Longhorn Land Company & A&E Housing LLC Joint Venture

Longhorn is a Colorado Limited Liability Company formed to take advantage of real estate development opportunities in the North Dakota oil fields. Longhorn raised initial capital of $130,000 to launch the Longhorn effort in North Dakota and subsequently secured $1,000,000 in debt financing for the purchase of its land portfolio. A&E is bringing its modular housing expertise to the project and the two organizations are forming a Joint Venture to develop North Dakota properties with modular buildings.

The Joint Venture’s primary areas of focus are Dunn Center and Killdeer, where the oil and gas development is rapidly expanding. Longhorn began buying land in Dunn Center in March 2012 and subsequently acquired three additional parcels of land. The Joint Venture intends to develop more than two hundred multi-family units and 30,000 square feet of light industrial/commercial. Additionally, the Joint Venture has a premiere two acre parcel bordering Central Avenue in Dunn Center just off Highway 200 reserved for the 48 room Longhorn Station Hotel.

Adjacent to that parcel to the east, the joint venture has an additional two acres for development of 12 duplex units. Finally, the Joint Venture purchased a 28.8 acre parcel on the northwest corner of the city that will support more than 220 apartment units in six development phases. Longhorn maintains offices in Dunn Center. A&E Housing’s corporate office is in Chicago.

Dunn Center, ND is located in the heart of the Bakken Oil Patch

Market Demographics

The Bakken Oil Field is one of the largest oil deposits in North America with North Dakota now the second largest oil producing state in the U.S. With improved fracking technology, the deposit is producing 760,000 barrels per day and forecast to produce 1 million barrels per day within the next year. The production growth has led to the rapid development of the surrounding towns that support the oil fields. The cities of Dickinson and Williston have already grown exponentially in size in the past five years and it is forecast that the city of Dunn Center (300+ current population) will blossom in size over the next seven to eight years to 3,000 people.

Currently, more than 2,400 semi-trucks servicing the oil fields pass right by the project properties every day. With this number expected to increase to 3,400 semi-trucks in the next few years. Housing, restaurants, service stores, gas stations, hotels, etc. are in extremely high demand and far outstrip supply. Marathon Oil Company recently built Phase One ($8 million) of a planned four phase complex in the heart of Dunn Center. The complex will be expanded and completed in the next several years. Marathon currently employs 93 people in Dunn Center. These employees commute one hour each way to Dickinson on a dark and heavily trafficked two lane road.

For more information, please see the Federal Reserve Bank of Minneapolis report on The Bakken Oil Boom.

Project Specifics and Securitization

Investors in the Joint Venture’s project are granted a first deed of trust on the underlying real estate and a UCC-1 security agreement on materials while the buildings are being built. Upon completion of a project, the investor will hold a first deed of trust on the building and underlying real estate.

Industrial Projects

The Joint Venture’s fully funded industrial project is one of the first of this high demand space in Dunn Center. The land underlying the project has already appreciated 60% in the last year since first being identified and place under contract. Current market conditions support extremely high demand for light industrial warehouse space. Buildings are currently selling for $1.5 million with multiple bidders. The Joint Venture plans to build three such buildings on our industrial parcel with superior highway visibility.

Four-Plax Units Selected

The first phase of the Joint Venture’s 28 acre multi-family parcel has sewer installed. These sewer lines currently serve the first 8.5 acres of the project. With 40 new drilling rigs headed for Dunn County by August 2014, the Joint Venture recognizes the demand for permanent housing

prior to the winter setting in. Longhorn plans to have a minimum of 6 four-plex units built by the end of September with a total goal of twelve four-plex buildings desired. The units will be 2-bed 2 bath at 1,000 square feet in size with a one car attached garage. Market rents on a per unit basis range from $1,800/month to $2,200/month and trending upward.

Investment Opportunities

For specific information concerning investment opportunities in both Texas and North Dakota, contract George Frerichs, managing director of A&E Housing, LLC at 312-856-1444 or gfrerichs@grfiltd.com
400 E. Randolph St. #700
Chicago, IL 60601

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GRFI/The Frerichs Group
400 East Randolph Street Suite 700
Chicago, Illinois 60601
(p) 312.856.1444
(toll free) 888.856.5161
(f) 312-856-0025