Case Study Property 2
9-year hold / Current Yield 9.2% / Total Return 13.5%
Acquisition of a large, warehouse and distribution facility leased to a credit tenant; located in Ames, IA. Due to the sale / downsizing of the tenant, this case study highlights Cardinal’s disciplined focus on big box properties which facilitates retrofitting and releasing.
Investment Hold: 04/2005 – 07/2014
Investment Thesis: Investment represented the opportunity to acquire a well-positioned, warehouse and distribution facility totaling 577,000 sft. in Ames, IA. The acquisition featured a lease to a credit rated Fortune 500 plastics distributor with 10 years of remaining term and an adjacent manufacturing facility in which the tenant had invested approximately $100M in operating equipment. The tenant was subsequently sold and downsized, at which point Cardinal secured two additional tenants, increasing occupancy back to 100% and subsequently sold the property.
Returns: In spite of the sale to and downsizing by the new tenant, Cardinal generated strong risk-adjusted returns over the 9 year hold period: 9.2% Cash-on-Cash, 13.5% Total Return and 2.3x Equity Multiple.
|Price per Sft||$44|
|Entry Cap Rate||7.3%|
|Acquisition Strategy Type||Yield|
|Net IRR (Leveraged)||13.5%|
|Hold Period||9 Years|
|Year Built / Renovated||1999, 2002|
|Total Square Feet||576,876|
|Lease Term Start||2003|
|Lease Term End||2018|