Would love comments. This is a negative example on how to send a pitch.
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Dear Friend,
My partner and I are starting new company that will specialize in the CIS Region and Easter Europe. We are looking for accredited investors, institutional investors and fund raisers or private placement agents. The terms and conditions of cooperation will be discussed individually. Contact us for more information and complete Executive Summary, the PPM is ready as well.
All invitations and recommendations are welcome!
1. Introduction
CIS Properties LLC, a Delaware Limited liability company (the “Company or “CIS Properties ”) seeks to raise up to One Billion US Dollars to be used in acquiring distressed Commercial real estate, whole loans and distressed CMBS in Russia and CIS countries (Russia, Ukraine, Azerbaijan, Turkmenistan, Kazakhstan, Kyrgyzstan and Uzbekistan) . CIS Properties may or may not be a Sharia-compliant entity. CIS Properties will focus on several types of transactions:
a) Provide debt and equity capital to cash-strapped developers that have good commercial real estate projects. The target IRR will be a minimum of 20% per annum, with 3-5 year exit strategy.
b) Acquire existing commercial properties (office, multifamily, retail, industrial, mixed use, etc.) that are financially or operationally distressed.
c) Acquire deeply discounted Commercial Mortgages that are secured by commercial real estate.
d) Acquire interests in private corporate entities that own primarily real estate (eg. LLCs, and Trusts).
e) Acquire distressed Commercial Mortgage Backed Securities (CMBS) that are trading at significant discounts; where the CMBS grants an ownership interest in the underlying mortgage(s).
CIS Properties will earn revenues in several ways:
a) Returns on its equity investments in JVs with real estate developers (un-completed institutional-grade commercial real estate development projects in the US (projects in Russia and CIS Region, Eastern Europe).
b) Financing fees for providing the equity (typically 5% on equity/mezzanine/bridge financing, and 1.5%-2% on senior debt).
c) Returns on equity investments in existing distressed institutional-grade commercial real estate.
d) Returns on investments in Commercial Mortgage Backed Securities.
e) Returns on investments in Whole Loans (Commercial Mortgages) and commercial leases.
CIS Properties ’s strategies will include a combination of the following:
a) Sell the asset for a profit; or
b) Re-position the asset (re-development, renovations, change of tenancy, change of lease structure/durations, etc.); or
c) Re-negotiate agreements/mortgages/leases; and or
d) Hold the asset and earn a cash-on-cash return. The target assets will be partly evaluated (acquisition criteria) based on their then current cash yields; and thus, the SPV will not depend on increases in values of the assets, and will not have to wait for a partial or full economic recovery in order to earn profits
e) Exchange the asset for another asset owned by a third party.
f) Package some of the assets into a special purpose vehicle such entity as a publicly traded company.
2. Opportunity
• The global credit crunch has spread to global markets and has reduced the values of many commercial properties worldwide.
• The credit crunch has adversely affected the operations of many real estate developers, who can no longer continue to fund their operations (cannot refinance short-term construction loans) – this presents substantial buying opportunities.
• The institutional investors that invest in CIS Properties may obtain tax benefits and may be able to shield properties from bankruptcy proceedings.
• Interest rates are at historically low levels, and may continue to decline as various central banks try to revive their economies.
• More CMBS and commercial mortgages are likely to default as consumer confidence, household disposable income and retail sales decline globally.
• The credit crisis helped reduce global commercial real estate sales in 2008 by 58% to US $504 billion globally. Hotel sales declined the most (down 75% globally).
• As of February 2009, about US$10 billion of commercial property worldwide has been foreclosed upon or transferred back to lenders and US$72 billion was in default state.
• In Russia/CIS, entry-cap-rates for commercial properties are 22-34%, compared to 6-12% in the US and Western Europe.
• See: European Securitization Forum data - http://www.europeansecuritisation.com/Market_Standard/ESF%20Data%20Report%20Spring%202007.pdf .
• The combination of a credit crunch, lower consumer confidence, increased consumer debt, and reduced consumer spending will continue to reduce occupancy levels and property values.
• According to an April 2009 report by the IMF (Global Financial Stability Report - http://www.imf.org/external/mmedia/view.asp?eventID=1440 ), the values of many non-residential-mortgage loans held by institutions are declining; and financial institutional worldwide face losses of more than US$4.1 Trillion due to loan losses.
3. Use of Proceeds
At least Ninety Percent of the proceeds of this offering will be used solely for the acquisition of real estate, mortgages and CMBS. The remaining funds will be used for overhead expenses. Any funds that are not being invested will be used for working capital or will be used to purchase Preferred Stock (rated BBB and above by S&P) of real estate companies in the US and Europe, and US Treasuries or UK Gilts.
4. Business Model
The main elements of the Company’s business model are:
a) Outsourced property management. The Company will typically have the option to acquire controlling equity interests in these property management companies.
b) Flat organizational structure. Organization into property-specific divisions, and then subsidiaries.
c) The use of strategic alliances, JVs and partnerships.
e) Effective incentives. Employee ownership and participation in profit-sharing.
f) Significant use of debt in acquisitions.
g) Emphasis on under-valued real estate, CMBS and mortgages.
Contacts: Mike Nwogugu, P O Box 996, Newark, New Jersey 07101, USA. Emails: mcn2225@aol.com; mcn111@juno.com. Phone: 1-917-652-9289
Aleksey (Alex) Gordienko, 96 Kosmonavtov Ave, office 33, Yekaterinburg, Russia, 620135 E-mails: alekseygodienko@yahoo.com ; alekseyg1@yandex.ru . Phone +7-912-600-7016
THIS DOCUMENT IS NOT AN OFFERING IN ANY JURISDICTION. INVESTORS MUST REVIEW THE OFFERING MEMORANDUM, CONDUCT DUE DILIGENCE AND CONSULT THEIR LEGAL AND FINANCIAL ADVISORS BEFORE INVESTING. EACH INVESTOR WILL BE REQUIRED TO SIGN A SUBSCRIPTION AGREEMENT BEFORE INVESTING IN THIS VENTURE.
Best Regards
Alex Gordienk
----------------------------------------------------------------------------
Dear Friend,
My partner and I are starting new company that will specialize in the CIS Region and Easter Europe. We are looking for accredited investors, institutional investors and fund raisers or private placement agents. The terms and conditions of cooperation will be discussed individually. Contact us for more information and complete Executive Summary, the PPM is ready as well.
All invitations and recommendations are welcome!
1. Introduction
CIS Properties LLC, a Delaware Limited liability company (the “Company or “CIS Properties ”) seeks to raise up to One Billion US Dollars to be used in acquiring distressed Commercial real estate, whole loans and distressed CMBS in Russia and CIS countries (Russia, Ukraine, Azerbaijan, Turkmenistan, Kazakhstan, Kyrgyzstan and Uzbekistan) . CIS Properties may or may not be a Sharia-compliant entity. CIS Properties will focus on several types of transactions:
a) Provide debt and equity capital to cash-strapped developers that have good commercial real estate projects. The target IRR will be a minimum of 20% per annum, with 3-5 year exit strategy.
b) Acquire existing commercial properties (office, multifamily, retail, industrial, mixed use, etc.) that are financially or operationally distressed.
c) Acquire deeply discounted Commercial Mortgages that are secured by commercial real estate.
d) Acquire interests in private corporate entities that own primarily real estate (eg. LLCs, and Trusts).
e) Acquire distressed Commercial Mortgage Backed Securities (CMBS) that are trading at significant discounts; where the CMBS grants an ownership interest in the underlying mortgage(s).
CIS Properties will earn revenues in several ways:
a) Returns on its equity investments in JVs with real estate developers (un-completed institutional-grade commercial real estate development projects in the US (projects in Russia and CIS Region, Eastern Europe).
b) Financing fees for providing the equity (typically 5% on equity/mezzanine/bridge financing, and 1.5%-2% on senior debt).
c) Returns on equity investments in existing distressed institutional-grade commercial real estate.
d) Returns on investments in Commercial Mortgage Backed Securities.
e) Returns on investments in Whole Loans (Commercial Mortgages) and commercial leases.
CIS Properties ’s strategies will include a combination of the following:
a) Sell the asset for a profit; or
b) Re-position the asset (re-development, renovations, change of tenancy, change of lease structure/durations, etc.); or
c) Re-negotiate agreements/mortgages/leases; and or
d) Hold the asset and earn a cash-on-cash return. The target assets will be partly evaluated (acquisition criteria) based on their then current cash yields; and thus, the SPV will not depend on increases in values of the assets, and will not have to wait for a partial or full economic recovery in order to earn profits
e) Exchange the asset for another asset owned by a third party.
f) Package some of the assets into a special purpose vehicle such entity as a publicly traded company.
2. Opportunity
• The global credit crunch has spread to global markets and has reduced the values of many commercial properties worldwide.
• The credit crunch has adversely affected the operations of many real estate developers, who can no longer continue to fund their operations (cannot refinance short-term construction loans) – this presents substantial buying opportunities.
• The institutional investors that invest in CIS Properties may obtain tax benefits and may be able to shield properties from bankruptcy proceedings.
• Interest rates are at historically low levels, and may continue to decline as various central banks try to revive their economies.
• More CMBS and commercial mortgages are likely to default as consumer confidence, household disposable income and retail sales decline globally.
• The credit crisis helped reduce global commercial real estate sales in 2008 by 58% to US $504 billion globally. Hotel sales declined the most (down 75% globally).
• As of February 2009, about US$10 billion of commercial property worldwide has been foreclosed upon or transferred back to lenders and US$72 billion was in default state.
• In Russia/CIS, entry-cap-rates for commercial properties are 22-34%, compared to 6-12% in the US and Western Europe.
• See: European Securitization Forum data - http://www.europeansecuritisation.com/Market_Standard/ESF%20Data%20Report%20Spring%202007.pdf .
• The combination of a credit crunch, lower consumer confidence, increased consumer debt, and reduced consumer spending will continue to reduce occupancy levels and property values.
• According to an April 2009 report by the IMF (Global Financial Stability Report - http://www.imf.org/external/mmedia/view.asp?eventID=1440 ), the values of many non-residential-mortgage loans held by institutions are declining; and financial institutional worldwide face losses of more than US$4.1 Trillion due to loan losses.
3. Use of Proceeds
At least Ninety Percent of the proceeds of this offering will be used solely for the acquisition of real estate, mortgages and CMBS. The remaining funds will be used for overhead expenses. Any funds that are not being invested will be used for working capital or will be used to purchase Preferred Stock (rated BBB and above by S&P) of real estate companies in the US and Europe, and US Treasuries or UK Gilts.
4. Business Model
The main elements of the Company’s business model are:
a) Outsourced property management. The Company will typically have the option to acquire controlling equity interests in these property management companies.
b) Flat organizational structure. Organization into property-specific divisions, and then subsidiaries.
c) The use of strategic alliances, JVs and partnerships.
e) Effective incentives. Employee ownership and participation in profit-sharing.
f) Significant use of debt in acquisitions.
g) Emphasis on under-valued real estate, CMBS and mortgages.
Contacts: Mike Nwogugu, P O Box 996, Newark, New Jersey 07101, USA. Emails: mcn2225@aol.com; mcn111@juno.com. Phone: 1-917-652-9289
Aleksey (Alex) Gordienko, 96 Kosmonavtov Ave, office 33, Yekaterinburg, Russia, 620135 E-mails: alekseygodienko@yahoo.com ; alekseyg1@yandex.ru . Phone +7-912-600-7016
THIS DOCUMENT IS NOT AN OFFERING IN ANY JURISDICTION. INVESTORS MUST REVIEW THE OFFERING MEMORANDUM, CONDUCT DUE DILIGENCE AND CONSULT THEIR LEGAL AND FINANCIAL ADVISORS BEFORE INVESTING. EACH INVESTOR WILL BE REQUIRED TO SIGN A SUBSCRIPTION AGREEMENT BEFORE INVESTING IN THIS VENTURE.
Best Regards
Alex Gordienk
