This offering is now closed for new investments. Join the waitlist for our next opportunity.
Click the play button below to watch the Webinar recorded October 30, 2023
INVESTMENT – details on investment structure, fees, and targeted cash flow tables
BUSINESS PLAN – details on Sponsor’s strategy and deal execution, entrance and exit cap rates, and market leasing assumptions
PROPERTY – physical details of the property, amenities, rent roll, and site plans
LOCATION – details on the submarket, demographics, asset class market, and Sales/Lease comps
SPONSOR – photos and bios on the principals for the Sponsor
DISCLAIMERS AND FOOTNOTES
Florida Focused, Tenured Sponsor: Over the last three decades, Feldman Equities has developed or acquired over 11 million square feet of office and retail properties with an aggregate value in excess of $3 billion. Currently, Feldman Equities and its affiliates own and manages a portfolio of approximately 2.3 million square feet.
Convertible Loan: Investors will have the “best of both worlds” in that they will have the protection a second position loan, behind the Senior Debt of $48.5 million but ahead of $19.6 million of previously invested common equity. The convertible loan will earn a 7% interest rate, paid current, throughout the hold period. Upon a sale of the Property in 2026, Feldman projects that the note will convert into 65% of the common equity, allowing investors to capture significant upside while benefitting from the downside protection of a loan position if projections are not achieved.
Land Sale: Feldman is in contract to sell off a portion of the Property’s parking lot to a rental apartment developer for $8 million. In addition, the apartment developer is required to build 175 covered parking spaces for the benefit of Pinnacle Corporate Park, which is expected to help leasing and improve renewal probabilities. The developer is also installing extensive landscaping and a “grand approach” with architectural pavers and grand palms. The mixed-use nature of the overall project is anticipated to help drive leasing interest.
Strong Existing Cash Flow and Transit Oriented: Pinnacle Corporate Park is currently 93% occupied by a diverse list of national and regional tenants and has a weighted average lease term remaining of just over 4 years with a staggered lease expiration schedule. The property has experienced strong Net Operating Income growth since acquisition in 2021 and has benefited from being directly contiguous to the Cypress Creek TriRail station, which is now connected to the regional Brightline high speed rail.
Significant Capital Improvements: Feldman performed a mix of aesthetic and systems upgrades, which are helping to drive up occupancy and revenue. Renovations include a brand-new high-end fitness center, a tenant conference center capable of seating up to 50 people, a fully renovated café, a tenant lounge area, and game room. These upgrades are helping to drive absorption as tenants seek lower cost, quality space outside of downtown Fort Lauderdale. Feldman saw a material increase in rental rates and leasing interest following the completion of the renovations in early 2023.
99% Collections During Covid-19 and Since Acquisition: Despite the challenges the COVID-19 pandemic has created for tenants around the United States, the Property’s rent roll showcased resiliency with 99% collections during this period. This reflects the excellent credit quality of the Property’s Tenancy.
The largest tenant in the property is Vertiv which is a publicly traded company with a market cap in excess of $14B. Although they are the largest tenant, they only occupy 12% of the property. The typical tenant is less than 5,000 SF. Having a variety of smaller tenants in multiple industries limits our exposure in multiple ways. From a rent rollover prospective, it protects us against the potential of having a single large tenant moving out of the building creating a massive vacancy and hit to the Net Operating Income of the asset. From a resiliency standpoint, if an industry gets hit harder than another, having a good tenant mix is key.
An affiliate of Feldman Equities, LLC (“Feldman”, or the “Sponsor”) is pleased to offer investors the opportunity to invest up to $2.50 million in Class A membership interests of Pinnacle Convertible Loan, LLC, a Delaware limited liability company (the “Offering”). The Offering was created to issue a loan in the amount of approximately $6,875,000 to Pinnacle Corporate Holdings, LLC (the “Company”), which is the beneficial owner of the Property’s deedholder. The Company closed on the acquisition of Pinnacle Corporate Park, a two-building, Class A office property located in Fort Lauderdale, FL (the “Property”) on June 2, 2021 and has operated it since acquisition.
Pinnacle Sponsor, LLC, a Delaware limited liability company and affiliate of the Sponsor (the “Manager”), will serve as the manager of the Company.
The sponsor is not charging any fees or promoted equity on this convertible loan raise.
The minimum investment amount is $25,000.
The convertible loan will earn a 7% interest rate, paid current and quarterly by Pinnacle Corporate Holdings, LLC. Distributions are made at the sole discretion of the Sponsor. Please see offering documents for additional detail.
The above distribution table is a summary. Please see Article 7 of the Pinnacle Convertible Loan, LLC Operating Agreement to review the distribution language in its entirety.
Do you have a ‘capital call’ option for the loan?
Yes this investment is subject to capital calls at the discretion of the Sponsor.
The sponsor is not charging any fees or promoted equity on this convertible loan raise.
| Lender | TPG |
| Loan Amount | $48,575,000 |
| Originated | June 2021 |
| Interest Rate | 4.86%* |
| Amortization | None |
| Term | 3 Years + two 1-Year Extension Options |
| Prepayment Penalty | Prepayable at any time |
*The 4.86% interest rate is the effective rate after taking into account the offsetting payments from the interest rate cap that our lender is requiring we purchase in order to extend the loan.
Land Sale Price | $8,000,000 |
Closing Date | April 2025 |
At-Risk Requirements | Developer at risk $700,000 by April 2024 |
Other Terms | 175 new parking spaces for office |
Development Type | Luxury apartments |
This property has been successfully repositioned as the best-in-class office building in the fast-growing Cypress Creek submarket of Ft. Lauderdale, Florida. Sponsorship has completed a $7 million renovation since acquisition in 2021 and increased occupancy from 83% to 93%.
The property is facing a loan maturity come June of 2024 and is in need of additional capital to extend the loan through the purchase of an interest rate cap and to continue leasing the property to grow net operating income. The new convertible loan is being provided to take advantage of the contractual loan extension right built into the existing loan agreement that allows investors to take advantage of an advantageous interest rate spread issued in 2021. The convertible loan provides the “best of both worlds” because investors will have the downside protection of a second loan position and the upside potential of being able to convert to equity upon a sale of the property.
Sponsorship intends to grow net operating income, sell a portion of excess land to a multifamily developer, and drive occupancy at the building with newly raised funds, enabling an advantageous exit in June of 2026 prior to the expiration of the second loan extension period.
The Property is a two-building office property approx. 262,000 square feet, located in the Cypress Creek submarket, approximately 12 minutes from downtown Fort Lauderdale. The larger building (approx. 150,000 square feet), which features an all-glass facade, was built in 1986 and the smaller building (approx. 112,000 square feet) was built in 2001. The Property boasts strong transportation connectivity with an immediately abutting TriRail commuter station and has near immediate access to the I-95 on-ramp. The tenancy is highly diversified, with no tenant occupying more than 12% of the rentable square footage. The weighted average lease term of the existing tenants is approx. 4 years. The tenancy includes a strong presence from technology, financial services, and business services firms. Notably, 100% of rents were collected in 2020 during the height of COVID.
Often referred to as “Uptown Fort Lauderdale”, the Cypress Creek submarket showed strength through 2023. Rental rates continued to rise. The office vacancy for the Cypress Creek submarket is 11.0% per Costar, which is up from 10.2% in Q2 2023. The overall availability rate (which includes both vacant space and sublet space) is 14.4%, up from 13.4% in the last quarter. Average asking rents are $31.36 per square foot, up from $30.61 in the last quarter.
Located between Miami-Dade and Palm Beach counties, Broward County/Greater Fort Lauderdale is truly the center of the South Florida metropolitan area. Bordered by 35 miles of beaches, the Atlantic Ocean to the east, and the Everglades National Park to the west, the county’s population of approximately two million people is growing every day. Between 2021 and 2022, Broward County’s population grew by nearly 180,000 people.
Source: CoStar
The office market in Broward County showed signs of life in Q2 as leasing activity picked up, propelled by major sublease deals signed by Nations Benefits and Chewy. Asking rates jumped after wavering in Q1 as landlords saw more demand with employees returning to offices and firms finally implementing their new occupancy strategies. While sublease availabilities remain elevated, competition for move-in ready space is fierce. However, demand remains mostly organic and largely driven by portfolio restructuring rather than new-to-market firms as in Palm Beach and Miami.
Chewy signed for 221,597 s.f. at 7600-7700 W Sunrise Boulevard and Nations Benefits took 53,049 s.f. at 1801 NW 66th Avenue, taking two large subleases off the market. However, Carnival Cruise Line and Royal Caribbean listed roughly 90,000 s.f. and 50,000 s.f. of call center space, respectively, for sublease in Miramar. Tripp Scott, AT&T, Aflac and Weiss Serota all renewed in place with minimal rightsizing. Benefytt Technologies entered the market, expanding from their Tampa roots into the Hotwire Technology Center in Cypress Creek with a 26,163 s.f. lease.
Market fundamentals in Fort Lauderdale are returning to normal, with businesses open and restrictions mostly lifted. Total employment was back up to 95.4% of its pre-pandemic high and new unemployment claims have leveled off. Office-using employment was up 1.6% from April to May in the strongest month-over-month gain since last June. Fundamentals should continue to improve over the coming months as more offices open and hiring efforts ramp up.
Source: JLL, 2Q2021 Report
Source: CoStar
Office vacancies are the lowest they have been in 20 years in Cypress Creek after compressing steeply in the past year. The rate is lower than the metro rate for the first time in about 30 years after averaging more than 300 basis points higher than the metro rate over the past 10 years. Even so, the coronavirus pandemic continues to negatively impact leasing activity since many office using employees continue to work from home and vacancies are projected to gently climb over the coming 18 months.
Average office rents around $28/SF are some of the lowest in the metro and are about 12% lower than the average across Fort Lauderdale. Rent growth has been just under 1% in the past year, in line with the metro average. Annual growth has been slowing in Cypress Creek for the past four years as it has across Fort Lauderdale. The pandemic has impacted office sales volume in the submarket, as well. Less than $50 million traded in 2020 but activity has increased in 2021 and annual volume is more than double the submarket’s 10year average.
Source: CoStar
An affiliate of Feldman Equities, LLC (“Feldman Equities” or the “Sponsor”) encompasses a century of success in commercial real estate development and ownership throughout the United States. Feldman Equities and its joint venture partners own or manage over four million square feet of Florida office space. Over the preceding three decades, Feldman Equities has developed or acquired over eleven million square feet of commercial real estate with an aggregate value in excess of $3 billion. Feldman Equities is marshaled by its president and CEO, Larry Feldman.
Total Sponsor Portfolio
Mr. Feldman has been the president and CEO of Feldman Equities since 1990. From 1997 until 1999, he was the founder of, and served as the Chairman of the Board and Chief Executive Officer of Tower Realty Trust, a publicly traded REIT (NYSE: “TOW”).
From 2004 to 2009, Mr. Feldman served as Chairman of Feldman Mall Properties, Inc. a publicly traded REIT (NYSE: “FMP”) . He is also the founder and former Chairman of the Midtown West Association of New York City. Mr. Feldman was formerly a member of the Board of East Woods School in Oyster Bay NY. He graduated from Windham College with a Bachelor of Science degree in Economics. Mr. Feldman has lectured at the graduate school of N.Y.U. on commercial real estate development.
Mr. Feldman has been directly responsible for the management, development or acquisition of over 11 million square feet of real estate with an aggregate value of over $3 billion dollars during a career spanning over 30 years in the commercial real estate business. Mr. Feldman’s primary focus over his career has been on the acquisition and redevelopment of office buildings.
Baharea Larsen is Executive Vice President of Leasing and Marketing for Feldman Equities. Specializing in repositioning and leasing office properties, Baharea has 14 years of experience in the Tampa Bay market and is currently oversees over 2 million square feet.
Prior to her role at Feldman Equities Baharea was a Vice President of leasing at Redstone Development where she focused on identifying build-to-suit opportunities and agency leasing. Before Redstone she was a Senior Associate with Cushman and Wakefield where she received the 2012 Cushman and Wakefield’s deal of the year and 2012 NAIOP’s office deal of the year.
Throughout her career Baharea has been involved with professional organizations such as NAIOP, Leadership Tampa Bay, Gateway Chamber of Commerce, and FGCAR. She earned a B.S. degree with a double major in Real Estate and Marketing from Florida State University.
Kyle Nevergold is Vice President of Construction for our Tampa Bay portfolio of properties. As VP of Construction, he oversees Capital Improvements, Tenant Improvements and major repairs within our 2 million square feet of office space. His role encompasses the direction of multiple ongoing projects, minimizing construction costs, and standardizing processes. Kyle was previously Regional Portfolio Manager, overseeing six managers and seven management staffers on the Property Management team.
Kyle began his real estate career in New York City by attending the Schack Institute of Real Estate at NYU. He worked at several Class A buildings in Manhattan as a Manager for Vornado Realty Trust. He then transitioned to Newmark Grubb Knight Frank and worked as property manager within the W&H Building Portfolio, which later became Empire State Realty Trust. Kyle earned a MUP of Urban Planning from SUNY at Buffalo.
Mack is Vice President of Asset Management overseeing Feldman Equities’ office portfolio, including leasing, property management, and construction.
Mack is a board member of the St. Petersburg Downtown Partnership and YIMBY St. Pete. He was selected by the Tampa Bay Business Observer as part of its “40 Under 40” class of 2018.
Before joining Feldman Equities, Mack served as a Policy Researcher for the presidential campaign of Governor Jeb Bush. He graduated from New York University as a Hirsh Scholar and Dean’s Scholar with a Master’s of Real Estate and Georgetown University with a Bachelor’s in Government.
Jeff has spent his entire career working in the construction industry. His father owned the largest lathing & plastering co. in New England so it was only natural that Jeff would start working in the family business as a teenager. At age 20, Jeff started Rowe Drywall, Inc., after relocating to Key West. He credits his success in the Keys to having a strong New England work ethic. He owned and operated the largest drywall company in the Keys until relocating to Tampa in 2005 when he started working as a field superintendent for iConstructors, Commercial General Contractors, in their Interior Division.
From 2005 to 2021, Jeff worked his way up to be Senior Project Manager for iConstructors and is credited with building some of Tampa’s premier high-end interior projects. In 2021, Jeff transitioned to one of his favorite clients, Feldman Equities, as Director of Construction, for the next exciting chapter in his career.
Jonathan is the VP of Real Estate Transactions of Feldman Equities and heads all company acquisitions, recapitalizations, refinances and dispositions. Over the last 30 years, Feldman Equities has developed or acquired over eleven million square feet of office and retail properties with an aggregate value in excess of $3 billion. Jonathan is focused on expanding the company’s equity syndication channels. Jonathan joined Feldman Equities in 2016 and previously managed all of the construction for the company’s properties.
Jonathan moved from his birthplace of Lugano, Switzerland after completing his education in Business and Economics and came to the warmth of Florida to follow his real estate development passion. He has been investing in, renovating and managing residential properties in the Tampa Bay area since 2013.
(1)Pinnacle Sponsor, LLC (the “Sponsor”) will be contributing in excess of $1,000,000 million of the $6,870,935 total targeted raise for Pinnacle Convertible Loan LLC. Pinnacle Sponsor, LLC will be owned by Larry Feldman, Feldman employees, Feldman relatives and high net worth investors of Feldman Equities. This results in an approximately 15% co-investment.
The content on this detail page was produced by the Sponsor or an affiliate thereof. The Sponsor is under no obligation to update this detail page. Assumptions and projections included in this detail page are reflective only of the Pinnacle Convertible Loan, LLC or its affiliates.
The preceding summary of principal terms of the offering is qualified in its entirety by reference to the more complete information about the offering contained in the offering documents, including, without limitation, the Private Placement Memorandum, Operating Agreement, Subscription Agreement and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). This summary is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment. In the event of an inconsistency between the preceding summary and the Investment Documents, investors should rely on the content of the Investment Documents.
There can be no assurance that the methodology used for calculating targeted returns is appropriate or adequate. Target returns are presented solely for the purpose of providing insight into the Pinnacle Convertible Loan LLC’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Pinnacle Convertible Loan LLC’s performance. Targeted returns are not a predictor, projection or guarantee of future performance. There can be no assurance that the Pinnacle Convertible Loan LLC’s targets will be met or that the Pinnacle Convertible Loan LLC will be successful in identifying and investing in investment opportunities that would allow the Pinnacle Convertible Loan LLC. to meet these return parameters. Target returns should not be used as a primary basis for an investor’s decision to invest in the Pinnacle Convertible Loan LLC.. Please see the applicable Investment Documents for disclosure relating to forward-looking statements.
All forward–looking statements attributable to the Sponsor or persons acting on its behalf apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in this summary and the Investment Documents. Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
The interests in the Pinnacle Convertible Loan LLC.will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon exemptions contained in 506(c) of Regulation D as promulgated under the Securities Act. In addition, the interests will not be registered under any state securities laws in reliance on exemptions from registration. Such interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption.
All investing activities risk the loss of capital. There can be no assurance that investors will not suffer significant losses. No guarantee or representation is made that the investment objectives of the Pinnacle Convertible Loan LLC will be achieved. You should not subscribe to purchase interests in Pinnacle Convertible Loan LLC. unless you can readily bear the consequences of such loss.
A two-building, Class-A office property in Ft. Lauderdale, FL. This asset has strong contractual rent growth over the hold period. New investors will benefit from an attractive convertible loan structure and the sale of excess land to access excellent returns.
This offering is now closed for new investments. Join the waitlist for our next opportunity.
| Targeted Investor IRR | 44.29% |
| Targeted Equity Multiple | 2.5x |
| Targeted Average Cash Yield | 7% |
| Targeted Investment Period | 2.5 Years |
| Total Capital Raise | $6,870,935 |
| Capital Committed So Far | $5,300,000 |
| Investment Profile | Convertible loan |
| GP Co-invest | $1,000,000+ |
| GP Equity (1) – % | 14.5%+ of Total Equity |
| Offers Due Date | November 20, 2023 |
| Funds Due Date | November 28, 2023 |
| Minimum Investment | $25,000 |
| SD-IRA Investments? | Yes |
