Investment Policy
Investing Criteria
Target Deal Structure
1
Preferred equity investments will target 14% – 18% compounding preferred returns, of which at least 9% must be paid current andmonthly by the Sponsor during the investment’s duration.
2
Targeting at least a 1.2x minimum yield on capital invested in each deal. Minimum yield will be dependent on the expected duration of the investment and will vary with each deal.
3
Targeting 1-3% origination fees on each investment, which gets paid to the Fund by the Sponsor of the project in which the investment is made (1-2% extension as applicable, full cost reimbursement).
4
Experienced Sponsor with substantial ubordinated common equity,no entitlement risk, clear path to repayment, documented step through protections, and underwriting that supports full repayment.
5
Term 12-36 months. Investors should carefully consider the investment objectives, risks, and expenses of the fund.The Fund undertakes no commitment to update or revise the forward-looking statements.
6
To date, AVP preferred equity
investments have been underwritten to an average of 33% downside risk protection prior to any capital exposure.
Actual Analysis Of Two AVP Preferred Equity Investments
AVP Domino
Downside Analysis On Exit Proceeds
|
Exit Cap Rate
|
NOI Erosion
|
||
|---|---|---|---|
|
5.25%
|
$47,459871
|
5.00%
|
$45,086,877
|
|
5.50%
|
$45,086,877
|
10.00%
|
$42,713,884
|
|
5.75%
|
$43,332,926
|
15.00%
|
$40,340,890
|
|
6.00%
|
$41,527,387
|
20.00%
|
$37,967,897
|
|
6.25%
|
$39,866,292
|
25.00%
|
$35,594,903
|
|
6.50%
|
$38,332,973
|
30.00%
|
$33,221,910
|
|
6.75%
|
$36,913,233
|
35.00%
|
$30,848,916
|
|
7.00%
|
$35,594,903
|
40.00%
|
$28,475,923
|
|
7.25%
|
$34,367,493
|
45.00%
|
$26,102,929
|
|
7.50%
|
$33,221,910
|
50.00%
|
$23,729,936
|
|
7.75%
|
$32,150,235
|
55.00%
|
$21,356,942
|
|
8.00%
|
$31,145,540
|
60.00%
|
$18,983,948
|
|
8.25%
|
$30,201,736
|
65.00%
|
$16,610,955
|
AVP FT Hollow
Downside Analysis On Exit Proceeds
|
Exit Cap Rate
|
NOI Erosion
|
||
|---|---|---|---|
|
5.50%
|
$39,978,705
|
5.00%
|
$37,979,770
|
|
5.75%
|
$38,240,501
|
10.00%
|
$35,980,835
|
|
6.00%
|
$36,647,146
|
15.00%
|
$33,981,899
|
|
6.25%
|
$35,181,260
|
20.00%
|
$31,982,964
|
|
6.50%
|
$33,828,135
|
25.00%
|
$29,984,029
|
|
6.75%
|
$32,575,241
|
30.00%
|
$27,985,094
|
|
7.00%
|
$31,411,840
|
35.00%
|
$25,986,158
|
|
7.25%
|
$30,328,673
|
40.00%
|
$23,987,223
|
|
7.50%
|
$29,317,717
|
45.00%
|
$21,988,288
|
|
7.75%
|
$28,371,984
|
50.00%
|
$19,989,353
|
|
8.00%
|
$27,485,360
|
55.00%
|
$17,990,417
|
|
8.25%
|
$26,652,472
|
60.00%
|
$15,991,482
|
|
8.50%
|
$25,868,574
|
65.00%
|
$13,992,547
|