The last couple of months we have focused on how Broad Reach Retail Partners create value. This month, we are excited to share with you the newest example of how Broad Reach Retail Partners creates Value: Callahan Plaza.
In summary, Broad Reach Partners increased the Net Operating Income of the center by 122% and more than doubled the value of the center in just a 36-month period of time. Below is a basic overview of the center and how we achieved these strong results.
Overview:
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Callahan Plaza – 91,685 square foot necessity-anchored shopping center located in Callahan Florida, 20 miles north west of Jacksonville Florida
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Anchored by:
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Winn Dixie – 39,211 sf
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At Acquisition
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Lease expired 5/20/16
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Sales $16.2 million – with occupancy expense ratio of .0075%
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Gross rent of $3.09 psf
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Current Lease structure
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Lease expires August of 2027
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Sales of $18.05 million – with occupancy expense ratio of 1.41% based on new rent
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Increased rent to $6.49 psf
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O’Reilly Auto Parts – 8,640 sf – expires 8/31/2027
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Acquired center in November of 2013
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Purchased center for $2.3 million or $25 psf
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Occupancy
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75% at acquisition
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93% as of 10/1/2016
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Increase net operating income from
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$191,044 NOI at acquisition
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$423,414 current NOI as of 10/1/16
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Increase of $232,370, or 122%
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Renovated Center at a total cost $924,000 plus tenant allowance to Winn Dixie of $637,000. Renovations included:
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New Façade
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New parking lot
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New parking lot lighting
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New roof for Winn Dixie
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New HVAC for Winn Dixie
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Renovated Pylon sign
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Value Creation examples
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$5.3 million New Value of center @ 8%
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20% + annual Cash on Cash return on Equity
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3x multiple on Initial Investment
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28%+ Internal Rate of Return
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Note that these returns have not been totally realized, and the center is held for an additional 5 years. In reality, the center will be put up for sale in January of 2017.
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Callahan Plaza is just the next example of how Broad Reach Retail Partners creates Value through disciplined buying and focused leasing and Management!
Next Opportunity – Broad Reach Retail Partners Shopping Center Fund II
We are pleased to share that we have reached our initial capital objective for Fund II, and therefore we will be closing the Fund on November 30, 2016. There is still time to participate in this closing but we will need to hear from you in the next couple of weeks.
Fund II Overview:
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Focused exclusively on Value-Add Necessity Anchored Shopping Centers
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Great Combination of positive cash flow investments with upside potential
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High Yield with Quarterly distributions
Thanks again for your interest, and please let me know if you have any questions.
Sincerely,
Nate Tower
Broad Reach Retail Shopping Partners, LLC