Tobin & Company Securities LLC (TOBIN), a distinguished woman-owned broker-dealer, once again showcased its expert managing broker-dealer capabilities in overseeing the Southridge MezzCo, LLC offering. Partnering with its client, CaliberCos Inc, a NASDAQ-listed entity under ticker CWD, TOBIN successfully supported a $4,810,000 best-efforts raise, with a meticulously monitored contingency minimum of $2,935,000, demonstrating an exceptional commitment to compliance and investor protection.
The offering centered around “Southridge,” a strategically significant development comprising two plots totaling approximately 80 acres in Johnstown, Colorado. In this venture, CaliberCos not only aimed to develop the land but also acquire the essential water rights, underscoring the comprehensive scope of the project. The development plans for Southridge were ambitious, with a focus on preparing the land for single-family residential use. This preparation included the implementation of crucial infrastructure such as water, sewer, electricity, gas, fiber optics, and stormwater services, which are pivotal for creating a sustainable living environment.
The planned sale of the property to Journey Homes, LLC, following the infrastructure development, highlighted the project’s potential for rapid progression from development to sale, reflecting a strategic exit strategy and potential for high returns. The property’s location, tied to the zoning in Area C of The Ridge and County Road 3E, further emphasized its advantageous positioning within a growing community.
TOBIN’s role as the Managing Broker-Dealer was crucial in ensuring the offering’s compliance with the stringent standards set by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). In recent years, FINRA has intensified enforcement actions and examinations focused on the monitoring of offering contingencies. TOBIN’s diligent management involved rigorous oversight of the investment inflows and the adherence to the offering’s timeline, ensuring that Caliber met all regulatory requirements and the offering’s specific terms.
The offering featured Unsecured Promissory Notes with a one-year maturity, extendable by another year, which Caliber exercised. This extension reflected the project’s ongoing development momentum and the need for flexibility in timing to maximize project outcomes. Throughout this period, TOBIN maintained an elaborate and robust due diligence framework, as mandated under FINRA’s Reasonable Basis Obligation of Due Diligence outlined in FINRA Regulatory Notice 10-22. This framework ensured that all statements and claims made in the Private Placement Memorandum (PPM) were not only truthful but thoroughly substantiated, safeguarding investor interests and upholding the integrity of the offering.
Moreover, TOBIN assessed the suitability standards described in the PPM to confirm their clarity and comprehensibility for investors. This suitability review is essential to ensure that each investor’s participation aligns with their financial situation and investment objectives, a critical step in TOBIN’s comprehensive investor protection strategy.
The successful management of the Southridge MezzCo, LLC offering exemplifies TOBIN’s commitment to excellence in the fields of investment banking, managing broker-dealer operations, and private placements. By ensuring meticulous attention to regulatory compliance, thorough due diligence, and strategic oversight, TOBIN has reinforced its position as a leader in facilitating complex financial offerings in the real estate sector and beyond.
This case study not only highlights TOBIN’s operational excellence and strategic acumen but also underscores its role as a trusted partner capable of navigating the intricate landscapes of alternative assets and private placements, ultimately contributing to the successful realization of significant real estate development projects.
