AZNORTH COMPANIES
and Affiliates
www.aznorth.com
ABOUT US Company Overview Corporate Philosophy Management Team Professional Advisors Organization
REAL ESTATE SERVICES Investment Development Construction Property Management Brokerage INVESTMENT PRODUCTS Private Capital Investment Institutional Capital Partners
PROPERTIES COMPLETED AND RETAINED Investment Strategies
Rentals Hotel Office Land
PROPERTIES UNDER DEVELOPMENT Residential under development
Under entitlement
DEVELOPMENT OPPORTUNITIES Flagstaff and Kingman
Yavapai County
PROPERTIES COMPLETED AND SOLD UNIQUE ATTRIBUTES OF THE AREA UNIQUE ATTRIBUTES OF THE COMPANY
ABOUT US
• Company Overview
The AZNORTH Companies are a group of affiliated entities engaged in real estate investment, development and management, headquartered in Flagstaff, Arizona with operations also in Yavapai County (Camp Verde). The history of the AZNORTH Companies began in 1993 when Thomas Brewster started acquiring, developing, and managing Flagstaff Area real estate. Since then, the companies have:
Developed a dominant market position by creating a full-service operating platform to provide homeowners and private and institutional investors with exceptional service and investment performance.
Developed capabilities that include land acquisition, entitlement, development, property acquisitions, value-added asset
management, and high quality property management.
Developed an experienced asset and property management team that manage an extensive portfolio of properties throughout the Flagstaff area, and increasingly in Yavapai County.
The AZNORTH portfolio includes land under entitlement for custom home buyers, raw land, rental single-family homes, townhouses, condominiums, multi-plex office, retail, and hotel property types.
For a description of the portfolio, please see the Exhibit B, Property
Information.
• Corporate Philosophy
“Diversification within a Defined Market” – AZNORTH will continue to diversify into a variety of income producing real estate vehicles. The reason this business philosophy is appropriate versus having real estate holdings of like type in different regions, is that it is much more effective to manage and control the returns. This philosophy would only work in areas like Northern Arizona where there is stable controlled growth with limited land available. AZNORTH is ready to take this next step to grow our company and provide exceptional returns to customers, our investors and service to our community.
• Management Team
AZNORTH has assembled a highly skilled team of real estate
professionals with many years of service to our community and the real estate industry. Senior management includes individuals with decades of practical experience as well as professional training in business and real estate and advanced management skills and techniques. Our principals have long-standing involvement in the real estate industry, including leadership roles in local and state trade groups, such as the Northern Arizona Builders Association.
Thomas M. Brewster, President and CEO, Owner, Over 20 years real estate and construction experience. Responsible for all corporate dealings and operations since 1993. Arizona licensed Real Estate Broker, active in
development and investments in Northern Arizona for many years. Self-employed Arizona licensed commercial communications contractor in central and northern Arizona from 1987 to 1990. Self-employed partner in investment rental properties in Tucson, Arizona from 1986 to 1990.
Russ Muellenberg, Vice President – Project Research and Acquisition, Over 20 years real estate and marketing experience. Arizona licensed Real Estate Broker. B.A in Marketing and Business management
Northern State College, South Dakota. Marketing General Manager in the tire and automotive industry from 1985 to 1995.
Jeremy Bach, Vice President − Construction Project Manager, 14 years in the construction management industry. Responsible for all construction management.
B.A. in Construction Management and Business Management, Northern Arizona University. Partner in certain development projects.
Jennifer Clark, Controller − 10 years with AZNORTH. Bachelor of Science from Ithaca College, New York
Stefan Nikolai, Marketing Director and Broker AZNORTH Brokerage, 7 years in the real estate industry. Bachelor of Arts from Northern Illinois University. Bachelor of Science from Northern Illinois University.
Bob Shute, Development Controller − Over 20 years management in Northern Arizona.
Associate Degree from Waseca College, Minnesota. Myriad of management training courses.
Elaine Riggs, Accounting
Bachelors of Science in Business Administration from University of Phoenix. Over 10 Years experience in Accounting. Currently pursuing her M.B.A.
Adrien Gonzalez, Financial Analyst
B.S.B.A. Duel Major in Finance and Business Economics at Northern Arizona University with a concentration in Corporate Finance. Licensed real estate professional within the State of Arizona. Completed appraisal courses, including U.S.P.A.P. certification, in compliance with Arizona appraisal licensing laws.
Nancy Holmgren
Licensed real estate professional within the State of Arizona. Twenty-four years of property management experience. Currently maintaining high level of occupancy and great resident relations.
Professional Advisors Celia Barotz, Consultant
Bachelors of Science with Honors from University of Vermont and Juris Doctorate from Tulane University. Member of Connecticut Bar
portfolio of commercial and residential real estate. Appointed to serve as a Commissioner on the Coconino County Planning and Zoning
Commission in 2001. Appointed by Flagstaff City Council to serve as a Commissioner on the Flagstaff Planning and Zoning Commission in 2006. Currently serves as representative of the Planning and Zoning
Commission on both the City of Flagstaff Open Spaces and Water Commissions. Celia has been the director of the Alternative Dispute Resolution (ADR) Program for Coconino County Superior Court where she mediated a variety of court cases, including disputes arising out of real estate transactions. Member of the Professional Standards Committee of the Arizona Association of REALTORS®. Serves on arbitration panels that hear disputes between REALTORS®. Celia is currently the Treasurer of the Board of Directors of Habitat for Humanity of Flagstaff.
Legal Counsel, Tony S. Cullum P.C., a Certified Real Estate Specialist with emphasis on relocations and development.
Accountant, Loren Cunningham, CPA, PLLC, provides audits of the AZNORTH Companies.
• Organization
AZNORTH Companies began operations in 1993 in the State of Arizona. AZNORTH Development, Inc. is the chief operating company
under the AZNORTH umbrella. This company is focused on making aggressive, hands-on property development operating decisions. Senior management includes individuals with decades of practical experience as well as professional training in business and real estate and advanced management skills and techniques. Our principals have long-standing involvement in the real estate industry.
AZNORTH Realty is a full service Arizona licensed real estate broker providing sales and marketing for the AZNORTH Companies as well as the General Public.
AZNORTH Investments, LLC was founded in 1997 in order to provide a vehicle for the principals of the AZNORTH Companies to invest in and manage the assets within the portfolio. In that
capacity, the LLC typically functions as a "member manager" of investment entities (Limited Liability Companies) formed to acquire, complete and stabilize investments and/or development
opportunities. The LLC generally invests in each property acquired for the portfolio, and participates in the economic success of an investment through its participation in the management of the asset. Through this approach, the principals of the AZNORTH Companies view opportunities for investment and the ongoing management issues from the perspective of owner and manager. Investment Partnerships:
o AZNORTH Enterprises LLC o Forest Ring LLC
REAL ESTATE SERVICES • Investment
The AZNORTH Companies have assembled an experienced group of professionals with decades of "hands-on" real estate investment experience in all phases of real estate development, investment and management. In addition to the land acquisition, entitlement, and development business, AZNORTH's acquisition professionals have acquired over $38.8 million in high quality real estate, including office, retail, single family homes, townhouses, and condominiums. The group is experienced in both core and value-added investments for both private capital and institutional investors. On many of our investments, we
reposition the property and have added value through extensive physical upgrading and re-focused marketing efforts.
• Development
Over its history and in response to market conditions, the AZNORTH Companies have completed successful development projects across our target product types, including high quality office, rental houses,
townhouses, condominiums, and in-fill (mixed?) use. Current development efforts are focused on high-quality single-family, including both rental and for-sale product, in urban Flagstaff in-fill sites. Typically, these
development efforts originate with a complex set of municipal approvals to obtain necessary entitlements. Securing these approvals requires an expertise in which we are both very current and highly experienced. This expertise provides the Company an important competitive advantage when it considers land acquisition and development opportunities. These projects include both rental and "for sale" product types, generally oriented toward second-home buyers and renters. Ground floor retail is a
component of several projects. A list of current development projects can be found in Exhibit __, Property Information.
• Construction
The AZNORTH Companies either act as general contractor or contract with third party general and sub-contractors for all construction, from tenant improvements to ground-up construction. Within the Company team, we have seasoned professionals who exercise significant oversight in the construction planning, budgeting and execution process. These individuals enable us to maintain adequate quality control as well as managing budgets, change orders, scheduling and related facets of the construction process.
• Property Management
The AZNORTH Companies dedicate multiple professionals to the operational execution of the asset management plan for our properties. We believe the best way to maximize cash flow, appreciation and preservation of capital in real estate investments is to make aggressive, hands-on property management an important element of the investment management process. By managing the day-to-day operation of every property, including its marketing, maintenance and administration, we ensure that we meet the long-term interest of each property's owners and
investors. With individual experience in marketing, budgeting, sales, tenant relations and maintenance, the members of our management team work closely with our Company's legal, accounting, and maintenance experts to maximize each property's operating performance. Over time, we have proven that our intensive property supervision and asset management make a valuable difference in investment performance. • Brokerage
Our full service Arizona licensed real estate brokerage provides sales and marketing for the AZNORTH Companies and for the General Public. PROPERTIES COMPLETED AND RETAINED
• Please see our website at www.aznorth.com PROPERTIES UNDER DEVELOPMENT
• Please see our website at www.aznorth.com DEVELOPMENT OPPORTUNITIES
• Flagstaff and Northern Arizona
The State of Arizona is deciding what is developable and what is preserved for 4 parcels in the Flagstaff area: one a full section (640 acres) and the other 3 are half-sections. The public votes on these matters. The Company has some 160 acres of land to trade with the U.S. Forest Service for urban-wildlife interface land near Flagstaff. Williams (35 miles from Flagstaff) and Winslow (58 miles from Flagstaff) are the only other bedroom communities for the City of Flagstaff.
• Yavapai County
PROPERTIES COMPLETED AND SOLD UNIQUE ATTRIBUTES OF THE AREA
• Rapidly dwindling supply of privately owned land in and around Flagstaff, Arizona. Only 13.3% of Coconino County land is owned privately. The remainder is owned by tribal nations (46%), US Forest Service and Bureau of Land Management (32%), the State of Arizona (9.5%), and other public entities (6.8%). Flagstaff’s growth boundaries are defined by surrounding public lands and contain an even more limited and rapidly diminishing amount of available privately-owned land. See Exhibit
4-D, Land For Development.
• Sharply increasing demand in and around Flagstaff. The national housing requirements will continue to put pressure on the Arizona market, causing it to be the fastest growing state in the country. With all of this record growth, the population in the deserts will continue to drive demand
in the mountain communities for generations to come. As the only major city in the mountains, Flagstaff will continue to appreciate as the rest of the state grows. Currently, 26% of Flagstaff’s housing stock is owned by part time residents whose principle residences are located elsewhere, predominately in the Phoenix Metropolitan area. Phoenix is the nation’s fastest growing city and along with its growth will come additional demand for seasonal housing of all types in Flagstaff, Coconino Country and Yavapai County. (For more information on Flagstaff and detail, see Exhibit Market Study)
• Increasing pressure on local government to promote controlled, environmentally friendly growth to preserve the natural beauty and lifestyle profile of the community. AZNORTH has significant expertise and success with the complexities of the process and maintains close and current relationships with local government and community leaders. The Company’s projects are traditionally well received by local governing boards.
• Very large parcels of undeveloped land are no longer available in Flagstaff making it an unattractive market for the region’s larger production builders who focus on Phoenix and Tucson.
• Stable Market Niche. Northern Arizona for the last 30 years has demonstrated a stable 3% to 7% growth. This area is projected to double in population by the year 2020. Phoenix supports the base of Flagstaff’s growth. Due to the attraction of mountain communities, cool pines and tourism, a large number of second homes are frequently purchased. The local government continues to promote controlled, environmentally friendly industry and growth.
• Second Home Market. More than 26% of the homes in Flagstaff are second homes. The second home ownership is a driving force in our market because of the pressure put on the supply by the demand statewide.
For more information see Exhibit G.1. About Flagstaff, Coconino County and
Yavapai County, Arizona and Exhibit G.2.
UNIQUE ATTRIBUTES OF THE COMPANY
AZNORTH and its affiliates are uniquely poised to capitalize on the convergence of powerful value trends in the communities it serves.
Armed with a competitive advantage gained over its history, unparalleled expertise with local entitlement issues, and a market-smart commitment to institutional quality investment opportunities, AZNORTH and its affiliates will pursue a plan of purchasing and developing a significant amount of the remaining, privately-held land within the growth boundary of Flagstaff, Arizona, and also increase its development activities in nearby Yavapai County, Arizona.
• AZNORTH is sized and skilled at exactly the right levels to meet the increasing needs of the community it serves. The Company is large enough to undertake 1,000 unit housing complexes or multi-use commercial developments, but also sufficiently nimble to respond quickly
in building successful, smaller developments when lots become available. • AZNORTH is working in concert with community leaders to revision
Flagstaff’s future land use profile. Infill projects and redevelopment of existing structures will round out Flagstaff’s goal of providing affordable housing through an environmentally sensitive, smart and sustainable growth model. AZNORTH is actively engaged as a process partner, and anticipates significant investment potentials in redevelopment and added value repositioning of existing properties.
• AZNORTH’s management team have earned substantial goodwill over its history. Its projects, products and communities are well received, and new projects are highly anticipated.
Other attributes include:
• Company Growth. With more than 10 years of continued growth, AZNORTH has positioned itself as the leading developer in the Flagstaff marketplace, providing exceptional service to fulfill the expanding needs of the community.
• Government Relationships and Policy/Growth. AZNORTH’S professional team works in unison with local governments and understands and supports the area growth plan. Due to the beauty and unique landscape of northern Arizona there is a propensity to manage growth. It is imperative to stay informed and maintain relationships with local governments and communities. Typical projects take anywhere from six to twelve months longer than national averages for approval and more concessions are usually necessary.
• Management Team and Local Government. Our well-regarded management team works in concert with local government to produce smart growth and affordable housing. We also have an office and development team in Yavapai County (Camp Verde) Arizona. AZNORTH plans to continue to purchase and develop a significant amount of remaining privately held land within the growth boundary of the city of Flagstaff, Arizona.
• Marketing Strategy. AZNORTH has invested 12 years marketing the Company and developing relationships in northern Arizona communities. AZNORTH Realty has developed a professional team to market our projects.
• Competitive Advantage. Our midsize company optimizes the profitability and efficiencies; our growth is moderate and steady. Our expertise is producing a higher quality product more affordably. The number of housing starts seems to constantly fall short of demand in northern Arizona. There are a number of small builders that do a good job to provide housing. A larger developer that develops large tracts of homes in larger communities won’t find northern Arizona as viable because of a lack of available land coupled with the volume of sales necessary in a short period of time is not possible. Flagstaff does not encourage large growth that would promote large developments and developers.
• Flexible Business Model. Maintain an appropriate cash position so we can maintain, sell or rent real estate inventories to keep in step with market cycles. This will allow us to capitalize on any market conditions. • Diversification within a Defined Market. AZNORTH will continue to
reason this business philosophy is appropriate versus having real estate holdings of like type in different regions, is that it is much more effective to manage and control the returns. This philosophy would only work in areas like Flagstaff, Arizona where there is stable controlled growth with limited land available. AZNORTH is ready to take this next step to grow our company and provide exceptional returns to our investors and service to our community.
Contact Information: Tom Brewster, President AZNORTH Development, Inc. 2410 East Route 66
Flagstaff, AZ 86001 (928) 774-6637 [email protected]
Jeremy Bach, Vice President AZNORTH Development, Inc. 725 Howards Road - Suite B Camp Verde, AZ 86322 (928) 567-2964
