#nu Capital is a boutique development and investment company specialising in the West London residential property market. We are passionate about providing a personal approach and drawing upon unrivalled relationships with suppliers, private investors and property establishments in order to deliver full-service bespoke prospects. #nu Capital looks to create investments for our joint venture partners using our extensive knowledge and experience of the prime West London property market.
Headed by Nick Jeffries and Zak Hussain, dynamic teams are brought together to design and develop exceptional projects by in-house architects, interior designers and project managers. Nick’s real estate background stretches over 15 years in the West London residential property market. With extensive knowledge of the industry and a specialism that largely implicates construction knowledge and packaging investment opportunities in the most strategic, calculated manner to meet the full spectrum of every investor’s needs. Zak has over 10 years of experience in the construction industry, covering projects from new build and heavy structural refurbishment through to complex Cat A and Cat B fit-outs. He has previously run his own construction businesses and has the skill set to help grow and make a business more commercially viable.
By continually increasing properties’ performances through high-end renovations, partners and investors are empowered to decide on the best way to leverage key strengths such as extensive local expertise around the West London areas of Fulham, Chelsea, Mayfair, Knightsbridge and Belgravia. #nu Capital guides clients throughout every property and infrastructure phase from drawings to development, investment management, project management and construction, as well as asset and property management or chooses to partner with you right through the complete journey.
We guide clients and investors, going above and beyond, to deliver excellence in full-service property development. Private investors and end-users are welcomed to maximise value, and ultimately innovative, sustainable returns on refurbishments, basements and new builds.
#nu is a real estate investment firm focused on in short to intermediate-term real estate investments that are highly likely to generate double-digit IRRs.In the past, we have used a number of different strategies to achieve our real estate objectives:
▶ Purchasing under-priced assets during market distress
▶ Residential permitting and refurbishment: Adding square footage through additions, basements,airspace-rights & optimal designs
▶ Repositioning assets to highest and best use (i.e.retail changed to residential)
▶ Lending to small investors who are capital-starved
PURCHASING UNDER-PRICED ASSETS DURING MARKET DISTRESS
During the financial crisis of 2009, there were many properties where our principals were the only bidder. Situations like this allow for “bottom-fishing”. During a panic, investors often are forced to sell at any price. Every 10 or 20 years, real estate can sometimes be purchased at discounts to replacement costs. Our experience is that during a capital crisis, over 1% of sellers make a significant pricing error and panic because there is only one bidder during that time frame. The aftermath of Covid-19 is one possible environment where it’s possible the market freezes up for a year and there are massive discounts. In the last downturn, our partners were able to obtain 5 properties that could be sold at a profit a week later. Profits ranged from 5% to 30%. Some people like flips, but a better strategy for these “great buys” is to wait a few years until the market normalizes – it’s not unusual to double your money unlevered in 2 or 3 years – a reasonable loan can increase these returns to equity capital. Providing liquidity in times of short term crisis generally leads to high returns.
RESIDENTIAL PERMITTING & REFURBISHMENT VIA SQUARE FOOTAGE ADDITIONS
Adding residential square footage is a somewhat scalable strategy as there are many opportunities in all markets. For example, a London basement addition might cost £400-£550 per square foot to build but reasonably be expected to sell for £1000-£1500 per square foot. A typical project might entail purchasing a 1500 square foot property for 800 £/sqft for £1.3 million after VAT, refurbishing and adding a 1000 square foot basement for £700,000 and selling it for £2.5 to £2.8 million. On the low end, you can always resell it for breakeven, and in normal markets with a 40% equity and 60% debt ratio, a reasonable profit of £600,000 on an £800,000 equity investment is achievable in 2 years or less.
REPOSITIONING PROPERTY TO HIGHEST AND BEST USE
Repositioning a building is not common, but it can exploit large price differentials between different property types. NU Capital will search for retail properties that can be repositioned into higher-value categories. It may be possible to buy some retail properties at £500 per square foot, invest £250 in converting to residential use, and sell at £1,200 per square foot.
HARD MONEY LENDING
Capital starved developers often prefer to finance transactions outside the banking system with high-interest rate lenders who can finance deals with as little as a week’s notice. Typical deal structures will have 70% to 80% debt-to-value ratios supporting a six-to-nine month 12% interest rate loan with 2 upfront points. Developers doing ordinary renovation work can often renovate and sell a property within the loan time frame. Longer time frames involve two more upfront points to roll the loan.
We are able to source sites that are undervalued and present unique development opportunities. We achieve this by utilizing our experience in the architectural industry to develop a design and engage with the local planning authority to maximise the development potential of the site. We also have senior contacts in property auctions that can source distressed properties prior to them reaching the market. We aim to make our profit on purchase by securing the property at prices considerably below market value.
We minimize our costs by reducing the need to outsource the due diligence, architecture, interior design, construction and project management. These services are all done in-house.
We conduct a thorough feasibility study prior to proposing a property to investors. This involves an element of financial modeling and profit projection based on current market trends.We also test several architectural options to ensure that we get the maximum value from the site.
Our design skills are utilized to add value to the property. On all of our development projects we have focused on the quality of the design to ensure that the property stands out amongst neighboring competition. As a result we have observed a quicker sale,at a higher value than previously achieved on the street.
We manage the construction and so are able to overlap the ongoing design with work on site. Through the use of design and build Contracts we are able to save considerable time and cost without compromising on the quality.
We provide Photorealistic visualisations of the design and also implement virtual reality presentations to begin marketing the property prior to completion. This allows us to reduce the project time and target interested buyers at an early stage.