PropTech Investment Corporation II

PROPOSED BUSINESS COMBINATION: Appreciate

ENTERPRISE VALUE: $420.2 million

ANTICIPATED SYMBOL: SFR

PropTech Investment Corporation II proposes to combine with Appreciate, the parent holding company of Renters Warehouse, a leading end-to-end Single-Family Rental (“SFR”) marketplace and management platform.

Through its operating company, Renters Warehouse, Appreciate offers a full-service technology platform for investing in and owning SFR properties. The company provides a proprietary online marketplace and full-service brokerage teams in over 40 markets, allowing investors to execute with efficiency and confidence. Appreciate’s clients benefit from a SFR property management platform that addresses the full spectrum of investor needs, from resident placement and property management to analytics and reporting.

SUBSEQUENT EVENT – 11/21/22 – LINK

• The SPAC and Vellar Opportunity Fund entered into an OTC Equity Prepaid Forward Transaction.
  • Pursuant to the terms of the Forward Purchase Agreement, Seller intends, but is not obligated, to purchase in the open market through a broker shares of PTIC II Class A common stock, after the date of the Forward Purchase Agreement and after the expiration of PTIC II’s redemption deadline from holders of Shares who have elected to redeem Shares pursuant to the redemption rights set forth in PTIC II’s amended and restated certificate of incorporation, dated as of December 3, 2020, in connection with that certain business combination agreement, dated as of May 17, 2022 between PTIC II, RW National Holdings, LLC, a Delaware limited liability company (“Renters Warehouse”) and Lake Street Landlords, LLC, a Delaware limited liability company, up to a maximum of 9,000,000 Shares at a redemption price of approximately $10.08 per Share (based on an amount of $232,870,089 currently held in the Trust Account) to be paid to investors who elected to redeem their shares at PTIC II’s redemption deadline (the “Initial Price”);
    • provided that Seller may not beneficially own greater than 9.9% of the issued and outstanding Shares on a post-Business Combination pro forma basis. .
  • Seller has agreed to waive any redemption rights with respect to any Shares in connection with the Business Combination. Such waiver may reduce the number of Shares redeemed in connection with the Business Combination, which reduction could alter the perception of the potential strength of the Business Combination. The number of Shares purchased by the Seller shall be referred to as the “Recycled Shares.”
• The Forward Purchase Agreement provides that not later than one local business day following the closing of the Business Combination, PTIC II will pay to Seller, out of funds held in PTIC II’s trust account, a cash amount equal to
  • (x) the product of the number of Recycled Shares and the Initial Price, less, on the Prepayment Date,
  • (y) one-half of the product of 10% of the number of Recycled Shares and the Initial Price (the “Leakage Amount”), which remaining one-half of the Leakage Amount shall be paid by the Seller to the Combined Company on the earlier to occur of
    • (a) the date that the SEC declares a registration statement registering the resale of all shares held by the Seller and its affiliates effective, and
    • (b) the OET Date(Any date following the Closing of the business combination).
  • In addition to the Prepayment Amount, PTIC II shall pay directly from the Trust Account on the Prepayment Date, an amount equal to the product of 500,000 and the redemption price, for the purpose of repayment of Seller having actually purchased from third parties prior to the Closing.
  • The Additional Consideration shall be free and clear of all obligations of Seller in connection with signing a definitive agreement for the Forward Purchase Transaction.
  • Seller has agreed to waive any redemption rights with respect to the Shares.
• From time to time following the Closing and prior to the earliest to occur of
  • (a) the third anniversary of the Closing and
  • (b) the date specified by Seller in a written notice to be delivered to PTIC II at Seller’s discretion after the occurrence of any of a
    • (x) Trigger Event or
    • (y) Delisting Event, Seller may, in its sole discretion, sell some or all of the Shares.
  • On the last trading day of each calendar month following the Business Combination, solely from any proceeds from any sales of Shares by Seller that are not retained for its account to repay the Leakage Amount, Seller will pay to the Combined Company the product of the number of Shares sold multiplied by the Reset Price.
  • The “Reset Price” shall be, on the first scheduled trading day of each month commencing on the first calendar month following the Closing, the lowest of
    • (a) the then-current Reset Price
    • (b) the Initial Price and
    • (c) the VWAP Price of the Shares of the last ten (10) trading days of the prior calendar month, but not lower than $5.00; provided that to the extent that PTIC II or the Combined Company offers and sells any Shares or securities convertible into Shares at a price lower than the Initial Price, the Reset Price, shall be modified to equal such reduced price at which such securities may be issued. Seller will retain any sale proceeds in excess of the product of the number of Shares sold by Seller and the Reset Price.
• In the event that the VWAP Price of the Class A Common Stock falls below $2.00 per share for 20 trading days during any 30 trading day period (a “Trigger Event”), then Seller may elect to accelerate the Maturity Date to the date of such Trigger Event.
  • At the Maturity Date, the Combined Company is required to purchase from Seller, subject to Seller’s consent, all of the unsold Shares for consideration equal to an amount, in cash or Shares at the sole discretion of Combined Company, equal to
    • (a) in the case of cash, the product of the unsold Shares and $1.75, or $2.00, solely in the event of a Registration Failure, and
    • (b) in the case of Shares, such number of Shares with a value equal to the product of the unsold Shares and $1.75, or $2.00, solely in the event of a Registration Failure, divided by the VWAP Price of the Shares for the 30 trading days prior to the Maturity Date; provided that the Maturity Shares used to pay the Maturity Consideration are freely tradable.
  • If the Maturity Shares are not freely tradable, Seller shall instead receive such number of Shares equal to the product of (i) three (3) and (ii) 9,000,000 minus the Terminated Shares (the “Penalty Shares”); provided, however, that if the Penalty Shares are freely tradable within 120 days after the Maturity Date, Seller shall return to Appreciate such number of Penalty Shares that are valued in excess of Maturity Consideration based on the 10-day VWAP ending on the date that such Shares satisfied the Share Conditions.
• Pursuant to the terms and conditions of the Forward Purchase Agreement, Renters Warehouse and the Combined Company agree, from and after November 20, 2022, not to incur in excess of $25.0 million of indebtedness through and including the 90th day following the Prepayment Date without the prior written consent of the Seller.
• A break-up fee equal to
  • (i) all of Seller’s reasonable and documented fees and expenses relating to the Forward Purchase Agreement capped at $50,000 plus
  • (ii) $500,000, shall be payable by the Combined Company to Seller in the event the Forward Purchase Agreement is terminated by PTIC II (collectively, the “Break-up Fee”).
    • However, the Break-up Fee is not payable if the Business Combination Agreement is terminated prior to the closing of such Business Combination.

TRANSACTION

• The combined company will have an estimated post-transaction enterprise value of $416 million, consisting of an estimated equity value of $575 million, $159 million in cash, and no debt, assuming no redemptions.
• Cash proceeds raised will consist of PropTech II’s approximately $230 million of cash in trust (before redemptions) and a committed equity facility of $100 million (the “Committed Equity Facility”) from CF Principal Investments LLC, an affiliate of Cantor Fitzgerald & Co., subject to certain conditions precedent.
• Current Appreciate management, employees and existing shareholders will roll 96% to 100% of their existing equity holdings into the equity of the combined company, subject to redemptions by PTIC public stockholders.
• The business combination is expected to close in the second half of 2022

PIPE

• There is no PIPE for this transaction

LOCK-UP

• Company and Sponsor
  • 180 days from the Closing Date.

PURCHASE AGREEMENT

• CF Principal Investments will purchase up to $100M of shares from the SPAC.
  • Cantor will purchase the shares for 98% of the VWAP during the date the Investor directs it to purchase the shares, over a 36-month period
  • PTIC II agreed to pay to the Investor on the Commencement Date the number of PTIC II-Class A Shares equal to the quotient of $2,000,000 divided by the closing price of the PTIC II-Class A Shares on the determination date as consideration for the Investor’s irrevocable commitment to purchase the PTIC II-Class A Shares upon the terms and subject to the satisfaction of the conditions set forth in the Cantor Purchase Agreement.
    • PTIC II has the right to terminate the Cantor Purchase Agreement at any time after Commencement, at no cost or penalty, upon three trading days’ prior written notice.
    • No termination of the Cantor Purchase Agreement will alter or otherwise affect PTIC II’s obligations under the Cantor Registration Rights Agreement

NOTABLE CONDITIONS TO CLOSING

• There is no minimum cash closing condition

NOTABLE CONDITIONS TO TERMINATION

• If the Closing has not occurred on or before six (6) months after the date of the Business Combination Agreement. (11/17/2022)

ADVISORS

• Northland is acting as exclusive M&A advisor to PTIC.
• Cantor Fitzgerald & Co. is acting as exclusive capital markets advisor to PTIC.
• Kirkland & Ellis LLP is acting as counsel to PTIC.
• King & Spalding LLP is acting as counsel to CF Principal Investments LLC in connection with the Committed Equity Facility.
• Gateway Group is acting as investor relations and public relations to both PropTech II and Appreciate.
• Moelis & Co. is advisor to Appreciate.
• Winthrop & Weinstine, P.A. is acting as counsel to Appreciate.
• Faegre Drinker Biddle & Reath LLP is acting as counsel to Appreciate.

MANAGEMENT & BOARD

Executive Officers

Thomas D. Hennessy, 35
Chairman of the Board, Co-Chief Executive Officer and President

Thomas D. Hennessy currently serves as Co-Chief Executive Officer, President and a director of PropTech Acquisition Corporation, or PTAC, a special purpose acquisition company targeting businesses in the real estate technology industry, which in July 2020 announced the entry into a definitive agreement for an initial business combination with Porch, which is currently expected to close in the fourth quarter of 2020. Mr. Hennessy has served as the Managing Partner of Real Estate Strategies of Hennessy Capital LLC since July 2019. From September 2014 to July 2019, Mr. Hennessy served as a Portfolio Manager of ADIA, the largest global institutional real estate investor, where he was responsible for managing office, residential, and retail assets in the U.S. totaling over $2.1 billion of net asset value or $5.0 billion of gross asset value. While at ADIA, Mr. Hennessy executed over $475 billion of equity commitments to U.S. acquisitions and developments and over $435 million of limited partner equity commitments to opportunistic real estate equity funds, real estate credit funds, and real estate technology venture capital funds. Mr. Hennessy also created and led ADIA’s PropTech investment mandate, which included committing equity to PropTech. From January 2011 to April 2014, Mr. Hennessy served as an associate at Equity International Management LLC, an opportunistic real estate private equity fund founded by Sam Zell, where he evaluated investments and structured equity investments in real estate operating platforms in emerging markets. From September 2009 to January 2011, Mr. Hennessy served as an associate for CERES Real Estate Partners LLC, a private investment management company. From June 2007 to June 2009, Mr. Hennessy served as an analyst in the investment banking division of Credit Suisse, where he focused on mergers and acquisitions for companies in the real estate, gaming, lodging and leisure sectors as well as public and private financings of equity, debt and structured products. Mr. Hennessy is the son of Daniel J. Hennessy, one of our advisors. Mr. Hennessy holds a B.A. degree from Georgetown University and an M.B.A. from the University of Chicago Booth School of Business.

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M. Joseph Beck, 35
Co-Chief Executive Officer, Chief Financial Officer and Director

M. Joseph Beck currently serves as the Co-Chief Executive Officer, Chief Financial Officer and a director at PTAC. Mr. Beck has served as the Managing Partner of Real Estate Strategies of Hennessy Capital LLC since July 2019. From August 2012 to July 2019, Mr. Beck served as a Senior Investment Manager of ADIA, where he was responsible for managing office, residential, industrial and retail assets in the U.S. totaling over $2.7 billion of net asset value or $3.6 billion of gross asset value. While at ADIA, Mr. Beck executed over $2.2 billion of equity commitments to U.S. acquisitions and developments and over $400 million of limited partner equity commitments to opportunistic real estate equity funds and real estate credit funds. Mr. Beck also led an internal restructuring of a seven-asset, $3.5 billion gross asset value portfolio at the ADIA. From July 2008 to August 2012, Mr. Beck served as an analyst in the Investment Banking Division of Goldman, Sachs & Co., where he focused on mergers and acquisitions for companies in the real estate sector as well as public and private financings of equity, debt and structured products. Mr. Beck holds a B.A. degree from Yale University.

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Board of Directors

Jack Leeney, 35
Director Nominee

Since November 2019, Mr. Leeney has served as a director of PTAC. Since September 2016, Mr. Leeney has served as a Founding Partner of 7 Global Capital, a growth stage venture capital firm, and is responsible for running the funds’ operations. Mr. Leeney led the firm’s investments in Cheddar, a digital-first new media company (sold to Altice USA, May 2019), Capsule Corp., an online pharmacy, and hims & hers, a health and wellness e-commerce brand, Jyve, a skilled economy job marketplace for the consumer packaged goods industry, Roofstock, a real estate technology business, The Mom Project, a digital talent marketplace and Reliance Jio, a telecommunications company. He currently serves on the board of directors of The Mom Project. Between April 2011 and December 2016, Mr. Leeney served on the boards of directors of Quantenna Communications, Inc. (NASDAQ: QTNA), DoAt Media Ltd. (Private), CinePapaya (acquired by Comcast), Joyent (acquired by Samsung), BOKU, Inc. (AIM: BOKU), Eventful (acquired by CBS) and Blueliv (Private). Previously, Mr. Leeney served as the Head of U.S. Investing for Telefonica Ventures between June 2012 and September 2016, the investment arm of Telefonica (NYSE: TEF), served as an investor at Hercules Capital (NYSE: HTGC) between May 2011 and June 2012 and began his career as a technology-focused investment banker at Morgan Stanley in 2007. Mr. Leeney holds a B.S. from Syracuse University.

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Courtney Robinson, 36
Director Nominee

Since November 2019, Ms. Robinson has served as a director of PTAC. Since October 2014, Ms. Robinson has served as a Founding Partner of Advance Venture Partners LLC, a growth stage venture capital firm, and is responsible for the firm’s consumer investment practice. Ms. Robinson led the firm’s investments in Bellhops, a technology-enabled moving service; Brandable, a portfolio of CPG brands; Curology, a personalized skincare provider; Modsy, an interior design marketplace; Rent the Runway, a subscription clothing business; and Sawyer, an education marketplace. Between December 2011 and October 2014, Ms. Robinson was a Founding Principal at American Express Ventures, the investment arm of American Express (NYSE: AXP), and before that, served as Director of Business Development at Plum District, a local commerce marketplace, between February 2011 and December 2011. She began her career as a technology-focused investment banker at GCA Savvian Advisors LLC in 2006. Ms. Robinson holds a B.A. from Columbia University.

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Margaret Whelan, 48
Director Nominee

Since November 2019, Ms. Whelan has served as a director of PTAC and is chair of its audit committee. Since November 2014, Ms. Whelan has served as the Founder and Chief Executive Officer of Whelan Advisory LLC, a boutique investment banking firm focused on the residential real estate industry. In this role, she provides strategic and financial counsel to leaders of both public and private real estate companies in the U.S. and globally. From September 2013 to November 2014, she served as Chief Financial Officer of Tricon Capital Group Inc., a private equity firm specializing in residential real estate. Previously, she served in positions with JP Morgan Chase (2007 to 2013), UBS Financial Services Inc. (1997 to 2007) and Merrill Lynch & Co. (1995-1997). Between June 2015 and May 2019, Ms. Whelan served on the board of directors of Top Build Corp. (NYSE: BLD), as an independent director and member of the audit, compensation and nominating and governance committees. Since September 2017, she has served on the board of directors of Mattamy Homes, North America’s largest privately owned homebuilder. She also serves on the advisory boards of John Burns Real Estate Consulting and the Housing Innovation Alliance. Ms. Whelan holds a Bachelor of Commerce in Finance degree from the University College Dublin (Ireland).

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Gloria Fu, 49
Director Nominee

Ms. Fu brings over 20 years of investment management expertise, most recently at JPMorgan Asset Management, Inc., where she served as a Managing Director and portfolio manager from February 2004 to April 2019. Ms. Fu’s broad base of expertise includes strategy, financial analysis, and shareholder-related issues. Ms. Fu is a subject matter expert in corporate governance issues. Ms. Fu was a founding member of JPMorgan Asset Management’s Proxy Committee for which she provided leadership and guidance on a broad range of topics including proxy contests, Say on Pay, and ESG. From March 2002 to February 2004, Ms. Fu was a Vice President at JPMorgan Securities and a sell-side equity research analyst focused on the gaming and lodging industries. Ms. Fu currently serves on the board of directors and member of the audit and development committees for Visions, a New York based non-profit sponsoring programs for the blind. Ms. Fu is also an advisory board member to MREN, a cloud-based real estate company. Ms. Fu is a Chartered Financial Analyst and holds a Bachelor of Sciences in Hotel Administration and Master’s in Hospitality Administration from Cornell University.

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Adam Blake, 35
Director Nominee 

 In January 2017, Mr. Blake co-founded Zego Inc., a digital amenity and resident engagement platform for apartments, for which he served as the Chief Executive Officer until April 2019, when it was acquired by PayLease, a portfolio company of Vista Equity Partners. In October 2010, Mr. Blake founded Brightergy, an energy service and software company, for which he served as Chief Executive Officer from until July 2016. Previously, Mr. Blake was a real estate investor and developer specializing in multi-family apartments and other types of real estate investments. Mr. Blake holds a B.B.A degree from Texas Christian University.

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