Project Summary

• Diversified Lending Solutions ("DLS") has been retained by Calvary Community Development Corporation (the ""Sponsor") to obtain $5.2M (74% LTC) construction loan to finance the construction of the 17,500 SF Breath of Life Community Center (the "Property" or "Subject") in Upper Marlboro, Maryland. Upon completion, the Property will include gymnasium space for use with basketball, volleyball, and youth sporting activities, as well as a fellowship hall, kitchen and administrative office. The surface parking lot will have 122 parking spaces. The Property was most recently appraised in February and May 2023, with as-completed values of $7.05M and $7.49M and as-is land valuations of $1.35M and $1.69M, respectively. In addition to the $1M of Sponsor equity derived from the increased land value, the Sponsor has funded more than $1.1M to-date into land acquisition, soft costs, financing costs, and predevelopment costs, and has reserved an additional $650K to fund fresh equity alongside the construction lender.
• The Property is already pre-leased to 5 tenants that represent $691,600 of year 1 revenues with rent escalations that will increase rents to $751,794 by year 5. The 5 pre-leased tenants detailed below are long-standing community staples with strong credit quality and leases with inferior properties that are charging higher equal lease rates: 1) Prince George's Department of Parks and Recreation (Anchor) 2) The Boys & Girls Club of Upper Marlboro (Anchor) 3) Calvary Chapel Breath of Life Church (Anchor) 4) The Hope Center Church (Inline) 5) Bodie Blast by Roxie (Inline) The anchor tenants are subject to leases that run for 10+ years and the inline tenants are subject to 5-year leases; all tenant occupancies will commence when construction of the Property is complete. The Hope Center Church, Bodie Blast by Roxie, and the Calvary Chapel Breath of Life Church (an affiliated entity of the Sponsor), have all been leasing space in school gymnasiums and will be relocating to the Property in order to capitalize on the opportunity to lock in long-term leases at a new facility and benefit from favorable pre-lease rates.

The Property

• The Property is a land parcel totaling 5.42 acres in the Westphalia area of Prince George’s County and in the Military Installation Overlay for Joint Base Andrews. The section of the Property with frontage on Westphalia Road has been partially cleared and fenced off. The site is zoned R-R (Rural Residential District) and allows for the proposed use as a community center. The Sponsor currently owns the Subject Property and has obtained the required permits and approvals to begin construction of the community center. Additionally, the Sponsor has negotiated a gross max price contract with Monarch Construction, a full-service commercial General Contractor to perform the construction and has retained BuildSol Construction, to act as its project manager.
• The Subject is located in a stable bedroom community of Washington, DC with median household income levels consistent with the state of Maryland and Prince George’s County. The location, near two major roads (Pennsylvania Avenue and the Capital Beltway), helps to make it accessible for the large congregation that will be traveling to the site. Local demand for religious houses of worship is buoyed by recently constructed residential development. The Marlboro Ridge by Toll Brothers, in addition to the Parkside at Westphalia and WestRidge at Westphalia, have collectively introduced hundreds of new homes to the area which are all a 5-10 minute drive from the Property. Similarly, Alexander Landing, directly across the street from the Property, and the Canter Creek Development (approx. 2 miles from the Subject), promise to bring 63 townhomes, and 410 single-family residential homes to the market, respectively.

Background

• The Sponsor acquired the site for $650,000 and has in total has contributed more than $1M+ to-date in equity towards land acquisition and various soft costs, including cleaning and clearing the site, architectural design, engineering, approved plans, consultant costs, permits, and financing costs. In connection with the transaction, the Sponsor previously obtained an $850K construction loan, which has now been paid down to $700,000 to date. The Sponsor is seeking to refinance the existing loan and obtain proceeds to complete construction of the Property. Debt service payments for the existing construction loan are current and the loan remains in good standing, but can now prepaid without penalty.

Sponsor

• The Calvary Community Development Corporation is a non-profit entity wholly owned by the Calvary Chapel, a non-denominational church that was founded in 1997 and provides fellowship meetings, bible study classes, and Sunday service to its growing congregation. The Calvary Community Development Corporation focuses exclusively on the community-based services and development that fall outside of the core spiritual focus of the Calvary Chapel.