So-called micro-investing in private real estate is an increasingly accessible option for investors looking to diversify ...
Illume is a 77-unit boutique residential condominium located in the Gulch View neighborhood of Nashville. Organized as a multi-sensory urban escape, Illume's lushly landscaped courtyard, custom pool, and fitness center invite residents to connect with the outdoors and all that Nashville has to offer.
Designed by celebrated and local Nashville architect, The Bradley Projects, Illume was designed based on clean lines, airy interiors with abundant natural light, and carefully curated finishes—the design references Gulch View's current emergence.
Unit #302, a 772 square foot one-bedroom, one-bath, corner unit overlooking the pool.
Grand ceiling heights of over 10 feet with expansive glass give homes and open and airy feel. Custom stained flooring and natural accents complement the sophisticated color palette.
Green features and forward-thinking design is paramount—with incorporated energy efficient HVAC systems, appliances, a green roof, and storm-water treatment system.
* Images are model units and not the specific unit we are purchasing.
Illume was developed within a special zoning district and the condominium was organized to allow for short-term rentals. We intend to partner with Turnkey, a premium service for branded hospitality services for private accommodations. Turnkey, established in 2012, manages over 4,800 upscale vacation properties throughout the U.S. The developer of Illume has negotiated favorable pricing with for Turnkey management as they will be managing multiple units at Illume.
Compound is the easy way to build a diversified portfolio of beautiful apartments in some of the world's best cities. Compound slices each apartment into 100,000 equity interests so investors can realize the economic benefits of ownership without the hassles and headaches. Investors receive potential dividends from rental income and build wealth through potential appreciation.
On May 29, 2020 we entered into a purchase and sale agreement to acquire unit 302 for $411,000. Under the terms of the purchase and sale agreement, the seller agreed to provide a credit of up to $23,500 towards the furnishing and decoration of the apartment and an additional $5,000 credit towards closing costs. We have estimated a total capitalization for the acquisition to be $463,000 which includes closing costs associated with the purchase of the property, offering costs, (for this offering and potentially other equity offerings), fees paid to Republic, and operating and capital reserves. In the event that we have overestimated the total capital required, we intend to distribute any excess capital to investors. The closing of the acquisition is expected to occur prior to August 31, 2020.
Following the completion of the purchase and sale, we intend to enter the apartment into the Turnkey Vacation Rental Program. Turnkey has made the following occupancy and average daily rate projections for one bedroom units at Illume:
While we are confident in the projections that Turnkey has provided ($171 average daily rate, 52% occupancy), we have used more conservative estimates ($154 average daily rate, 50% occupancy) to base the operating assumptions shown below.
* All financial figures are estimates only. These estimates are not based on actual investment results and are not guaranteed of future results.
Compound is primarily focused on sourcing opportunities that have the potential for capital appreciation. We intend to hold the property for a period of 3-5 years after we complete the acquisition. Total return on investment will consist of a combination of current income that will be received during the time we hold this property and capital appreciation that may be realized when we sell the property.
Please refer to the FAQs for more information about return estimates.
920 South Street, Nashville, Tennessee
With more than 180 music venues around town ranging from large arenas and concert halls to small clubs, and featuring nearly every genre of music, it's easy to see why Nashville is often referred to as "Music City." Recently, Nashville has also evolved into a tech hub coinciding with Amazon’s impending 5,000 job Operations Center of Excellence announced in 2018.
Drawn not only by the vibrant live music joints that line its downtown streets, but also its low unemployment rates, welcoming vibe, and notoriously diverse and recession-resilient local economy, Nashville has experienced major population and tourism booms in recent years.
Drawing from Nashville’s rich The Gulch neighborhood—Gulch View is set atop Nashville. Gulch View is among Nashville’s most sought after areas—just minutes to the city’s integral music culture, boutiques, nightlife hot spots, and modern hotels.
Illume’s central position places it within close proximity to other popular downtown neighborhoods, such as The Gulch, Music Row and Edgehill Village.
Home values in Nashville have appreciated by 61.8% over the past 10 years including 4.7% over the past year.
* Zillow Home Value Index (ZHVI): A smoothed, seasonally adjusted measure of the typical home value and market changes across a given region and housing type. Based on data as of 4/30/2020.
Rental rates in Nashville have appreciated by 21.2% over the past 5 years including 4.3% over the past year.
*Zillow Observed Rent Index (ZORI): A smoothed measure of the typical observed market rate rent across a given region. Based on data as of 4/30/2020.
The smallest investment amount that Illume – Nashville is accepting.
The largest investment amount that Illume – Nashville is accepting.
Crowd IPA (Interests Purchase Agreement) is a simple agreement to acquire membership
units of a limited liability company.
Crowd IPA (Interests Purchase Agreement) is a simple agreement to acquire membership units of a limited liability company.
The price of each membership unit.
$46,300 – $324,100
Illume – Nashville
needs to raise
before the deadline.
The maximum amount
Illume – Nashville
is willing to raise is
Illume – Nashville needs to reach their minimum funding goal before the deadline
If they don’t, all investments will be refunded.
Compound Asset Management, LLC ("Compound"), a subsidiary of Republic Real Estate, is a real estate asset management company led by an experienced team of real estate veterans. Compound is the managing member of Compound Projects, a real estate investment company that acquires and manages residential condominiums in major U.S. real estate markets.
You are investing in a single condominium unit, the ownership of which has been divided into 100,000 equity interests. For example, if you buy 10,000 interests, you would own 10% of that condominium’s stock.
The property is owned by Compound Projects, LLC. When you invest in a condominium, you become a shareholder in a sub-company (a Series) of Compound Projects, LLC that owns a specific condominium.
We target certain cities that we feel have extraordinary catalysts for appreciation potential. We then seek out condominium units in our favorite buildings that we can acquire at a price that makes sense.
Compound typically engages local property management firms to handle leasing and day to day property management. In addition, most of our properties are in full service condominium buildings that provide maintenance services.
Feel free to walk by but we can’t allow all of our shareholders access to the property.
The offering amount includes operating and capital reserves, closing costs, and offering costs.
At the end of every year, investors will receive an annual 1099-DIV
We do not currently offer a redemption program.
When we sell a property we will distribute proceeds to investors pro-rata based upon the number of shares you own. We intend to hold the property for 3 to 5 years. Deciding when to sell the property will be at Compound’s discretion.
We will provide bi-annual reports which will include financial performance. We will also provide ongoing updates if there are any material changes to the property or its operations.
Each Series of Compound Projects, LLC will elect to be taxed as a real estate investment trust (REIT). Unless your investment is held in a qualified tax-exempt account, your dividends will generally have tax implications. Dividends will typically come in three forms – (i) return of capital dividends (which are generally not taxed and instead reduce your tax basis for future capital gain consideration), (ii) capital gain dividends (which are generally taxable at long-term capital gain rates), or dividends from current or accumulated earnings or profits (which are generally taxed at ordinary income rates). This allows for depreciation to be passed through to investors up to an amount equal to the net income (can reduce taxable income to zero, but won’t result in a pass-through loss). However, because each investor’s tax considerations are different, we recommend that you consult with your tax advisor.
Compound does not charge any asset management fees. We also do not take a piece of the profits.
We are primarily focused on sourcing opportunities that have the potential for capital appreciation. Many types of real estate are valued based on income multiples (cap rates) or dividend yields- and there’s plenty of options for investors who are looking for income. Urban condominiums on the other hand, are valued based on supply and demand and using metrics such as price per square foot. This creates the opportunity for enhanced appreciation. Income and appreciation potential are directly linked (in opposite directions). Think about growth stocks like Netflix or Amazon. They don’t pay dividends and no one invests in these companies for the income- they invest for the appreciation. Condos are the same- you invest to capture future appreciation, not to clip coupons.
We intend to make semi-annual dividend payments based on cash available (after reserves.)
No additional cash outlays or capital calls are required. In the rare event that shortfalls exceed the reserves, then Compound can lend money to the project to fund the shortfall.
At Compound, we’re realists. That means we don’t make up numbers.
What we do, put very simply, is find condominiums that we can buy at prices that make sense.
How do we determine if a purchase price makes sense? Well, first of all, we’ve done this before. Our team is made up of people who have a few decades of professional real estate experience (each!). Together, we take a hard look at supply (new units coming to market) and demand (new household formation and market occupancy). We look at what other similar units have sold for (comparable sales) and we look at current market conditions (average rents, market occupancies, and operating expenses.)
Then, we compare the price we believe the unit is worth against the asking price--and we negotiate to acquire a property at a price that we think is attractive from a value perspective.
Of course, we know what they are, and we acknowledge that in most real estate investments, they’re incredibly important. But the cold, hard truth is that when it comes to condominiums, they’re almost irrelevant. Condos do not sell on the basis of their ability to generate income. Instead, their value is largely based upon supply and demand. Think of condominiums more like a commodity--like oil or gold--that have both a real-world value and an economic value that makes them a store of wealth. When the market thinks they are rare, their value increases. Neither oil nor gold throws off any current income, and yet, they are very valuable assets to own.
Investors love to talk about IRR (or internal rate of return). But guess what? There are really only a few facts that can be known with certainty in real estate investment: where the property is located, how big it is, and what you pay for it. Everything else, from future rents to projected returns, are little more than fantasy--right up there with unicorns and UFOs.
IRR can only be calculated using assumptions about the future. Who can really predict the future? Since we lost all faith in both Zoltar and our Magic 8 ball, we instead rely on the things we know.
We admit that we have no idea what interest rates or inflation---or what economic policy will be in five years. And guess what? Neither does Blackstone or any other real estate asset manager. Which is why any deal that is touting its projected IRR is always accompanied by lengthy disclaimers in tiny print which says, quite plainly, that the projections are meaningless.
You know how magicians swear never to reveal the secrets of their tricks? We’re about to become the rogue magician of the real estate investment industry.
That’s because you will have a hard time finding a real estate firm willing to admit that their ingenuity is actually a very tiny component of their success. Rather, real estate returns are mostly a matter of being in the right market at the right time.
The equities world has already faced this reality, which is why more capital is being passively managed than ever before. But in real estate, every investor is a self-proclaimed genius. (They are always the best managers who can find the best “off-market” deals and blah blah blah.) We are happy to admit it: the markets we invest in will determine the majority of our returns. We will seek to buy at the best values possible in order to enhance those returns, but at the end of the day, you are investing in a market and, drum roll please, the market is king.
To be clear, your investment would be in a Series of Compound Projects, LLC. This investment does not represent an investment in Compound Asset Management ("Compound"), the Manager of Compound Projects. If Compound goes bankrupt then Compound will assist in making an orderly transition of the management of Compound Projects, or may elect to sell the property and distribute the proceeds to shareholders.
Investors in the campaign must be U.S. citizens with a valid U.S. bank account. All investors will be required to submit a W-9 before their investment is finalized.
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