There are two separate but interconnected investments, PEI – Cannon Ranch & PEI – Cannon Ranch 1b.
PEI Cannon Ranch is the residential project. We acquired bank-owned land entitled for 4200 residential lots for $16M that had been in escrow for $160M in 2006. The former buyer fell out of contract when the market collapsed so the owners filed bankruptcy and the property went back to the bank. We partnered with two NY hedge funds (who bought in for 90% and we own 10% of the project). The business plan is to finish the Final Map, and then sell lots in bulk to builders starting in 2016.
We changed the name of the community from Cannon Ranch to the Mirada and changed the amenities from a golf course to a water community, using Crystal Lagoon technology. The development is located just 30 miles Northeast of Tampa, FL.
PEI Cannon Ranch 1b is 29 acres slated for commercial use, adjacent to the residential development. Our group purchased the land for $1.2M (it had sold for $6.5M in 2004). We are holding this land until construction on Mirada begins, which would increase the need for commercial property (namely a grocery store).
You can learn more about the project below, and also review the updates. We are allowing a very limited number of new investors to participate, while replacing some older investors who needed to exit at this time.
Below is your project updates for PEI Cannon Ranch LLC & PEI Cannon Ranch 1b LLC
PEI-Cannon 1B LLC, the Commercial Project:
The Purchase and Sale Agreement for Phase 1 of the Commercial Site (14.8 acres of 28 Acres) was amended and restated September 2018. The PSA provided for a contingency for the approval of the Site by the Publix Market Real Estate site committee, originally to be removed by December 2018, this date was subsequently extended to February 2019. The Site was approved by Publix with conditions acceptable to buyer on February 27, 2019. The Buyer has removed the contingency and released the $100,000 deposit to Seller! In addition, the Buyer has now contracted with his consultant team, (Architect, Civil Engineer, Soil Engineer) at Budgeted expenditures of $350,000.
The buyer now has 180 days for the Site Permitting Approval which takes us to September 2019, with Closing of the Phase 1 anticipated in November 2019!
Based on the $3,868,000 Phase 1 Purchase Price in November of 2019, an initial $50,000 original Investment estimated financial projections are earned $82,250. (preferred return @15%) Net Proceeds from Phase 1 Sale should return 100% of Original Capital and 78% of preferred return ($64,238. Based on $50,000 Investment).
As soon as Phase 1 closes we will begin marketing Phase 2. The phase 1 Buyer is most likely candidate but has no contractual control. IF Phase 2 were to sell at the SAME $ PSF as Phase 1, the Financial results for the Original $50,000 Unit would be the Payment of the balance of the Preferred Return owed ( $18,000 )plus the 12.5% equity participation estimated at $12,300.
PEI Cannon Ranch LLC, the Residential Project:
Lennar JV/ Active Adult:
Phase 1 Land has been contributed by CR Pasco Investors, LLC to the Lennar Active Adult JV per the Agreement. The Active Adult Clubhouse Agreement is in negotiation. The Lennar Active Adult Models are scheduled to be started this month.
Phase 1 Roads: Mirada Blvd to the Lennar Active Adult lots, SR 52 intersection, Kenton Rd to Active Adult and Setter Palm all are completely paved. Landscape and hardscape are in progress. Lagoon: Under Drain and earthwork are complete, construction progressing on balance of Lagoon with completion estimated 3rd quarter 2019.
Lot Deliveries & Lat Sales:
Lot deliveries were delayed due to a design change in the water system by Florida Department of Transportation. Phase 1 Lot Deliveries ( Parcels 16 – 22 ) now projected for April 2019 (originally December 2018).
Lot sales: We remain in negotiation on Parcels 2 – 6 with Kolter. No signed contract as of now. Not aggressively pursuing other Lot contracts at this time, wanting to wait for existing builder Model Delivery and completion of the Crystal Lagoon.
All builder “Now Selling” signs are up, plus some “Crystal Lagoon coming soon” signage and Mirada Sale Flags are up. A Mirada billboard has been selected on the Interstate in a high volume traffic location in downtown Tampa. This will start in April.
No financial updates have been prepared since our November Update. Should have Update in June.
Fred Bates and Tom deRegt are scheduled to visit Tampa for site inspection, meeting and site tour with Metro Development, and meeting with the Buyer of Parcel 1B. We will discuss this visit in our next update.
Thank you for your continued support as we move to the next Phase of this exciting project! Lot Deliveries, Model Homes and Home Sales!
If you have any questions, please email them to Syndications@
Here is the update for our Tampa Projects, both Cannon Ranch & Cannon Ranch 1b as well as recent financial statements:
Let us know if you have any other questions.
Below is the latest updates from the developers of PEI-Cannon Ranch & PEI-Cannon Ranch 1b:
PEI Cannon Ranch 1B – The Commercial Property
We had exploratory discussions with real estate brokers and some retail developers about soliciting offers 1st quarter 2018. Feedback was that based on status of the Mirada residential development we were a bit premature. We will continue to monitor, however we anticipate RFP late 2018 or early 2019.
PEI Cannon Ranch – The Residential Property
We completed the supplemental offering. The total amount raised in the recapitalization was $825,000. The first funds were received July 12, 2017 and the last were received September 28, 2017. Eight investors opted to exit the project early, totaling a return of $325,000 capital.
- We are currently on schedule. 95% of Mirada Blvd Earthwork is completed. We will begin paving in November and we are on schedule to finish by April 2018.
- We will begin infrastructure construction for Phase 1 lots (Parcels 16-22) in November 2017 and we are scheduled to be completed by June 2018.
- We anticipate Crystal Lagoon construction will begin April 2018 with a 12 month schedule.
- Phase 1 Lot deliveries anticipated 3rd quarter 2018.
- Below are some recent site photos & a link to a fly over video of the property.
Builder Contracts / Lot Sales
- Lots of activity to report regarding lot sales and builder contractos.
- Our current lot count is up to 4600.
- Lennar JV has purchased 890 lots, LGI has purchased 95 lots for townhouses, bringing out total to 985 sold.
- LGI has confirmed due diligence on a secont contract for 126 homesites.
- DR Horton is finalizing a contract for for 410 lots.
- We are in process negotiating a contract with Maronda for 367 lots.
- We are in discussions with Kolter regarding a bulk sale, raw land takedown of 600 – 700 units. If this goes through income potentially would receive capital gains treatment.
Please send any questions to Syndications@RealWealthNetwork.com.
As a follow-up to our recent project update on Mon 2/27, our developer partners have sent us 13 new aerial shots of the property along with an updated site plan for the Active Adult Community part of the development.
Our next formal quarterly update will be in May, but we will continue to email you the latest developments as they become available.
I’m sure you’re hoping for a thorough update on Cannon Ranch Residential, but I wanted to let you know that we won’t have have the year-end numbers until February 15th.
The accountants then will need until the end of February to finalize numbers for K1s. That means unfortunately, we will not receive our K1’s until mid-March.
Investors in Cannon Ranch Commercial should already have received their K1’s. Of course their land’s value is contingent on the success of Cannon Ranch Residential – and that is looking VERY good, as you’ll see below!
Tom DeRegt will be able to give us an Investor Report by end of February once the numbers are in.
A lot is moving but the schedule has not changed since our last investor call in November. To summarize:
Phase 1 – Mass grading starts in May.
PreSales – We will start presales to builders and write contracts by the end of first quarter and we expect to deliver our first closings during the first quarter of 2016.
Interest Level – We received a Letter of Intent for purchase of 25% of the land for $15K/acre (We paid $8K). The managers rejected it because they believe the value is closer to $20K/acre.
Another group has verbally offered $80M for the entire property (we paid $16M). Again, the managers feel the land is worth more as it was in escrow for $160M at one time – and the plans were not nearly as good as they are now.
Until a better offer comes in, the managers will continue with the current plan to fund the site development with builder deposits and CDD Bond funding.
Tom will attend a partner meeting on February 25th, at which point he’ll have a better understanding of when distributions can be made.
Stay tuned for the March update. There will likely be some exciting updates.