Golden State Value Fund I
Executive Summary
$25,000,000 Placement
PROPRIETARY AND CONFIDENTIAL
This Executive Summary is being issued by Golden State Value Fund II, LLC (interchangeably referred to herein as the “Company” and/or the “Fund”), a California limited liability company, in connection with the offering (the “Offering”) of a minimum of 200 units and a maximum of 1,000 units of membership interests (a “Unit” or “Units”), at a price of $25,000 per Unit, for a total minimum offering of $5,000,000 and total maximum offering of $25,000,000. Prospective investors may subscribe for a minimum of 10 Units (totaling $250,000) and a maximum of 500 units ($12,500,000). This Executive Summary is qualified in its entirety by the more detailed information appearing in the Private Placement Memorandum dated June 1, 2006.
The Company
The Golden State Value Fund I, LLC has been established as an investment fund to invest in real estate and real estate projects primarily located in the state of California and specifically the greater Sacramento region. The Manager has a strong track record of identifying and investing in real estate and real estate projects in this trade area and believes there exist many opportunities for sound investment today.
The Manager of the Fund, Woodbridge Realty Advisors, LLC (“Manager”) will be controlled, managed and operated by William T. Lappas (see manager bio info below). Mr. Lappas began investing in real estate in Northern California during the late 1980’s real estate market downturn. Mr. Lappas owns and/or manages a variety of property types including vineyards, commercial land, industrial and commercial office. Additional information can be found in the manager’s bio herein.
Mission Statement
The Golden State Value Funds target the acquisition of value-added, opportunistic, and undervalued real estate and real estate related projects and investments for the benefit of qualified institutions and high net worth investors. Our team is dedicated to building value for our investors by acquiring fundamentally good real estate, at an opportunistic price, and utilizing our expertise to create significant value.
THE INVESTMENT STRATEGY
The fund has been created to invest in real estate that the Manager believes to have the following characteristics; i) prime locations in the path of growth, ii) price substantially below the managers perceived value; iii) a desirable location for future commercial and/or residential development. The Fund investment strategy is designed to take advantage of two separate and unique opportunities that the Manager believes will diversify the portfolio and provide both short term and longer term growth and income for investors. These unique opportunities are created utilizing a combination of short term and long term hold periods. Whereas most funds in this arena generally focus on either long term or short term, this fund will utilize a combination of both holding periods. The benefit to the investor is a reward of short term investment profits while employing the necessary discipline to realize longer term investment profits. The Manager has observed, and participated in, long term real estate investments that have had very successful outcomes. The Manager believes that regardless of short term trends, which will vary from time to time, the longer term trends of California real estate are very strong and definable.
The Manager will utilize proprietary research model to locate and identify properties that meet strict parameters that have been outlined for investment. These same strategic parameters have enabled the Manager to make successful investments in the past. The Manager believes that the dual strategy of the fund will provide for the investor a long term investment that may also distribute monies each year beginning after the second year.
As investments mature and properties are sold, capital will be distributed to the investors, in accordance with the terms of the Memorandum and the Operating Agreement. The Manager will not be reinvesting the capital of maturing investments.
Woodbridge Realty Advisors has a well established reputation as a value oriented and value added investor focusing on real estate and projects that are inefficiently priced. The investment funds managed by Woodbridge share a common strategy of investing at an opportunistic time and generating absolute returns that are not correlated to the broader real estate market cycles.
Current Real Estate Market Outlook
California is the largest and fastest growing state in America, with many of the top growing cities within the State’s borders. The U.S. is poised for another huge wave of urban growth. Researchers predict that the bulk of that development will occur in and around 10 megapolitans, which are home to more than two-thirds of the U.S. population. The populations in these 10 megapolitans are expected to grow more than 25% in the next 25 years, spurring more than $25 trillion worth of development. The Sacramento region is one of the top ten high growth megapolitans in America. “The action is moving east from the Bay Area and the Sacramento region will build more housing and office space than any other western city except Las Vegas”.
The California real estate market is slowing in certain sectors. The manager believes that when sectors slow opportunities are created. The manager believes that if the market continues to slow high quality properties will be available at very favorable prices. In the past market corrections have been excellent times to invest in land in California.
The Manager believes that, much like Southern California, Northern California will become one large metropolis stretching from San Francisco east to the Sacramento region. In the past, severe distress in the real estate market created opportunities for the wise and patient investor. The Manager views the current downturn as an opportunity to make smart investments in the future growth of California.
The Golden State Value Fund series is designed to take advantage of the market inefficiencies in the Sacramento region’s real estate market. The fund will make opportunistic investments in land, and real estate projects, within, and in the growth path of, the greater Sacramento region.
The Manager
Woodbridge Realty Advisors, LLC, a California limited liability company, is the real estate division of Woodbridge Capital Partners, LLC (“WCP”) a registered investment advisor. WCP is registered with the State of California and the NASD. WCP manages investments for the principles and clients as well as overseeing the operations of The Axios Fund L.P., a fund of hedge funds.
The Golden State Value Fund is a series of real estate investment funds sponsored by Woodbridge Realty Advisors, LLC.
The Manager has developed many strategic relationships with real estate professionals. Land owners, and land developers in California and specifically this trade area. These strategic relationships are an important asset in each geographical trade area that the Manager believes to be of high value. The manager benefits from the wisdom and knowledge that these advisors share from their many decades of experience in investing and developing land.
Together, our team of professionals are dedicated to the fundamental principle of building value for our investors.
William Lappas, General Partner Woodbridge Realty Advisors, LLC
The Manager of the Fund is Mr. William T. Lappas. Mr. Lappas is a native of Los Angeles, California. In 1987 Mr. Lappas began a successful career of managing investments as a registered financial consultant with Citigroup/Smith Barney in Beverly Hills. Mr. Lappas was also a senior vice president with PaineWebber (UBS), and Morgan Stanley. In 2002, Mr. Lappas founded Woodbridge Capital Partners and Woodbridge Realty Advisors. Mr. Lappas is also a founder and director of Community Business Bank (communitybizbank.com) of Sacramento. In 2005 “CBB” raised $20,000,000 in capital and went public. CBB currently operates 3 branches in California; Sacramento, Roseville, and Lodi. The Sacramento Business Journal recently listed CBB as the 17th largest public company in the Sacramento region.
Mr. Lappas is active in various philanthropic and non-profit organizations and is a
member of The Urban Land Institute (ULI) and the International Council of Shopping
Centers (ICSC).
Previous Investment Funds
Woodbridge Realty Advisors sponsored two investment funds in 2005, Woodbridge Realty Advisors I and II. Both investment funds invested in real estate in the Northern California/Sacramento region. Woodbridge I is currently negotiating a sale/lease with an end user and has a valuation in excess of 100% gross return in the 3 years the fund has operated. Woodbridge II is currently liquidating with a gross return of 100% in a 3 year investment period.
Investment period and Target Rate of Return
The sponsor anticipates a hold period of 3–7 years depending upon each properties characteristics and the market cycle. The goal of the fund is to achieve net internal rates of return to the investor in excess of 20% per annum during the life of the fund.
