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.
Callahan Plaza – 91,685 square foot necessity-anchored shopping center located in Callahan Florida, 20 miles north west of Jacksonville Florida
Winn Dixie – 39,211 sf
Lease expired 5/20/16
Sales $16.2 million – with occupancy expense ratio of .0075%
Gross rent of $3.09 psf
Current Lease structure
Lease expires August of 2027
Sales of $18.05 million – with occupancy expense ratio of 1.41% based on new rent
Increased rent to $6.49 psf
O’Reilly Auto Parts – 8,640 sf – expires 8/31/2027
Acquired center in November of 2013
Purchased center for $2.3 million or $25 psf
75% at acquisition
93% as of 10/1/2016
Increase net operating income from
$191,044 NOI at acquisition
$423,414 current NOI as of 10/1/16
Increase of $232,370, or 122%
Renovated Center at a total cost $924,000 plus tenant allowance to Winn Dixie of $637,000. Renovations included:
New parking lot
New parking lot lighting
New roof for Winn Dixie
New HVAC for Winn Dixie
Renovated Pylon sign
Value Creation examples
$5.3 million New Value of center @ 8%
20% + annual Cash on Cash return on Equity
3x multiple on Initial Investment
28%+ Internal Rate of Return
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.
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:
Focused exclusively on Value-Add Necessity Anchored Shopping Centers
Great Combination of positive cash flow investments with upside potential
High Yield with Quarterly distributions
Thanks again for your interest, and please let me know if you have any questions.
Broad Reach Retail Shopping Partners, LLC