The Colton
$3.0MM Preferred Equity · Nampa, ID (Boise MSA)
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$3.0MM of preferred equity recapitalizes a $13,745,712 four-tranche senior into a clean $11,045,712 bridge — then the CMBS takeout replaces the bridge and the pref recasts coterminous behind it. Step through the stack:
| Preferred equity terms | Detail |
|---|---|
| Investment | $3,000,000 |
| Preferred return | 16.00% — 9% current pay / 7% accrued |
| Term | 36 months + 12-month extension |
| Expected hold | ~16 months to CMBS takeout |
| Origination / exit fee | 2.00% in · 0.50% out |
| Interest reserve | $200,000 at close — ~9 months current pay |
| Profit participation | 7.5% of net proceeds after all equity returned |
| Prepayment | Anytime — full redemption amount |
| Position & security | Detail |
|---|---|
| Position | #2 — behind senior, ahead of common |
| Attachment / detachment | 68.30% / 86.85% of stabilized value |
| Collateral | Pledge of 100% membership interests |
| Recourse | Non-recourse + carve-outs, completion (satisfied) & shortfall guaranties |
| New senior behind it sits at | $11,045,712 · SOFR + 225 (~6.55%) · I/O · Oct 2027 |
| Projected year-1 return | $480,000 — $270K cash + $210K accrued |
The full recap at close. Ninety percent of the pref pays the senior down; the balance funds your own interest reserve and closing. Sponsor cash covers the transaction fees.
| Sources | Amount | % |
|---|---|---|
| New senior bridge (Bangkok) | $11,045,712 | 77.4% |
| Preferred equity — senior paydown | $2,700,000 | 18.9% |
| Preferred equity — reserve & closing | $300,000 | 2.1% |
| Sponsor cash — transaction fees | $230,457 | 1.6% |
| Total sources | $14,276,169 | 100% |
| Uses | Amount |
|---|---|
| Payoff — Bangkok Tranche A-1 | $10,230,567 |
| Payoff — Bangkok Tranche A-2 | $1,198,252 |
| Payoff — Exos Tranche B | $2,091,893 |
| Payoff — Exos Tranche C | $225,000 |
| Pref interest reserve (pref-funded) | $200,000 |
| Legal / title / closing (pref-funded) | $100,000 |
| Senior extension fee — sponsor-funded | $110,457 |
| Pref origination + broker fees — sponsor-funded | $120,000 |
| Total uses — balances to zero | $14,276,169 |
Drag the slider — senior and pref coverage recompute live against the $16,172,418 stabilized value (5.5% cap on Oct 2027 NOI).
In-place DSCR 1.28x, 7.65% debt yield, 68.3% LTV — the takeout tests pass at today's numbers, before stabilization seasoning.
2024-delivered Class A at 95% occupancy (updated T3 requested) — completion guaranty deemed satisfied; this is a stabilized-asset recap, not a construction bet.
Sponsor common plus implied equity cushion absorbs the first 13.15% of value decline before pref principal is at risk.
$270K current pay funded from a dedicated reserve plus $210K accrued — ~16.5% effective with the exit fee.
90% of the pref directly reduces senior leverage — from a $13.7MM four-tranche stack to one $11.0MM bank note at SOFR+225.
20+ years, ~500 units owned/managed in Treasure Valley, vertically integrated (capital, construction, management) — with shortfall guaranties.
| Unit mix | Units | In-place | Market |
|---|---|---|---|
| 1 BR / 1 BA · 750 SF | 20 | $1,300 | $1,420 |
| 2 BR / 2 BA · 950 SF | 30 | $1,450 | $1,580 |
| 3 BR / 2 BA · 1,100 SF | 10 | $1,750 | $1,890 |
| Total / avg | 60 | $1,450 | $1,578 |
$113,558 of annual other income (RUBS, pet, parking, fees), held flat across the pro forma. In-place rents trail market ~9% — embedded rollover upside.
| Operating pro forma | In-place | Year 1 · 50% rollover | Stabilized |
|---|---|---|---|
| Gross potential rent | $1,179,456 | $1,202,838 | $1,226,220 |
| Less: vacancy & credit loss | ($58,973) | ($60,142) | ($61,311) |
| Effective rental income | $1,120,483 | $1,142,696 | $1,164,909 |
| Other income | $113,558 | $113,558 | $113,558 |
| Effective gross income | $1,234,041 | $1,256,254 | $1,278,467 |
| Total operating expenses | ($388,984) | ($388,984) | ($388,984) |
| Net operating income | $845,057 | $867,270 | $889,483 |
Expenses held conservative and flat ($6,483/unit, ~31% of EGI) — taxes and insurance corrected to full-year, full-installment basis. Line-item expense detail in the model with deal-room access.
Primary path requires no pref payoff at takeout — the position recasts coterminous behind the CMBS loan and continues earning. Secondary path: 24-month sale at a 5.4% cap clears the full redemption with a $2.0MM surplus. Full model available with deal-room access.
A fourth-generation realtor and second-generation builder, Shannon Robnett has spent 35+ years on both sides of the real estate equation — and runs the full cycle in-house today: Shannon Robnett Industries (capital and sponsorship), Phoenix Commercial Construction (25+ years at the helm — police and fire stations, city halls, schools, office, and industrial), and Executive Management Services (property management, including The Colton itself).
The portfolio spans $425MM+ of completed construction across multifamily, municipal, industrial, and self-storage, with $125MM under active management, $70MM+ of investor capital raised, and roughly 500 units owned and managed across the Treasure Valley. Stress-tested: when a capital partner withdrew from a $20MM project without warning, Robnett raised $22.4MM in 81 days and built a syndication platform in the process.
Track-record figures per Shannon Robnett Industries (shannonrobnett.com).
$3.0MM at 16% behind a 68% senior on a stabilized 2024 Class A asset — with the takeout covenants already clearing at today's numbers. Terms, model, and diligence on request.
