Successful Opportunistic Investment
Converted Purchase Option with Long-Term Leaseback
Rationale:
In 2016, Lotus Capital, in partnership with Crux Capital, acquired a property purchase option on a 171,000 sf single tenant, institutional quality manufacturing facility at an attractive price from the tenant, in exchange for restructuring and extending the tenant’s lease to reflect prevailing market terms.
In 2016, Lotus Capital, in partnership with Crux Capital, acquired a property purchase option on a 171,000 sf single tenant, institutional quality manufacturing facility at an attractive price from the tenant, in exchange for restructuring and extending the tenant’s lease to reflect prevailing market terms.
Realization:
Three-way negotiations with the tenant and owner led to a $25 psf purchase, well below replacement cost, and a long-term lease at market rents with contractual rent escalations.
Three-way negotiations with the tenant and owner led to a $25 psf purchase, well below replacement cost, and a long-term lease at market rents with contractual rent escalations.
Returns:
Secured first mortgage acquisition financing for 100% of $4M purchase price and sold four months later for $6M:
Secured first mortgage acquisition financing for 100% of $4M purchase price and sold four months later for $6M:
|
100% of Purchase Price Financed |
4x Equity Multiple |
4-Month Hold Period |
