3.255 mm in the project.  The investment time horizon is between 4-6 years and the projected IRR to Fund IV is over 24%.  The sponsor of the project is the REMI Companies, a successful developer/owner located in Hoboken, NJ.  

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