6 Landmark Square | Fourth Floor | Stamford, CT 06901
FREQUENTLY ASKED QUESTIONS
FREQUENTLY ASKED QUESTIONS
Q. What is Northeast Opportunity One, LLC?
A. We are a Connecticut Limited Liability Company in Organization, created to invest in under valued and distressed real estate.
Q. What is the Investment and Project?
A. We are acquiring in a Class A Commercial property in a prime location. The property will be operated as a business center (shared office space with services) also known as flexible office space. Investors will receive separate cash flows from both the real estate and business.
Q. What is the projected return on Investment?
A. This Real Estate will be leased to the Business Center on a triple net lease. The lease provides a 7.5% return on investment in the 2nd year increasing to a projected 14.5% after the 5th year.
The Business Center and Real Estate have a projected combined return on investment of 11.7% in year 2 and 21.0% in year 5.
Q. What is Class A office property?
A. Office buildings are classified as Class A, B and C properties in relationship to other office buildings in their surrounding locations. Class A Office buildings are the newest, most modern and best equipped buildings in their community.
Q. Why do we like the Real Estate segment of this Project?
a. The real estate is a Class A commercial property in a prime location.
b. The property is located in an area which has not fully recovered from the market crash of 2007. It is being acquired at a fraction of its original purchase price and at a fraction of its replacement costs.
c. The area appears to be at the start of a turn around. Two multi million dollar renovation projects have recently been completed within a block of the property and a third project is about to be started.
d. The property is located in an Opportunity Zone which can allow substantial tax advantages.
Q. Why do we like the Business Center segment of this Project?
a. Business Centers or Flex Office Space represents one of the fastest growing and most profitable segments of the Office real estate market.
b. Flex Office Space generates income from multiple sources, not just office rentals.
Q. What will be my ownership interest in the Company?
A. Investors will receive Class A Membership interests in a limited liability company. Class A Memberships have special rights and preferences.
Q. What are these special rights and preferences?
A. Class A Members have the following rights and preferences over the Class B Members.
a. The right to be paid 100% of the proceeds from the sale or distribution of the property or assets of the Company until they are repaid their investment.
b. The right to be paid a 7.5% preferred return from the distribution of cash flow before any payment are made to Class B Member, until they are repaid their investment.
c. The right to receive 70% to 100% and any additional distributions of cash flow until they are repaid their investment.
Q. What is the Minimum investment?
A. The Minimum investment is $50,000.
Q. Who can invest?
A. This investment is restricted to “Accredited Investors” defined in Rule 501(a) of Regulation D under the Securities Act of 1933 (the “Securities Act”)..
Q. What is an Accredited Investor?
A. An investor will qualify as an “Accredited Investor” if he or she meets the following criteria:
a. Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase, exceeds $1,000,000, excluding the value of his or her primary residence;
b. Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and who has a reasonable expectation of reaching the same income level in the current year;
c. Any investor who meets any of the other criteria of Rule 501(a) of Regulation D under the Securities Act of 1933;
Q. What is the Company’s Exit Strategy?
A. The Company is looking to refinance the real estate and business within 5 years in order to repay the investors all or a major portion of their investment.
Q. After the Investors are repaid their investment will they retain in Interest in the Company?
A. Yes After a repayment of their investment, the investors will retain a 70% interest in the real estate and a 50% interest in the business.