May 2nd, 2018
We’re proud to announce a new tokenized fund on Swarm – Viejo San Juan: the VSJ Token.
Viejo San Juan Comunidad RE Fund is founded by resident Puerto Ricans on the belief that Old San Juan offers a unique opportunity for investment, with a lifestyle offering that will continue to attract new residents as arguably the most livable urban neighborhood in America. VSJ’s channeling of investments into the Old Town will buttress the culture and lifestyle of this historical Caribbean setting. The founders of the Fund view the investments from a social impact perspective, while mindful of the IRR.
The Fund has targeted, and is in contract with properties for both redevelopment and current rental income. In particular, the Fund intends to redevelop a landmark building for the crypto/blockchain community.
Strategy / Model
There is a heady renewal going on in historical Old San Juan real estate. Old San Juan is a unique and distinct community from Greater San Juan. The Viejo San Juan Comunidad RE Fund will focus on commercial properties in Old San Juan and Paseo de Puerta Tierra with opportunistic investments in residential properties, and in farmland to provide a regular pipeline of organic produce for VSJ residents and restaurants.
The VSJ Fund is differentiated by its strategy of matching building development to end users. As an example; a 17,000 sq ft ocean view warehouse is being renovated by a new rum distillery as a tourist destination for the cruise port. The Rum company is financing the renovation of the building with an agreed upon mark-up to The VSJ Fund and a long-term lease to the VSJ Fund. The strategy being not to develop or invest in properties that are pre-leased/sold.
A cornerstone investment of the Fund is a property with commanding presence in the heart of Viejo San Juan to cater to the crypto/blockchain community, offering premium office space at current market lease rates. This target has not entered into contract pending lining up companies to lease the space.
Complementing the urban properties is the purchase 44.6 acres (48 cuerdas) of excellent fallow farmland in Las Marias, about 25 minutes from Mayaguez to grow organic produce for sale at the Mercado Agricola Natural in Viejo San Juan, thus adding an element of urban self-sufficiency. This property is in contract and is an exception to the pre-lease strategy, but at it is being funded through an EB-5 investment, it will create 10 full time jobs.
While the Fund is acquiring properties for current cash flow, rejuvenation and capital appreciation following a portfolio optimization approach, there is also a conscious impact investment aspect to the Fund.
The partnership with Mercy Zayas, founder of Value Added Commercial Real Estate Services, PSC, the Fund has access to several “off market” properties and benefits from Mercy’s decades of experience in the neighborhood, the Fund a competitive advantage
Target acquisitions are posted in the Fund’s data room on InPortal.
Special Benefits for Investors
Acknowledging that in addition to lifestyle, the Act 20-22 tax incentives are a significant draw to Puerto Rico. Each initial investor with a minimum purchase of a USD $100,000 equivalent coin will be entitled to a filing for either an Act 20 or Act 22. For non-US residents, for a minimum USD $550,000 equivalent in Tokens will entitle initial investors to an EB-5 I-526 Visa filing. The investments for the fund are structured individually so as to permit an EB-5 I-526 Petition to be filed immediately following the investment. However, the number of I-526 Petitions will be limited on a first-investor-in basis by the ten jobs created per investor criteria. Token holders will also have access to the 44-acre organic farm.
In addition to the legal work for the tax and visa submissions, participants in the Viejo San Juan Comunidad Fund will have preferential access to AirBnB properties, no-escalation office leases at current rates, and input on the farm practices.
Click here to learn more about the VSJ Token – including the market, return profile, track record, and risk assessment – inside the Swarm Marketplace.