The Ferry Street Project

Min. Invest $100,000
Target Hold 120 mo
Annualized Returns 14%
Progress - 0% Pledged
b5 rendering.PNG

The Ferry Street Project Summary

The Ferry Street Project is a historic textile mill complex located at 1 Ferry Street, Easthampton, Massachusetts. Originally developed in the 1800’s for use as a textile mill, it has since been abandoned and is sitting dormant. The site is currently home to six blighted brick masonry structures that total approximately 380,000 square feet. Situated on 7.1 acres in the Lower Mill Pond area in Easth-ampton, the structures command views of Mill Pond, the Mount Tom Mountain Range and a unique canal which runs between the buildings. Left unattended for some time, the buildings are in de-cline and in need of redevelopment. The complex is located in an Opportunity Zone.

Investment Type: Term: Raise Amount: Targeted ROI: IRR:
Equity
25/75 Waterfall Participation
120 Months $7,700,000 14.37% 11.28%

Property Summary

Building 5 has 66,000 gross square feet with approximately 50,000 of that rentable. The building will be divided into 32 residential units ranging from 800 –1,800 square feet, with an average unit size of 1,100 square feet and 1 commercial unit. The buildout will include a fitness area, juice bar, and function area.

Why Invest?

  1. Opportunity Zone investment designation
  2. Surrounded by 5 universities
  3. The community is on board with the project and has been working with us since the beginning
  4. The developer knows the area well and currently manages a building around the corner from this site
  5. The state is providing the city of Easthampton, MA with a $3.5M MassWorks infrastructure grant

Financial Summary

Building 5 of the Ferry Street property is being purchased.  The purchase price allocated to this property is $200,000.  The total project size for this building is $7.7M with $5.8M of construction and $1.4M of soft costs.  The project will be close to 70% LTV with the equity partners making up the 30%.  There is a tiered waterfall for returns after the 4% yearly preferred dividend.

Financial Sources

Bank Loan $5,500,000
Investor Equity $2,200,000

Financial Uses

Land $200,000
Construction $5,800,000
Soft Costs $1,400,000
Interest Reserve $300,000

Profit Split

Investor Return Summary

4% Yearly Preferred Return  $1,320,000
Profit on Sale  $3,300,000
Total Investor Profit  $4,620,000
Annualized ROI  14.37%
Equity Multiple  3.17x
 
 

Investor Return Waterfall, Based on Project Performance

 

4% preferred return   

7.5% IRR Lookback Tier 75% Equity Partner

25% GP 
10.0% IRR Lookback Tier 50% Equity Partner 50% GP 
15.0% IRR Lookback Tier 40% Equity Partner 

60% GP 

Residual (above 15%.0%) 25% Equity Partner 75% GP

*The summary is based on the projection of the project making a 11.28% IRR

Documentation


Easthampton, MA Demographics

The city of Easthampton, Massachusetts is in Hampshire county about 15-20 minutes north of Springfield, MA.  Easthampton is known for its outdoors community, picturesque landscape, and strong ties into the 5 local universities within a 15 minute drive.  The town has a population of 16,322 residents with an average median income of $61,870.  The median home value for the town is approximately $250,000 with an average rent for a two bedroom unit of $1,900/month.

As the universities in the immediate area continue to expand their student base and continue to sprawl outwards, Easthampton is well positioned to accept the new influx of not only undergraduate students, but graduate students and any university employees who are moving into the area as it is a more affordable option for residents.  

If you are looking for a beautiful place to live in a brand new loft community with some great character, look no farther than Ferry Street.