Project name
Granada Square (FULLY FUNDED)
Location
Granada Square, Albuquerque, New Mexico, USA
Initiator
REALIANCE USA B.V.
Local partner
Beacon Advisors
Category
Mixed-use business center of 116,445 sq.ft. (10,818 m2), located in Albuquerque, New Mexico (USA), delivered in phases in 1991 / ‘87 / ‘74 and partially renovated
Purchase price of US$ 4,825,000 was only US$ 41.43 per sq.ft., well below the new construction value (approx. US$ 100 – US$ 120 excluding land) and is sold in 2007 for US$ 13,500,000.
Net Operating Income (NOI) of approx. US$ 600,000 per year rising to US$ 725,000 in year 5, with initial rent reductions with the aim of securing longer leases.
Cap rate on acquisition of 12.4%, as the project is owned by the bank; on ‘exit’ a (conservative) cap rate of 9% is applied.
Favorable financing conditions with an interest rate of 4.1% (5-year fixed) and leverage of 53%, resulting in direct cash return after loan repayment of over 8% (rising to over 12%).
Projected total return of 118%, assuming a 5-year term.
Unique selling points
Stable demographic and economic market conditions in Albuquerque.
Located in an excellent high visibility location and well accessed by Interstate 25.
Occupancy approx. 83% with good mix of tenants.
Renovation and adjustment of cost structure offer good opportunities for cash flow improvement.
Simple structure through participation in a U.S. Capital Limited Partnership, which holds a 50% interest in the Limited Partnership that owns the property.
Through local partner RW Partners, half of the equity has been contributed
For more information you can reach REALIANCE at +31 (0) 20 21 03 180 or invest@realiance.nl.
