60 & 70 Centre of New England
Why Is This a Fulcrum Property?
- Value Opportunity
- 100% Leased To Two Credit Tenants With Multiple Options To Extend
- Future Value Potential To Increase Returns
- Strategic Location
Value Opportunity
- Purchase price at $1,600,000 ($45.90/SF) for 34,860 square feet of state-of-the-art, cross- dock, high-bay warehouse; significantly below replacement cost.
- Purchase price also includes a separate 3.78 acre, ready to build development site
100% Leased with Multiple Options to Extend
- Ryan Herco Flow Solutions—a leading national distributor for fluid filtration systems & fluid handling products; good credit, strong private equity capital backing (Greenbriar Equity) New 10-year lease for 21,600 SF with options to extend to 2045
- SolarCity—the national leader in full-service solar power systems for homes, businesses and governments; NASDAQ listed company financially backed by Elon Musk New 49-month lease for 13,860 SF with options to extend to 2023
- Each lease has contractual 1.5% annual rent increases over the initial term and any extension options
Future Value Potential to Increase Returns
- Returns are calculated exclusive of the separate 3.78 acre, ready to build development site; the site can be sold to a user (market value of land in the park is estimated by local brokers to be $100,000 – $150,000 per acre), or developed by Fulcrum to add approximately 35,000 square feet, doubling the current leasable square footage of the property.
Strategic Location
- Property is located in a developing industrial park (Centre of New England) approximately ½ mile off I-95 at Exit 6A in Coventry, RI; Coventry is located in the geographic center of Rhode Island along I-95, the major North-South highway serving the eastern seaboard of the United States.
Fulcrum negotiated and closed in July 2015 under terms that rewards our investors with a 8.5% preferred return (paid quarterly), targeting an overall annualized return of 15.0+% over the life of the investment.
These properties were originally acquired by the seller (Spirit Realty Capital) through a $2.0 B purchase of another REIT and were part of a national portfolio of DHL facilities. 60 CoNE (separate 3.78 acre land parcel) & 70 CoNE (separate 34,860 SF facility on 3.56 acres) were immediately identified as outliers in the portfolio as they were vacant and too small to warrant the attention of the REIT. They were marketed “as is” through a nationally affiliated brokerage firm for sale or for lease. The seller would not consider leasing the property to more than one tenant and then only on an “as is” basis. The broker had not been able to identify any single users to purchase or lease the facility, but he had several smaller tenant requirements which had an interest in leasing a portion of the building. Based on a 25-year relationship between the principals of Fulcrum and the listing broker, we were given a “first look” at trying to construct a deal. That entailed negotiating leases with the interested tenants, and, independently and simultaneously, negotiating with the seller to purchase their vacant properties. For more information read the Investment Highlights above.
Address: 60 & 70 Centre of New England Boulevard (CoNE), Coventry, RI
Site: 3.78 Acres – 60 Centre of New England; 3.56 Acres – 70 Centre of New England
Square Feet: 34,860 SF
Year Built: 1998
Property Use: Warehouse/Distribution
Zoning: Industrial
Tenancy: 100%, NNN Leased to two national tenants
Tenants: Ryan Herco Flow Solutions & SolarCity
Water & Sewer : Kent County
Gas & Electric: National Grid
Site: 3.78 Acres – 60 Centre of New England; 3.56 Acres – 70 Centre of New England
Square Feet: 34,860 SF
Year Built: 1998
Property Use: Warehouse/Distribution
Zoning: Industrial
Tenancy: 100%, NNN Leased to two national tenants
Tenants: Ryan Herco Flow Solutions & SolarCity
Water & Sewer : Kent County
Gas & Electric: National Grid