FUND II
YIELD STRATEGY
West Bay Capital Fund II, LLC’s dependable commercial real estate based investment strategy aims to return an annual yield between 6-8%. We are proud of Fund I’s historical average annual yield of 7.67%. Please use our calculator to explore what kind of monthly returns can be expected given various investment amounts and yield percentages.
Projected yields are not guaranteed and are subject to change on a monthly basis without notice.
FUND I's
HISTORICAL ANNUAL YIELD SUMMARY
2022 - 8.11%
2021 - 7.00%
2020 - 5.67%
2019 - 8.00%
2018 - 7.46%
2017 - 7.46%
2016 - 8.02%
2015 - 7.49%
2014 - 8.11%
2013 - 6.75%
2012 - 8.34%
2011 - 9.03%
2010 - 8.77%
Avg Yield
2010 - 2022
7.71%
INVESTMENT SUMMARY
Investment Objectives
West Bay Capital Fund II, LLC’s investment objective is to provide a medium-to-long term investment that will deliver a stable and consistent annual income yield between 6 – 8%, with capital preservation.
Principal Investments
90% or more of the Fund’s capital will be invested in commercial real estate loans originated or acquired by the Fund. These loans will be secured by deeds of trust or mortgages which are typically first or second in priority.
Up to 10% of the Fund’s capital may be invested in commercial mortgage - backed securities (CMBS).
Principal Investment Strategies
The Fund’s principal investment strategies emphasize the strategic creation and management of a diversified high-yield mortgage pool based on the knowledge, experience, and innovation of the Fund Management team. The loans and securities in the pool are underwritten at conservative loan-to-values on a wide range of property types, which generally have terms of 1 – 5 years and generate interest income yields between 8% – 15%. To mitigate risk and overexposure, the portfolio is diversified according to property type, loan size, loan structure, borrower type, and geography. Loans are made to borrowers in the commercial real estate marketplace, including investors, developers, business owners, institutions, and other entities who are unable to obtain financing from traditional sources due to timing or other nuances. Loans originated and acquired by the Fund include loans used for acquisition, refinance, business needs, bridge / interim purposes, and other opportunistic / time sensitive loan requirements of prospective borrowers. The Fund will also participate with banks, mortgage lenders, and other financial entities on a variety of unique and creative senior-subordinate loan structures.
Frequently Asked Questions
Our team of professionals are happy to answer any question you may have. Some of our most frequently asked questions are answered below in the interest of valuing your time.
What is your investment strategy?
West Bay’s primary investment strategy focuses on capital preservation. Investors have received net annualized returns of between 6-8% over the life of our current fund. We are risk adverse as we require borrowers to provide an executable business plan including a reasonable exit strategy either through refinancing or a sale. We provide capital to borrowers with a high creditworthiness and that have routinely shown ability to repay their obligations.
Who is the manager and how much experience do they have in this field?
In 1994 Mr. Edward R. Marek, Jr. and Mr. William McBride began in the private lending industry by originating individual loans. For efficiency purposes, they transitioned their business to a fund structure and in 2010 created their first fund, West Bay Capital, LLC.
What is the loan to value ratio?
The current combined Loan-To-Value (CLTV) ranges between 55-60% depending on the composition of the portfolio.
What is the security for the loans; where is the security located?
West Bay is a real estate secured trust deed lender. All trust deeds and mortgages are recorded in the county of where the property is located.
What is the loan exit strategy?
The most common strategies are refinancing or sale upon stabilization.
How does exit strategy change during times of stress and selloff?
In times of stress loan-to-values are compressed, making it more difficult for a borrower to execute their business plan via a refinance or sale. The state of the real estate market as a whole is considered during the underwriting process. Loan terms and proceeds are sized appropriately as an additional safeguard to prevent potential loss should real estate values continue to fall.
What is the percentage of first position secured loans in the portfolio?
85%, however, this fluctuates between 75-90% depending on the composition of the portfolio.
What is the percentage of second position secured loans in the portfolio?
15%, however, this fluctuates between 0-20% depending on the composition of the portfolio. Second trust deed or mortgage position loans are only considered when the collateral has significant equity to withstand any potential drop in value.
Does the fund use leverage?
Yes, the fund has a debt facility.
What is the leverage used for?
West Bay's primary use of the line of credit is to manage the cash flow of the fund.
To whom does the fund lend money?
West Bay lends to individuals, limited liability companies, and corporations seeking short term bridge financing to round out the capital stack. Our borrowers have a high degree of creditworthy and have routinely shown the ability to repay their obligations.
Does the fund lend outside the United States?
No, we only lend domestically.
Where within the United States does the fund lend?
We have the ability to do loans in all 50 states with a heavy concentration on western states.
What is the average loan term?
12- 18 months
What is the lock-out period in the Fund?
24 months
What are the distributions comprised of and how often is income distributed?
Investors receive income distributions on a pro rata basis from the interest that is collected on loans in the portfolio. The income is distributed on a monthly basis between the 5-10th day of the preceding month. To see a look back on our current investors yield on investment, see Fund I's historical annual yield summary above for more information.
What is the minimum investment requirement?
West Bay’s minimum investment amount is $25,000.
What are the assets under management?
Currently, $50,000,000 however, it has fluctuated between $50MM and $100MM depending on size and number of loans in the portfolio.
OUR PROFESSIONALS
Decision Makers Are Owners, Brokers, and Managers of Commercial Real Estate
CONTACT
WEST BAY
CAPITAL
222 N. Pacific Coast Highway, Suite 1780, El Segundo, CA 90245
Email: investors@investwestbay.com
Tel: 310-292-3722 (Kyle McBride)
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