Type: retail/office Value-add

Status: Completed & DISBURSED

Principals of BoxDevCo  acquired an interest in an approximately 16,400 SF retail building in Olathe, Kansas in June of 2014, sourced off-market through a personal relationship.  

The building had been neglected with tenants complaining of a leaking roof, pavement problems, and other issues.  As a result, the tenants were unhappy and lease terms were running short.

Following acquisition the next several months were spent negotiating lease renewals with tenants, replacing a portion of the roof and re-instating a roof warranty, painting the building, repairing asphalt and concrete issues, simplifying the tax parcel, successfully appealing the tax valuation, and other minor clean-up issues.

Following stabilization of the asset, an out-of-town investor with a 1031 requirement approached the ownership group and submitted an offer to purchase the property.  Closing occurred July 2015.

This project produced above-market returns due to the value-add nature and creative leverage used in the acquisition.

Deal Summary

Cap rate at acquisition:  Approximately 10%

Cap rate at disposition:  Approximately 7.5%

IRR Before Tax:  Approximately 446%

Equity Multiple:  Approximately 5.46x (over 13 months)

Note: Past performance of any one deal is not a guaranty of future performance of any specific project.  Please evaluate each opportunity independently and invest wisely.