5250 Giron Circle, Kissimmee, Florida
Giron Circle is a three building multi-tenant (flexible) warehouse space, located in Kissimeee – a part of the Orlando metropolitian statistical area that has a population of 2.1m people
The property was constructed in 2008, just before the worst of the economic downturn unfolded. Subsequent to that, the owner-developer (Salvador Construction) defaulted on the loan and the property went into foreclosure. Interestingly, Salvador Construction remains as a tenant in the building.
There are three buildings are situated on 4.05 acres of land and comprise a total of 40,500 square feet, split as:
- Building A: 19,500 square feet.
Split into 13 units, with one tenant occupying 6,000 square feet.
- Building B: 3,000 square feet.
Presently shell space as it was not fitted out into × 1,500 square feet of flexible space.
- Building C: 18,000 square feet.
Split into 7 × partitioned 1,500 square feet flexible spaces, and 1 × 7,500 square foot open space.
At purchase there are 8 tenants occupying 33% of the available space. This is indicative of a property being acquired as a foreclosure from the bank, with foreclosure sales notoriously poorly managed.
Disclaimer: Information provided about forecast annual net cash flow and cash on cash returns are derived from unaudited financial projections. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Responsible Entity. The Responsible Entity cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.
|Acquisition date||13 December 2013|
|Contract purchase price||$975,000|
|Original listed price||$1,350,000|
|Discount to listing price||$375,000 (27.7%)|
|Independently appraised price||$1,030,000|
|Occupancy at purchase date||33%||Appraisal date and appraiser||2 November 2013
Valbridge Property Advisors
|Finance terms||Cash purchase.|
|Gross Building Area||40,500 sq ft (3,763 sq mtrs)|
|Land size||176,418 sq ft (16,390 sq mtrs)|
|At purchase estimated net operating income||$0|
|At stabilized estimated cap rate||13.53%|
|At stabilized estimated cash on cash return||19.21%|
Currency: All numbers are shown in USD. Returns shown have not been translated into Australian dollars as the exchange rate varies. A AUD:USD exchange rate below AUD1:USD1 will increase the percentage return. A AUD:USD exchange rate in excess of AUD1:USD1 will decrease the return.
Management costs: Returns shown above include US management costs, but exclude the management fee charged by the Responsible Entity (1.98% per annum of Gross Assets).
Returns: Returns prior to the property being stabilized are expected to be lower than those forecast above as once off due diligence costs are absorbed, and as less income is received from vacancies as at purchase date. Unless otherwise noted, properties are expected to be stabilized within 12 months of acquisition.
More information on key terms:
|Net operating income:||Operating income – operating expenses|
|Capitalization rate:||(Net operating income ÷ Purchase price) × 100|
|Cash on Cash return:||(Annual cash back ÷ Cash down) × 100|
|Current stabilized capitalization rate:||Using unaudited management forecasts, the estimated capitalization rate in the second year assuming the rental and property expenses have been stabilized.|
|Current stabilized cash on cash return:||Using unaudited management forecasts, the estimated cash on cash return in the second year assuming the rental and property expenses have been stabilized, and assuming either actual finance terms (where applicable), or else assuming an interest only loan of 40% of purchase price at 5% interest-only.|