Investor Returns
Based on a conservative 85% stabilized occupancy. Principal returned in 3–5 years via refinancing.
| Distribution tier | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 |
|---|---|---|---|---|---|---|---|---|
| Equity Contribution | ($13,211) | ($746) | — | — | — | — | — | — |
| Tier 1 — 10% Preferred Return | $18,464 | $82,903 | $127,595 | $129,278 | $52,988 | — | — | — |
| Tier 2 — Excess CF to 18% IRR | — | — | — | — | $64,555 | $107,744 | $77,387 | — |
| Tier 3 — Excess CF to 22% IRR | — | — | — | — | — | — | $19,937 | $274,260 |
| Tier 4 — Excess CF | — | — | — | — | — | — | — | $633,358 |
| TOTAL Net Cash Flow | $5,253 | $82,157 | $127,595 | $129,278 | $117,543 | $107,744 | $97,324 | $907,618 |
Closing year: ($236,043) initial contribution. Years 1–2: $0 (construction). Projected IRR: 27.3%. Note: OZ investors may retain a portion of funds to maximize tax benefits — verify with a QOZ tax attorney.
LP investors receive preferential treatment at every tier.
The GP earns meaningful carry only after LPs receive their full preferred return and capital back.
| Tier | IRR threshold | LP split | GP split |
|---|---|---|---|
| Tier 1 | 10% Preferred Return | 90% | 10% |
| Tier 2 | Up to 18% IRR | 70% | 30% |
| Tier 3 | Up to 22% IRR | 50% | 50% |
| Tier 4 | Above 22% IRR | 35% | 65% |
| Source | Amount |
|---|---|
| Construction Loan (committed) | $44,400,000 |
| LP Equity (this offering) | $12,000,000 |
| Total Sources | $56,400,000 |
| Use of funds | Amount |
|---|---|
| Land Loan & Equity | $16,600,000 |
| Construction Hard & Soft Costs | $30,000,000 |
| Furniture, Fixtures & Equipment | $460,000 |
| Management, Consulting & Permits | $640,000 |
| Interest Reserve | $6,700,000 |
| Working Capital & Start-Up Costs | $2,000,000 |
| Total Uses | $56,400,000 |
Emerald Park's exit optionality provides multiple buyer categories and a clear refinancing pathway that returns investor capital early — without requiring a full sale.
Upon reaching 50%+ occupancy, the project pursues permanent non-recourse financing through agencies such as Freddie Mac, Fannie Mae, or HUD to repay LP investors and the construction loan — the primary mechanism for returning capital in Years 3–5.
Healthcare REITs are actively raising capital to acquire stabilized senior housing. At Emerald Park, generating $12M+ in annual NOI at a 9% cap rate implies a $130M+ institutional asset — an attractive acquisition target at stabilization.
The campus is highly attractive to senior healthcare operators and hospital systems seeking scale in Northern California. No comparable ALW-licensed facility of this scale exists in the Bay Area today.
