NAPA Condo Bays
LOCATION: Bays 1 & 2, 7659 Edgar Industrial Drive, Red Deer, Alberta
DATE PURCHASED: September 16th, 2020
CASH ON CASH RETURN: 7.6% Average over 5 years
COMPOSITE RETURN: 14.8% Average over 5 years
TENANCY: UAP INC.
YEAR BUILT: 2001
FOOTAGE: 11,325 Sq. Ft.
JOINT VENTURE: Safety First Projects 12 Ltd.
The process of sourcing attractive investment deals involves maintaining relationships with good Commercial Realtors. The UAP/NAPA deal was presented to us by Re/Max Commercial in Red Deer. The property is two Industrial Condos on Edgar Industrial Drive, the major thoroughfare through the centre of the Edgar Industrial Subdivision. The owners of the property had owned it for many years and desired to sell but with so many industrial properties on the market at this time due to the downturn in the Oil and Gas industry, they had no success in finding a Buyer. Re/Max Commercial astutely approached the assignment in two stages. Firstly, lease the properties to a national tenant on a five year NNN Lease and secondly, put the newly leased property before an Investor Group such as Legacy/Sundance. We identified immediately that the leased property had all the components that we look for – great location, strong National Tenant, a new five year lease at modest market lease rates, two lease renewal options and an attractive building with good curb appeal. The Cash Return on Investment penciled out to 7.4% average over the term of the lease and the Composite Return (distributable cash plus equity gain through paying down loan principal) penciled out to 14.6%.
This property by all accounts should be a very good long term holding.