Case Study Property 1
9-year hold / Current Yield 7.9% / Total Return 25.0%
Acquisition of a well located warehouse and distribution facility located in Wilson, North Carolina. Highlights Cardinal’s ability to capitalize Tenant Improvement expenditures into disposition sales price premium.
Investment Overview
Investment Hold: 10/2005 – 07/2014
Investment Thesis: Investment represented the opportunity to acquire a well-positioned, warehouse and distribution facility totaling 328,000 sft. in Wilson, NC. The acquisition featured a lease to a financially strong beverage distributor with 10 years of remaining term, and a high probability of renewal based on the mission-critical nature of the facility. With 3 years remaining on the lease, Cardinal invested $1.5M in TI in exchange for a 15-year renewal which created $3M+ in property value, at which point, the property was subsequently sold in 2014.
Returns: The investment generated strong risk-adjusted returns over the 8 year hold period: 7.9% Cash-on-Cash, 25.0% Total Return and 2.2x Equity Multiple.
Transaction Overview
| Price | $13,512,625 |
| Price per Sft | $41.20 |
| Entry Cap Rate | 8.7% |
| Equity | $3,122,625 |
| Debt | $10,400,000 |
| Acquisition Strategy Type | Yield |
Investment Returns
| Net IRR (Leveraged) | 25.0% |
| Cash-on-Cash (Avg.) | 7.9% |
| Equity Multiple | 2.2x |
| Hold Period | 8 Years |
Property Overview
| Property Type | Warehouse |
| Year Built / Renovated | 1998, 2005 |
| Total Square Feet | 328,000 |
| Occupancy | 100.0% |
| Lease Term Start | 2005 |
| Lease Term End | 2026 |
| Lease Structure | NNN |