Tenant

Arizona Natural Resources (ANR), founded in 1972, is a manufacturing facility located in Phoenix, AZ specializing in chemical formulation and contract manufacturing solutions for skin and hair care products.

Acquisition

ANR was acquired by a Chicago, IL based private equity firm in 2020. The firm completed a SLB with our partner simultaneous with its acquisition of ANR and invested institutional proceeds from the sale into the operating company. Our partner was awarded the opportunity besting 10 buyers and closing in 23 days.

Lease

New 20-year, Absolute NNN lease with 2% annual rent increases and quarterly financial reporting

Cash on Cash

Investor Cash on Cash
began at 8.5% and escalates annually

Initial investment

• 131,000 SF – Single Asset
• Total Capitalization: $13,700,000
• Equity : $4,100,000
• Debt: $9,600,000

Value Add

Speed and execution surety provided the opportunistic acquisition, with returns further compounded by CAP rate compression from the tightening Phoenix market. ANR’s credit also continues to strengthen both through organic growth, increased sales and add-on platform acquisitions facilitated by the firm Industrial’s strong private equity sponsorship.

Exit + Returns (2022)

Exit: The investment is currently estimated to be worth $22,000,000 in current market. Returns: Projections at acquisition of 19% returns. Insert: Under current market conditions, we believe that final return would exceed target projections.

Tenant

Gamma Aerospace, founded in 1971, is an aerospace manufacturing facility located in Dallas-Fort Worth supplying Tier-1 firms including Boeing, Airbus, Lockheed, L-3 and Bell.

Acquisition

Gamma Aerospace was acquired by a private equity firm. The private equity firm and our partner executed a sale leaseback of real estate in Mansfield, TX, deploying proceeds into capital improvements at the site and operating company

Lease

15-year, absolute NNN lease with 2% annual rent increases

23K SF expansion, fresh 20-year lease extension upon completion

Cash on Cash

LP annual cash-on-cash began at 8%, increasing to 10% through annual rent escalations.

Initial investment

• 123,000 SF – Single Asset
• Original Capitalization: $5,900,000
• Expansion: $4,300,000
• Equity : $1,350,000
• Real Estate Debt: $8,850,000 (original and construction)

Value Add

After acquiring the real estate in a sale leaseback, our partner financed and constructed a 23,000 SF expansion of the manufacturing facility. Upon completion of construction, the lease was extended to a new 20-year term.

Exit + Returns (2022)

Exit: Gamma sold to large Fund after approximately 4 years. Returns: Investors achieved average annual returns of 18%, exceeding targeted returns of 16% by 200 basis points.

Tenant

Metal Powder Products (MPP), founded in 1948, is a global provider of custom-engineered powder metallurgy solutions to a variety of industries.

Acquisition

MPP was acquired in 2016 by a New York City based private equity firm. The firm executed a sale leaseback of five locations located in Indiana and Pennsylvania to our partner in 2021, investing proceeds into the tenant operating company.

Lease

New 20-year, Absolute NNN lease with 2% annual rent increases and quarterly financial reporting.

Cash on Cash

Investor cash-on-cash began at 8% and increases to 10% from annual rent escalations

Initial investment

• 484,000 SF – 5 Property Assets
• Total Capitalization: $27,150,000
• Equity: $10,700,00
• Recourse Debt: $16,450,000

Exit + Returns (2022)

Exit: MPP sold as part of a portfolio sale in 2022. Returns: Investors achieved average annual returns of 20.6%, exceeding targeted returns of 18% by 260 basis points.