BR 79 West, DST - Bluerock Value Exchange
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DELAWARE STATUTORY TRUST (DST) AVAILABLE FOR 1031 EXCHANGE & DIRECT INVESTMENT
BR 79 West, DST PANAMA CITY BEACH,
FLORIDA
1 0 2 CA BA NA C AY CIRCLE | PAN AMA CIT Y BE AC H , FLOR IDA 3 2 4 1 3
EQUITY OFFERING AMOUNT: $42,387,253 | MINIMUM INVESTMENT AMOUNT: $100,000 (0.23356%) FOR 1031 EXCHANGE
79 West (the “Property”) represents an opportunity to invest in a class A, garden-style apartment community, located in Panama City Beach, Florida,
part of the Panama City metropolitan statistical area (the “Panama City Metro”), within walking distance to the renowned Panama City Beaches.
The Property is one of the few class A multifamily properties in the Panama City Metro with walkability to the highly
acclaimed Panama City beaches.
The Property is located in Panama City Beach, Florida, part of the Panama City Metro. The Property offers excellent visibility, located near the
intersection of Front Beach Road and FL-79 and distinguishes itself in the area as one of the few class A apartment communities with walkability to
the Panama City Beaches. The Property’s location provides superb connectivity to all major transportation arteries in the Panama City Metro, including
Northwest Florida Beaches International Airport, FL-79, Front Beach Road and US-98 which connects Panama City Beach to the mainland and to the
central business district as well as numerous employment centers in Panama City. The Property’s location delivers easy access to the major employers
in the area including Tyndall Air Force Base, Gulf Coast Medical Center and Ascension Sacred Heart Bay Medical Center. Additionally, the Property is
less than 2.5 miles from Pier Park and Pier Park North, providing more than one million square feet of desired retail and dining options including Old
Navy, Red Robin, Starbucks, Bed Bath and Beyond, and Chili’s. The Property also provides its tenants with superb walkability to some of Panama City
Beach’s 27 miles of white sand beaches.
BR 79 West, DST (the “Trust”) seeks to provide attractive monthly cash flow distributions and growing property values associated with a strong
multifamily market that generated 15% year-over-year average rent growth on new leases during the previous five months.
There is no guarantee Purchasers will receive distributions or the return of their capital. See the “Risk Factors” section in the Confidential Offering
Memorandum (the “Memorandum”). The results shown may not occur, and your performance could vary significantly. Capitalized terms used but
not defined in this brochure have the meanings given in the Memorandum.
FOR ACCREDITED INVESTOR USE ONLY | This is neither an offer to sell nor a solicitation of an offer to buy any securities. BR 79 West, DST is a recently formed Delaware statutory trust
that is offering (the “Offering”) to sell 99% of its beneficial interests (the “Interests”) to “accredited investors” as that term is defined in Rule 501 promulgated under the Securities Act
of 1933, as amended. Interests are only being offered pursuant to the Memorandum. This material must be reviewed in conjunction with the Memorandum to fully understand all of
the implications and risks associated with the Offering and an investment in the Interests. Prospective Purchasers should carefully read the Memorandum and discuss with their own
investment professionals prior to making an investment and should be able to bear the complete loss of their investment.
Key Investment Considerations
B R 79 W ES T, DS T
Instant value creation as the Property was purchased for
$1,400,000 million below appraised value. (Source: Appraisal)
Recent $3.5 million in capital improvements performed by
the seller includes a newly built clubhouse, state-of-the-art
fitness center, upgraded landscaping, upgraded playground,
and pool furniture.
Additional value-add opportunity with a planned stainless
steel appliances upgrade in remaining 257 units for a
targeted 38% return on investment through increased rents.
The Property is one of the few class A multifamily properties
in the Panama City Metro with walkability to the highly
acclaimed Panama City beaches.
The Property is located approximately two miles from over
1 million square feet of retail services, including Pier Park,
a major open air destination shopping center.
Average household income of more than $88,000 within a
3-mile radius; approximately 14% higher than the Panama
City Metro average. (Source: Appraisal) Pictured: (Top) Pier Park in Panama City Beach, Florida.
and (Bottom) Panama City Beach, Florida.
Note: Investors are not purchasing interests in the above properties.
There is no guarantee Purchasers will receive distributions or the return of their capital. See the “Risk Factors” section in the Memorandum. The results shown may not occur,
and your performance could vary significantly.
INVESTMENT OVERVIEW
BUSINESS PLAN
Bluerock Value Exchange (“BVEX”) believes the Property is well positioned for additional significant rental rate growth and appreciation due to strong
rental demand in the Panama City Metro, a growing population driven by strong in-migration, and its desirable location with close proximity to Panama
City Beaches. BVEX plans to implement the following initiatives to enhance the Property’s value:
Implement a value-add program encompassing the remaining 257 units at the Property with unit upgrades at an average cost estimate of
approximately $1,800 per unit, which are projected to generate an average $50 increase in rent per unit per month, and will include upgraded
stainless steel appliances for a targeted return on investment of 33%. The value-add program is expected to assist the Property in bridging the gap
in effective rents between the Property and newer built properties.
Implement aggressive marketing campaigns to reach out to local corporations, businesses and vendors to obtain referrals, activity sponsorships
and reciprocal business opportunities.
Hire a nationally recognized third-party property management company to oversee an on-site management team of experienced and enthusiastic
professionals.
Install a state-of-the-art computerized revenue management program that collates market and submarket data and establishes daily pricing for
all units based on a number of primary factors including inventory, days on market, move-in date and location. This type of computerized revenue
enhancement system is gaining wide acceptance in the multifamily management industry as being a cost-effective software program that will
manage pricing in an effort to increase the financial performance of the Property.
KITCHEN & LIVING AREA BEDROOM
O FFERING H I GHLI GHT S $100,000 MINIMUM INVESTMENT THE MASTER LEASE
The Trust will lease the Property to an affiliate
Assumed Debt (0.23356% interest): $89,760 of Bluerock, BR 79 West Leaseco, LLC, a newly-
formed Delaware limited liability company (the
Offering Purchase Price: $80,818,253 “Master Tenant”), under a 10-year master lease
includes $2,300,000 agreement (the “Master Lease”). The Master Tenant
in Supplemental Trust Reserves
will sub-lease the Property to the residential tenants
(the “Residents”). The purpose of the Master Lease is
Equity Amount: $42,387,253 to permit the Master Tenant to operate the Property
and to enable actions to be taken with respect to
Loan Amount: $38,431,000 the Property that the Trust would be unable to take
due to tax law related restrictions, including but
Loan Terms: 47.30% Loan-to-Capitalization; not limited to, a restriction against re-leasing the
10-Year Term, 7-Year Interest Only; Property.
3.38% Fixed Interest Rate
As part of the Master Lease, the Trust will receive
Projected Hold Period: Approx. 7-10 Years Base Rent (debt service), Additional Rent (monthly
distributions) and Supplemental Rent (annual
Current Cash Flow to Trust Under 4.00% annual rate, paid monthly** performance distribution) from the Property’s gross
Master Lease: revenues as described in the Master Lease.
**Figure reflects Additional Rent paid pursuant to the Master Lease, shown on an annualized basis as a percentage of equity invested in the Property. Current cash flow is not an assurance
of future results and does not directly represent investor return. There is no guarantee Purchasers will receive distributions or the return of their capital. See the “Risk Factors” section
in the Memorandum. Additional Rent represents rent paid to the Trust out of gross revenues from the Property in excess of the Base Rent, which covers debt service and lender reserves,
operating costs of the Property and asset management fee. See the “Summary of the Master Lease” section in the Memorandum.
PROPERTY SUMMARY
The Property offers amenity-rich living space in one- and two- bedroom
apartment floor plans.
YEAR COMPLETED: 2007
CLASS: A
BUILDINGS: 3
ACRES: 19.96
NUMBER OF UNITS: 304
AVERAGE UNIT SIZE: 831
TOTAL SQUARE FEET: 252,522
C O M M UN I T Y AM ENI TI ES
newly built clubhouse,
resort style swimming pool,
state-of-the-art fitness center,
two spa hot tubs,
bark park,
CLUBHOUSE
elevators,
guest parking,
ocean views,
gazebo, and
walking distance to the beach.
U NI T A M E N I T I ES
balcony or patio,
breakfast bar*, FITNESS CENTER
bunk room*,
central air and heating,
den or study*,
dishwasher,
kitchen island*,
tile floors,
ocean views*,
walk-in closets*, and
washer and dryer.
*available in select units only
OUTDOOR LOUNGE
WH Y A PAR TM ENT S ?
New research indicates a cumulative gap of nearly 2.4 million multifamily units nationally.6
The Panama City Metro market has exhibited strong fundamentals since 2010 with rising
rental rates and occupancy rates averaging nearly 95.5% since Q1 2010, as exhibited in the
chart below. Additionally, REIS projects vacancy rates to average 2.6% through 2026 with
market rents rising 16.9% for the same time period.7
Nearly 17% effective rent increase
PANAMA CITY MARKET TRENDS 7 projected through 2026
MULTIFAMILY $1,600 100.0%
HAS GENERATED THE
98.0%
HIGHEST $1,200
96.0%
OCCUPANCY RATE
EFFECTIVE RENT
RETURNS
94.0%
$800
92.0%
& LOWEST $400 90.0%
88.0%
VOLATILITY $0 86.0%
1Q 10
3Q 10
1Q 11
3Q 11
1Q 12
3Q 12
1Q 13
3Q 13
1Q 14
3Q 14
1Q 15
3Q 15
1Q 16
3Q 16
1Q 17
3Q 17
1Q 18
3Q 18
1Q 19
3Q 19
1Q 20
3Q 20
1Q 21
3Q 21
of the Average Rolling
10-Year Returns of EFFECTIVE RENT OCCUPANCY
ALL MAJOR REAL
ESTATE SECTORS
9
The cost of owning a home is significantly higher than renting potentially creating more renter
households.8
RENT AND HOME PAYMENT TRENDS
$1,900
MONTHLY PAYMENT
Sources: $1,600 $311
6
Rosen Consulting Group, Housing
is Critical Infrastructure: Social and
$1,300
Economic Benefits of Building More
Housing, June 2021
7
Axiometrics Annual Market Trend Report, $1,000
Q3 2021
8
Marcus & Millichap, Five Multifamily
Investor Considerations Special Report $700
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
June 2021
9
National Council of Real Estate APARTMENT RENT HOME PAYMENT
Investment Fiduciaries, inception,
1.1.1978- 9.30.2021. Note: Mortgage payments based on quarterly median home price for a 30-year fixed mortgage, 90 percent LTV, insurance, and PMI
NORTHWEST FLORIDA BEACHES
INTERNATIONAL AIRPORT
BR 79 WEST, DST
10,600 STUDENTS
PIER PARK NO R TH PORT OF
PANAMA CITY
1,200 EMPLOYEES
PIER PARK
2,000 EMPLOYEES
TYNDALL AIR
FORCE BASE
REGIONAL OVERVIEW
The Property is located in Panama City Beach, Florida in Bay County, part of the Panama City Metro, PANAMA C IT Y M E T RO FAC T S
approximately 16 miles northwest of downtown Panama City located near the beach along US-98
and US-30. The Panama City Metro is known for its tourism, seeing more than 7 million tourists a The Panama City Metro’s economy is
year, given its favorable weather and sought after beaches. The Panama City Metro has been seeing forecasted to be 15% larger in 2025
significant growth with a current population of approximately 175,000 and continued population than it was in 2019, outpacing the
growth projected through 2026 and is expected to see an increase of average household income. national economy by 1.4%.13
This can be contributed to a strong employment market as well as enjoyable weather.10
The defense sector is a substantial stabilizing force for the local Panama City Metro economy. In The Panama City Metro’s total
total there are seven military installations in Bay County. Some of these bases include Tyndall Air employment growth through 2025 of
Force Base, Naval Support Activity Panama City, Naval Surface Warfare Center Panama City Division, 5.3% is expected to outperform the
and the Gulf of Mexico Range Complex. These four bases provide an economic impact of nearly national average.13
$1.4 billion and employ more than 13,000 military and civilian personnel. The prominent military The Panama City Metro sees more
presence has served as a catalyst for attracting research activity, defense contractors and aviation than seven million tourists per year.14
and aerospace related companies and suppliers. Nearly every nationally recognized defense
contractor has a presence in Bay County. 11 The Panama City Metro has an
The Northwest Florida Beaches International Airport, Port of Panama City, and Bay County’s average household income of more
location adjacent to the Interstate-10 Corridor makes the Panama City Metro a premier location than $77,000, which is expected to
for the logistics and manufacturing industry. Additionally, the Panama City Metro’s logistics and grow nearly 10% over the next five
manufacturing industry is seeing outsized growth with the addition of West Bay, a new regional years.10
economic center and master planned community by the St. Joe Company. The Panama City Metro
The Panama City Metro has a highly
is full of manufacturing companies and workforce talent.12
educated population with 24.9%
The Appraisal sums up the regional economy as one that will continue to remain stable. The of individuals over the age of 24
Panama City Metro area will continue to benefit from tourism and healthcare to catalyze near-term holding a college degree, including
employment and output growth. Over the long-term, the economy is expected to continue to benefit 9.2% of those with a graduate
from a strong military presence and optimal location for the manufacturing and logistics industries. degree.10
Sources: 10) Appraisal; 11) Bay County Economic Development Alliance; 12) Florida’s Great Northwest; 13) Oxford Economics; 14) Walker and Dunlop.
LOCAL OVERVIEW
Panama City Beach is located in Bay County, part of northwest Florida, between Tallahassee and Pensacola, and along the Gulf of Mexico coast. The
Panama City Metro is known for its white sandy beaches and warm weather.
Bay County sprawls across more than 1,030 square miles, including nearly 800 square miles of land. It is also home to 27 miles of coastline and is
positioned only 13 to 23 feet above sea level. The county is known for its favorable weather including 320 days of sunshine each year, average temperature
of more than 67 degrees Fahrenheit, and an average water temperature of nearly 72 degrees Fahrenheit. Additionally, Bay County is within 300 miles of
many major Southeastern United States cities including Atlanta, Georgia, Tallahassee, Florida, Jacksonville, Florida, and New Orleans, Louisiana.
Bay County is transitioning from a place commonly known for its tourism, to a place that is more attractive for commerce. In 2010, the county was
ranked as the #1 area for economic growth in the United States. Bay County offers many assets including the newest United States International
Airport, Northwest Florida Beaches International Airport, a growing deep water port, Port Panama City, and is home to the state’s youngest mean
population providing a young, energetic workforce.15
P I ER PA R K S HOPPI N G CEN TER
B R 79 WE S T, D S T
Sources: 15) Bay Economic Development Alliance.
Delaware
Statutory Trust
(DST)
BR 79 West, DST
ABOUT BLUEROCK VALUE EXCHANGE, LLC (“BVEX”)
BVEX is a national sponsor of syndicated 1031 exchange offerings with a focus on Class A assets that can deliver stable cash flows and have the potential for
value creation with more than $2.3 billion in prior syndicated 1031 exchange programs. BVEX is an affiliate of Bluerock Real Estate, L.L.C., a private equity real
estate investment firm with more than $11 billion in acquired and managed assets. Bluerock’s senior management team has an average of over 30 years investing
experience, with more than $48 billion real estate and capital markets experience and has helped launch leading real estate private and public company platforms.
ABOUT 1031 EXCHANGES
Section 1031 of the Internal Revenue Code (“Section 1031”) provides that, in general, no gain or loss shall be recognized on the exchange of like-kind real property
held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished
properties for one or more replacement properties of “like-kind,” while deferring the payment of federal income taxes and some state taxes on the transaction. There
are numerous Section 1031 rules and requirements, including, but not limited to: sellers cannot receive or control the net sales proceeds; replacement real property
must be like-kind to the relinquished real property; the replacement real property must be identified within 45 days from the sale of the property; the replacement real
property must be acquired within 180 days from the sale of the original real property; and the attributed debt placed or assumed on the real property must be equal
to or greater than the attributed debt on the relinquished real property to avoid boot.
RISK FACTORS
The securities offered herein are highly speculative and involve substantial risks. Do not acquire an Interest if you cannot afford to lose your entire investment.
Carefully consider the risks described below, as well as the other information in the Memorandum before making a decision to purchase an Interest. Consult with
your legal, tax and financial advisors about an investment in an Interest. The risks described below are not the only risks that may affect an investment in an Interest.
Additional risks and uncertainties that we do not presently know or have not identified may also materially and adversely affect the value of an Interest, the Property
or the performance of your investment. The risks of purchasing an Interest include, but are not limited to, the following:
the lack of liquidity of, or a public market for, the Interests; risks associated with Sponsor’s affiliate funding the Demand Note
that capitalizes the Master Tenant;
the holding of a beneficial interest in the Trust with no voting rights
with respect to the management or operations of the Trust or in risks relating to the terms of the financing for the Property, including
connection with the sale of the Property; the use of leverage;
risks associated with owning, financing, operating and leasing lack of diversity of investment;
multifamily apartment complex and real estate generally in and
the existence of various conflicts of interest among the Sponsor, the
around Panama City Metro;
Trusts, the Master Tenant, the Property Manager, and their affiliates;
the impact of an epidemic in the areas in which the Property is material tax risks, including treatment of the Interests for purposes
located or a Pandemic, which could severely disrupt the global of Code Section 1031 and the use of exchange funds to pay
economy; acquisition costs, which may result in taxable boot;
economic risks with a fluctuating U.S. and world economy; the Interests not being registered with the Securities and Exchange
performance of the Master Tenant under the Master Lease, including Commission (the “SEC”) or any state securities commissions;
the potential for the Master Tenant to defer a portion of rent payable
the lack of a public market for the Interests;
under the Master Lease;
risks relating to the costs of compliance with laws, rules and
the Trust depends on the Master Tenant for revenue, and the Master regulations applicable to the Property;
Tenant will depend on the residents for revenue. Any default by the
Master Tenant or the Subtenants will adversely affect the Trust’s risks related to competition from properties similar to and near the
operations; Property;
reliance on the Master Tenant (and the Property Manager (defined the Property is located in a “Hurricane Susceptible Region,” which
below) engaged by the Master Tenant, and the Property Sub-Manager increases the risk of damage to the Property; and
subcontracted by the Property Manager) to manage the Property; the possibility of environmental risks related to the Property.
Additional risks apply. See “Risk Factors” section of the Memorandum for a more detailed discussion of the risks associated with the Interests. All
terms capitalized, but not defined herein, shall have the meaning given in the Memorandum. Interests are offered to “accredited investors” only
pursuant to Rule 506(b) of Regulation D of the Securities Act of 1933. Past performance is not an indicator of future results.
For more Information, please contact your financial advisor or Bluerock Capital Markets LLC at 877.826.BLUE (2583)
Securities Offered Through Bluerock Capital Markets LLC
Member FINRA / SIPC | Affiliated with Bluerock Real Estate, L.L.C.
1345 AVENUE OF THE AMERICAS | 32ND FLOOR | NEW YORK, NY 10105 | BLUEROCKEXCHANGE.COM © 2022 Bluerock Real Estate | V-21-###
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