Frequently Asked Questions

You can make money from a CityVest opportunity in two ways: 1) distributed cash flow from each of your properties or funds and 2) profit when the property is liquidated. You may also receive certain tax benefits associated with property depreciation.

The typical investment will seek to achieve a 10% to 25% rate of return over the life of the investment. This return may include an annual interest or other distribution from the investment, and sometimes this payment may include a preferred return structure. In addition you may get a payment of profits after the property is sold.

CityVest is focused on real estate investment funds that have a track record of audited investment returns, strong property and asset management capabilities, reputable service providers (such as auditors, administrators, banking and financing relationships), and good relationships with prior limited and joint venture equity partners. We will generally only take on investment managers that are on their second, third or fourth fund and can provide detailed evidence of prior experience and capability in the geography and niche focus of the fund for which they are seeking to raise capital. The lead members of the investment manager must clear a criminal and credit check with no felonies, OFAC or SEC violations. The investment manager must also invest in no less than 1% of the targeted value of the fund.

You are typically investing in shares or membership interests in a limited liability company established by CityVest. In turn, that LLC owns (directly or indirectly), along with the sponsor and other investors, a share of a joint venture entity that owns a specific investment property, like a specific apartment building. An LLC gives you liability protection, shielding your personal assets from the investment. Please find more detailed investment information and risk disclosure in the investment memorandum, presentation or operating agreement for your investment. Potential investors are strongly urged to read the complete set of closing documents in its entirety prior to investing.

CityVest is focused on investing in real estate investments originated by strong sponsors. Strong sponsors may possess many of the following attributes: (1) verifiable track record of prior sponsored deals amounting to at least $10 million of transactions and 3 deal in last 3 years. (2) the sponsor’s current transaction must be in a similar geography and property type as their past deals, (3) the sponsor must possess strong property and asset management capabilities, (4) have reputable service providers (such as auditors, administrators, banking and financing relationships), (5) good relationships with prior limited and joint venture equity partners, (6) invest 10% of the equity of the deal, net of sponsor transaction fees, (7) clear a criminal and credit check with no felonies, OFAC or SEC violations. Regarding the sponsor’s property, it must have (1) financial reports indicating a history of positive cash flow performance, (2) strong indications that the property's positive performance will continue for at least the next five years related to geography, demographics or a value add component, and (3) the properties should produce a targeted preferred return of 6% to 10% with a targeted IRR of 10% to 20%.

Decisions in an LLC are governed by a document called an “operating agreement”. While every operating agreement is slightly different, they usually include a manager (who may also be a member) and limited members. The manager, such as CV Manager LLC, typically makes all of the day-to-day decisions and the limited members act as passive investors on the transaction. The manager can determine how much cash to distribute to the limited members versus how much to hold in reserve and assess possible sales for the property. There are certain activities that might mandate a vote by the limited members and the limited members can typically take action if the managing member defaults on the terms of the agreement or is grossly negligent.

No secondary market currently exists for your investment. You should assume that you will not be able to retrieve your investment prior to the scheduled liquidation date. Further, the investment is considered a “restricted securities” and are not being registered under federal or state securities laws. As such, they may not be resold or transferred unless they are so registered or qualify for an exemption therefrom. CityVest will endeavor to assist each investor in locating a buyer of their investment interest should the need for liquidity arise prior to the realization on an investment.

The exact amount should be specified in the investment presentation. Generally, sponsor's and investment manager's contributions account for five to twenty percent of the total amount of equity invested in the investment.

Your investment involves substantial risk including risks to the value of the property at the time of its liquidation. See Risks.

REITs can be liquid investments and are often traded on public exchanges making them subject to the ups and downs of the equity markets. REITs cannot pass through any of the tax benefits that are so attractive in real estate investments. CityVest shares none of this type of market risk as primary real estate asset prices are less correlated with the Dow Jones or other comparable equity markets. REITs are similar to mutual funds in that they are directed by asset managers with broad authority to buy, sell, or restructure properties within the fund and without your consent. REITs generally have a range of different properties that they are investing in. In the case of a CityVest investment in a specific property, you will know details about that specific property. In the case of a CityVest investment in a real estate private equity fund, you will know the track record, strategy and focus of the investment manager, but you will not know the specific details of their investments prior to your investment. However, unlike a REIT investment, a real estate private equity fund will provide a pass through of certain tax benefits to investors.

Real estate investments are generally funded mostly by mortgage debt due to the low cost of financing. Debt or “leverage” increases returns to equity holders, while also making the project more risky. We expect that CityVest investments will be partially funded with debt, this information will be clearly detailed in each projects presentation. Principal and interest payments due under the mortgage will be paid through rental income generated from the property and will not be your liability or owed by you.

CityVest investments general do not have capital calls, meaning investors are not required to commit more money to the property beyond their initial investments. Rather than requiring an additional investment, it is possible that investors may be diluted if more money needs to be raised. It is also possible that the property may be sold.

When you invest in a CityVest investment, you own a membership interest in a limited liability company (LLC). That LLC will invest in either the entity that is acquiring the property or the real estate private equity fund. CityVest does not usually provide direct real estate investment opportunities that have a mortgage lien or collateral securing the investment.

CityVest seeks to find its investment opportunities through experienced real estate sponsors or investment manager of real estate private equity funds. The sponsors or investment managers will conduct due diligence and analysis on the property, structure the investment and arrange for mortgage financing.