Multifamily
Majestic Bay - Preferred Equity
Seattle MSA, WA
Open to Invest
Majestic Bay - Preferred Equity
Seattle MSA, WA
All Investments > Majestic Bay - Preferred Equity
Overview
Majestic Bay - Preferred Equity
Majestic Bay is an 81-unit multifamily community located in the Seattle, WA MSA. The Sponsor is issuing priority equity shares to fund revenue enhancing renovations.
Videos
Details
For more information, view the Sponsor's Investment Memorandum.
Estimated First Distribution
6/2025
Minimum Investment
25000
Estimated Hold Period
5 Years
Investment Strategy
Value-Add
Investment Type
Equity
Sponsor Documents
The offering documents above have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
Deal Highlights
Priority Equity Shares: New Standard Equities (“NSE”) is issuing priority equity shares to fund revenue-enhancing renovations at Majestic Bay. The Property was originally acquired in August of 2019. The Property was purchased at a price of $18,000,000 ($222,222/Unit) and is valued at $21,000,000 today ($259,259/unit). On July 31, 2024, the Property was refinanced with a $13,036,000 five-year, fixed-rate Freddie Mac loan with a leverage level of 62.1% loan to value. In conjunction with the new loan closing, NSE raised $2,900,000 of priority equity. NSE is now looking to issue up to $1,600,000 of additional priority equity in a new class of shares to fund additional renovations at the Property.
Experienced, Repeat Sponsor: New Standard Equities (NSE) has a strong track record, with $741 million in AUM spanning approximately 2,000 multifamily units in major markets throughout the Western U.S. Their vertically integrated management platform oversees property, asset, and construction management, offering efficiency in project execution.
Prime Location: Majestic Bay is in Des Moines, Washington, a suburb of Seattle. The Property is 4.8 mi away from the newly built 1.6 million SF Des Moines Business Center with tenants including FAA and Amerisource Bergen. Other nearby employers include Alaska Airlines, SeaTac, Amazon, and Boeing. Additionally, it's near significant infrastructure improvements, including the future Kent Des Moines light rail station, boosting accessibility and appeal to residents.
Value-Add Opportunity: The Property offers potential upside through planned renovations. Out of 81 units, 29 are still in their original condition. Planned interior upgrades include quartz countertops, new cabinetry, flooring, lighting, and appliances. Exterior enhancements include hallway improvements, elevator upgrades, controlled access, and package lockers.
Rent Growth Potential: Completed renovations on 52 units have already delivered average rental premiums of $291 or 16.3%. With planned improvements, rents are expected to rise to an average of $2,383 per month.
Attractive Cost Basis: The Property’s refinanced basis of $231 per square foot compares favorably to regional sales comparables, which average $305 per square foot. This provides investors with a cushion and potential for appreciation.
Favorable Unit Mix: The Property offers nine one-bedroom units and 72 two-bedroom units, 58 of which are townhomes catering to singles, couples, and families. The units average 1,122 square feet, making them some of the largest in the submarket.
Contact Us
Questions before investing?
Speak with our Investor Relations team.
Management
For more information, view the Sponsor's Investment Memorandum.
New Standard Equities
New Standard Equities is a real estate investment & asset management firm that specializes in the acquisition and operations of multifamily properties located throughout the Western U.S. The Firm is vertically integrated with in-house construction and property management capabilities. Founded in 2010 and privately held, NSE utilizes a consistent investment philosophy, hands-on management, and focused capital improvement programs to execute its value-creation strategies. Since inception, the Firm has assembled a portfolio of institutional-quality assets generating attractive risk-adjusted returns on behalf of its investors. Led by Founder and Chief Executive Officer Edward (Eddie) Ring, the Sponsor’s leadership team (the “Leadership Team”) also includes Julie Blank (Chief Operating Officer) and Daniel Byrd (Senior Vice President of Construction Management), each of whom has the breadth of experience and complementary skills in acquisitions, construction, property management and financial reporting needed to successfully invest in the multifamily sector. The Leadership Team is further supported by 20+ corporate professionals and over 40 site level personnel.
Management Team
Financials
For more information, view the Sponsor's Investment Memorandum.
Sources & Uses
| Sources of Funds | Amount |
|---|---|
| Priority Equity | $4,500,000 |
| Freddie Mac Senior Loan | $13,036,000 |
| Total Sources | $17,536,000 |
| Uses of Funds | Amount |
| Existing Debt Payoff | $15,403,959 |
| Planned Capital Improvements | $636,967 |
| Estimated Closing Costs(1) | $661,624 |
| Internal Loan Payoff/AP | $582,612 |
| NSE Financing Fee | $97,770 |
| Insurance/Tax Escrow Deposits | $153,068 |
| Total Uses | $17,536,000 |
(1) Includes fees paid to RM Securities, LLC and RM Technologies, LLC. For more information, please see the Fees and Disclosures sections.
Debt Assumptions
As of July 31st, 2024, the Sponsor has financed the Property with a loan with the below terms.
- Lender: Freddie Mac
- Initial Proceeds: $13,036,000
- Future Loan Proceeds: $0
- Total Loan Proceeds: $13,036,000
- Fixed/Floating: Fixed
- Index (5-year Treasury): 4.42%
- Spread: 1.22%
- All-In Rate: 5.64%
- Term: 5 years
- Extensions: N/A
- Interest Only: 24 Months
- Interest Only Payment: $735,230
- Amortization: 420 months
- Principal and Interest Payment: $854,466
- Maturity Date: 8/1/2029
- Lockout: N/A
- Prepayment Fee: Yield Maintenance or Defeasance. N/A within three months of maturity.
- Lender Origination Fee: $13,036
- JLL Origination Fee: $130,360
- Rate Buydown Fee: $260,720
(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclosures section below for additional information concerning the Sponsors use of debt.
Distributions
The priority equity shares will be one of two classes. The first class is made up of the priority equity raised outside of the RealtyMogul Platform and those investors will be referred to as “Non-RM Priority Investors.” The second class is the class being presented in this offering. This second class of priority equity investors will be referred to as “RM Priority Investors” and is on substantially the same terms as the Non-RM Priority Investors with certain adjustments for platform-specific fees and other arrangements. Together, the RM Priority Investors and Non-RM Priority Investors will make up the “priority equity members.”
The actual first distribution date is dependent on available funds and the closing date for investors.
Distributions from Net Cash Flow
Distributions of net cash flow from the Property under Majestic Bay Investors, LLC will be made to the Company as follows:
- To RM-Priority Investors and Non-RM Priority Investors in accordance with their Percentage Interests until each member has received its 8% cash on cash return on its equity contributions (for RM Priority Investors only, net of the 1% ongoing licensing and administrative solution fee); then
- To the original equity members in accordance with their Percentage Interests until each member has received its 8% cash on cash return; then
- To RM-Priority Investors and Non-RM Priority Investors in accordance with their Percentage Interests until each member has received a 15% cash on cash return (for RM Priority Investors only, net of the 1% ongoing licensing and administrative solution fee); then
- To the original equity members in accordance with their Percentage Interests until each has received its 8% preferred return; then
- To the original equity members in accordance with their Percentage Interests until each has received a return of its capital contribution; then
- To the original equity members and the Manager, in the following proportion: (A) 77.78% to all members in accordance with their respective Percentage Interests and (B) 22.22% to the Manager, until each member has achieved an Internal Rate of Return equal to fifteen percent (15%); and
- Thereafter, to the original equity members and the Manager, in the following proportion: (A) 66.67% to all members in accordance with their respective Percentage Interests, and (B) 33.33% to the Manager.
Any unpaid cash on cash return due to priority equity members will be added to their equity balance annually. The definitive documents will include standard protective provisions for the priority equity distributions.
For the avoidance of doubt, cash on cash is calculated by taking distributions and dividing it by the equity balance annually.
Distributions of Net Proceeds
Distributions of net proceeds from the refinance or sale of the Property under Majestic Bay Investors, LLC will be made to the Company as follows:
- To RM-Priority Investors and Non-RM Priority Investors in accordance with their Percentage Interests until each member has received its 15% return (for RM Priority Investors only, net of the 1% ongoing licensing and administrative solution fee), including a return of principal (for RM Priority Investors only, net of the 1% ongoing licensing and administrative solution fee); then
- To the original equity members in accordance with their Percentage Interests until each has received its 8% preferred return; then
- To the original equity members in accordance with their Percentage Interests until each has received a return of its capital contribution; then
- To the original equity members and the Manager, in the following proportion: (A) 77.78% to all members in accordance with their respective Percentage Interests and (B) 22.22% to the Manager, until each member has achieved an Internal Rate of Return equal to fifteen percent (15%); and
- Thereafter, to the original equity members and the Manager, in the following proportion: (A) 66.67% to all members in accordance with their respective Percentage Interests, and (B) 33.33% to the Manager.
Any unpaid cash on cash return due to priority equity members will be added to their equity balance annually. The definitive documents will include standard protective provisions for the priority equity distributions.
Fees
You will pay certain fees and compensation over the life of the transaction; please refer to New Standard Equities' materials for details. The following fees and compensation will be paid(1)(2):
One-Time Fees:
| Type of Fee | Amount of Fee | Received By | Paid From |
|---|---|---|---|
| Financing Fee | 0.75% of Total Senior Loan Proceeds | Sponsor | Loan Proceeds |
| Construction Management Fee | 5.0% of Hard and Soft Improvement Costs | Sponsor | Capitalized Equity Contribution |
| Platform Fee | Flat One-Time Fee of $15,000 | RM Securities, LLC | Capitalized Equity Contribution |
| Placement Fee2 | 5% of RM Priority Investors’ Initial Priority Capital Contribution, and reimbursement to RM Securities of certain fees and expenses | RM Securities, LLC | Capitalized Equity Contribution |
Recurring Fees:
| Type of Fee | Amount of Fee | Received By | Paid From |
|---|---|---|---|
| Property Management Fee | 4.0% of Effective Gross Income | Sponsor | Cash Flow |
| Administration Solution Licensing Fee2 | 1.00% per annum of the aggregate capital contributions of the RM platform investor for whom RM Technologies provides the Administration Solution. | RM Securities, LLC | Cash Flow / Capitalized Equity Contribution |
(1) Fees may be deferred to reduce impact to investor distributions.
(2) For more information on the fees paid to RM Securities and its affiliates or any other fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
Disclosures
RM Securities, LLC and its Affiliates Compensation
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLC
Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment Documents
The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of Investment
This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor Assumptions
Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past Performance
Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of Debt
A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not Registered
Sponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment Advice
Nothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLC
Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment Documents
The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of Investment
This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor Assumptions
Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past Performance
Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of Debt
A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not Registered
Sponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment Advice
Nothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.