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CURRENT
PROPERTY
2492 – 2498 S. Tejon St.
Englewood, CO
ASSET CLASS:
Industrial
ASSET SUB-TYPE:
Multi-unit Small units from 2,000 to 3,027 sq ft.
BUILDING:
10,027 sq ft, (4) units, brick and wood exterior.
Investment
Report
Thesis
Overview
Small unit industrial is a good performing asset in economic downturns.
Stays fully occupied nearly all of the time due to high demand and low inventory of like product.
Very few, new small-bay building spaces (0-6,000 sq ft) have been created in the past 10 years.
The building was purchased with a projected net annualized return of 10.03%.
Purchased December of 2017 for $910,000 (no leverage utilized)
The building required $148,000 in capital improvements in order to receive a certificate of occupancy for two of the units:
New electrical distribution panel, curbs, and wiring to panels
New roof on 50% of the building
New shop heaters, heating inside offices, and other significant plumbing
Ceilings needed to be drywalled in two units
One unit converted from office to warehouse
Risks
50% of the leases are up for renewal in 2020.
We will focus on staggering leases in future years to mitigate tenant turnover at the same time.
Another risk is tenant credit. We are trying to improve credit for each time a unit becomes available.
OUTLOOK & EXIT
All work was completed within 1.5 months of purchasing the property.
Certificate of Occupancies have been awarded and the vacant units have been occupied.
The property is performing as expected with a forward weighted projected net annualized return of 10.07%.
If the property was sold after 3 years, the projected net annualized, non-levered return upon disposition would be 11.67%.
More
Information
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