Acquire Real Estate is pleased to offer an investment opportunity in Marketplace Center, located in Warwick, RI (“Property” or “Shopping Center”). The Property was recently purchased by an investment syndicate sponsored by The Grossman Companies (“Sponsor”). Acquire Marketplace LLC (the “Company”) owns 9.02% of the Membership Interests in the Sponsor’s investment syndicate.
|| Acquire Marketplace LLC (the “Company”)
|Investment Entity Manager
||Acquire Advisory LLC (the “Manager”)
|Ownership Interest in Sponsor Syndicate
Acquire Real Estate Investor Projected Returns
|Avg Cash on Cash (average annual cash on cash throughout investment period)
Marketplace Center consists of a fully leased, ±56,176 square foot retail building on ±8.6 acres located in Warwick, RI. The Property enjoys visibility along Bald Hill Road with tremendous frontage and average daily traffic counts of 44,000. Additionally, the Property benefits from ample parking (4.3 spaces per 1,000 SF) and a pylon sign with close proximity to the street. The Property is well-located within Rhode Island’s most robust retail corridor. Bald Hill Road is anchored by the Warwick Mall and Rhode Island Mall and has easy access to I-95 and I-295. Marketplace Center is sited near the middle of the retail corridor. Of note, the Sponsor has a history of property ownership on Bald Hill Road recently selling the adjacent property, 1400 Bald Hill Road.
The Property has one anchor tenant, LA Fitness (46,564 square feet, lease expiration August 2030). This lease accounts for 83% of the rentable space and 80% of the revenue. LA Fitness is a new tenant to the Property, recently opened in mid-April 2015 and is a “category killer” in its retail category.
During the economic downturn, retail sales on Bald Hill Road did not suffer the way they did in other areas. This resiliency is because the Bald Hill retail corridor services the entire State of Rhode Island as well as portions of Southeastern Massachusetts. The following notable tenants have stores nearby whose sales volume have continually matched or exceeded their national store averages: Best Buy, Target (2 stores, totaling $75 million), TJMaxx/HomeGoods, Dick’s Sporting Goods2, Petco, Babies ‘R Us, Stop & Shop, Bob’s Store, Marshall’s, Macy’s (highest per square foot store sales in New England).
The Property which sits across from Best Buy, Target, Sam’s Club and at the foot of Dick’s Sporting Goods is at the intersection of “Main and Main” for retail real estate for the state of Rhode Island. It is fundamentally strong in a market that has routinely displayed its strength in terms of quality of retailers and sale volume stability in both good times and bad.
The purchase price represents an approximately 7.7% capitalization rate. This investment provides stable and long term cash flow while prudently reducing the outstanding debt balance over time. This is a unique circumstance where the certainty of the cash flow is high given the contractual term and quality of the tenancy and the outcome of this investment does not rely heavily on the sale price .
At a 7.7% going-in cap rate, the investment is expected to produce ample cash flow from inception. The Property’s location and long-term stability of tenancy make it particularly attractive to lenders. Because of the going-in yield and current debt markets, this investment is projected to yield strong current cash flow and the net return is not heavily weighted towards the terminal value of the real estate.
Warwick, RI is a dense, urban retail node with 135,000 people within a five mile radius, and an average household income of $81,000.
LA Fitness, the anchor tenant, is the leader in its respective niche. LA Fitness is investing heavily into this location and has committed/opened two other locations in the Rhode Island market.
Location and Presence on Bald Hill Road
Located at the intersection of Route 2 (Bald Hill Road) and Route 117 along the area's most vibrant retail corridor, boastin major neighboring retailers including Walmart, Target, Kohl's, Dick's Sporting Goods, TJ Maxx, Home Depot, Sam's Club and Stop & Shop amoung others.
Situated adjacent to U.S. I-95 (146,000 vehicles per day) at Exit 10, Marketplace Center has excellent visibility and seamless access with two signalized entrances and prominent pylon signage along Bald Hill Road, which see over 44,500 vehicles per day
Complimentary Unowned Tenants
The site includes three high-volumn, in-line retailers, including Jo-Ann Fabrics, Bed, Bath & Beyond, Michael's and Bob's Furniture Store as well as two outparcels housing Rhode Island's only Chick fil-A and TGI Friday's.
The Grossman Companies, Inc. has deep roots investing in retail real estate in New England and, notably, an affiliate of the Sponsor owns the abutting property. Furthermore, the Grossman Family has committed a significant amount of the equity required for this investment north of 30%.