Highlighted below are four investments made by the firm that have gone full-cycle:
Background: The acquisition of a 92-unit multifamily complex located in the Champions submarket of North Houston. The property was purchased from a CMBS lender who had foreclosed on the previous owner. Due to mismanagement of the property, it was only 58% occupied upon acquisition although it was located in a submarket that was achieving over 90% occupancy on average. The property was purchased at a sizeable discount to the outstanding CMBS loan amount.
Performance: All exterior and down unit interior renovations were completed in the first 90 days and occupancy was pushed to over 90% within the first six months of ownership. The property was sold to an investment group after 18 months of ownership.
Sold: October 2012
Investment Lifetime: 18 months
Investor Return: 39.3% IRR
Investor Return Multiple: 1.57x
Grapevine Mills Retail
Lender Short Sale
Background: The acquisition of an 18,694 square foot retail center located adjacent to the 1.6 million square foot Grapevine Mills Mall. The property was purchased as a lender short sale for approximately 65% of the lender’s outstanding loan. The property was 87% occupied upon acquisition with nationally-recognizable tenants and was purchased at an 11% cap rate on existing NOI. These tenants have an average lease term remaining of four and one half years.
Performance: The available space was immediately marketed and a lease was signed with a casual dining restaurant. Once the center was 100% occupied, it was actively marketed for sale and sold within 17 months of ownership.
Sold: February 2013
Investment Lifetime: 17 months
Investor Return: 35.5% IRR
Investor Return Multiple: 1.49x
LA Fitness Build-to-Suit
Little Rock, AR
Background: The construction of a 47,500 sf LA Fitness facility in Little Rock, Arkansas. The property was 100% occupied by LA Fitness who has signed a corporately guaranteed 15-year lease. Construction of the property was contemplated to take 9 months. The tenant would receive a six month free rent period beginning at receipt of certificate of occupancy.
Performance : Construction began on Jan. 15, 2013 and construction was complete and the certificate of occupancy was issued on Dec. 31, 2013. A contract to sell the property was received in Nov. 2013 and the property was sold in Feb. 2013.
Sold: February 2014
Investment Lifetime: 13 months
Investor Return: 44.5% IRR
Investor Return Multiple: 1.51x ____________________________________________________________________________________________________________________
Lancaster Medical Office
Background: The all-equity acquisition of a 16,798 square foot medical office building located in Lancaster, TX. The property was purchased from the lender who had foreclosed on the previous owner in May 2011. The property was purchased at approximately 1/3 of the current replacement cost and less than 1/3 of what previous ownership paid. The property is currently 40% occupied by DaVita Total Renal Care (NYSE: DVA).
Performance: Within two months of acquisition a lease was signed on the balance of the available space. The new tenant is a local doctor that runs a rehabilitation clinic and was drawn to the property due to it’s location and visibility. A contract to sell the property was received in Dec. 2013 and the property was sold in Feb. 2014.
Sold: February 2014
Investment Lifetime: 16 months
Investor Return: 39.5% IRR
Investor Return Multiple: 1.61x
*Past performance is not a guarantee of future results.