Overview

739 N Wells is an investment opportunity in Chicago’s River North neighborhood. It’s situated close to The Loop—Chicago’s central business district—and Merchandise Mart. Further, it’s close to shopping on The Magnificent Mile, restaurants, and bars.

Long story short: it’s in the middle of everything.

This location’s bottom floor is zoned for commercial use and the building is being renovated as such. The owner is planning on gutting the building and turning it into a prime retail space with all expected modern amenities.

The building also has a guesthouse above the storefront. The owner leases this guesthouse to an agency that leases the space to short-term clients. This provides a preexisting stable source of income for the owner.

The bottom floor of 739 N Wells will be developed to be compliant with all local regulations. Blueprints have already been drafted. Currently, the owner’s plans assume a fashion client, so they include a dressing room, sales floor, and ADA compliant bathroom. The building also has a basement that will be used for general storage.

But that’s not set in stone. There is a backyard perfect for a patio or outdoor gallery. The right future client can easily turn 739 N Wells into a coffee shop or other light fare café. It’s an extremely versatile space that has endless opportunities for the right tenant.

Luckily, the owner has a tenant ready for move-in once the build-out is complete. This tenant is retail-focused, but needs the space to be built-out before the client can move in.

And that’s where you come in.

Now the client needs to secure funding to put its build-out plans into action. The owner is raising $250,000 on VestLo in exchange for a 6.68% stake in the building. The owner has elected to disperse $15,000 to VestLo investors quarterly in addition to the 6.68% ownership.

This listing is open to all Illinois residents.

Investment Highlights
  • Strong River North real estate market. The property is located in the hot River North neighborhood.
  • Potential to generate excess dividends. Investor forecasts to earn about 9% annually.
  • Equity upside. Because it’s a preferred stock investment, the investor participates in the equity upside of any building sale in the future. Future developments may include a rise buildout by future owner.
Area Data

River North is one of the densest neighborhoods in Chicago with 39,015 people per square mile. The average age of residents is just over 33 years old and the median income is just over $110,000, so there are thousands of young and wealthy residents at 739 N Wells’ doorstep.

Further, the area has high property values. The average value of a detached home in the River North area is over $1.5 million. Condos average $582,000 and buildings with five or more units average $416,000.

Further, this 3-floor space is located near the CTA Red, Brown, and Purple lines and a number of CTA buses. This provides easy connections to downtown mass transit centers and makes the retail space accessible for all Chicagoans.

Projected Return

The owner has elected to disperse $15,000 to VestLo investors annually in addition to the 6.68% ownership. Further, the owner projects 5.6% cash on cash return, with future years rising from 9.2% to 9.6%. The building value is projected to grow 2% annually.

Investors will earn 6% in preferred stock dividends annually. Investors will further earn excess dividends based off their pro-rata share of the year end free cash flows. Combining both the preferred stock and excess dividend, Investors are forecasted to receive an annual return above 9%.

2 Comments
Michael Thu Aug 23 2018 12:22:54

Arash, my name is Mike Horrell, please contact me via e-mail mbhorrell@mac.com and I can answer your questions with respect to this investment. I look forward to discussing this with you, The answers are to get the 6.68% of the buildings investors will need to invest $250,000 - (there must be a minimum raise of $125,000 in order to break escrow so investors would receive a 3.34% interest in the building, if the minimum is not raised your money will be returned to you) a preferred return of 6% will be paid annually on the amount that any investor invests, the projected amount is slightly above 7% for the first full year. The retail space will be $10,200 per month once the renovations are complete and store is a retail Women's store. Please do not hesitate to contact me. Mike Horrell

ArashTue Aug 21 2018 19:16:57

Hi, I want to reach out because I have a few questions because I am very interested investing in the property. Is there a minimum amount to invest in order to get a 6% in the building? And if the property were to sell, will I get 6% of the sales price? What store will be going into the first floor once the renovations are complete? How much is rent for the store on a monthly basis? Thank you for your time!

Leave a Comment

Please sign in in order to comment.

Risks

Investing in start-ups and small businesses involves a high degree of risk and should not be done by anyone who cannot afford to lose their entire investment. Investors in these securities must acknowledge that these investments are illiquid, susceptible to future dilution, and my not generate any returns.