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 Overview

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.


Transaction Overview

Price $25,582,668
Price per Sft $44
Entry Cap Rate 7.3%
Equity $5,300,000
Debt $20,282,668
Acquisition Strategy Type Yield

Investment Returns

Net IRR (Leveraged) 13.5%
Cash-on-Cash (Avg.) 9.2%
Equity Multiple 2.3x
Hold Period 9 Years

Property Overview

Property Type Warehouse
Year Built / Renovated 1999, 2002
Total Square Feet 576,876
Occupancy 100.0%
Lease Term Start 2003
Lease Term End 2018
Lease Structure NNN