60 Stergis Way

Deal Complete

60 Stergis

Why Is This a Fulcrum Property?

  • Value Opportunity
  • 100% Leased with Multiple Options to Extend
  • Future Potential to Increase Returns
  • Re-zoning Approved by Town November 17, 2014
  • Strategic Location
Value Opportunity

  • Purchase price at $2,200,000 ($110/SF); significantly less than recent user sale comps
  • In-place rental rate is below local market rate for similar space

100% Leased with Multiple Options to Extend

  • Good credit, nationally recognized tenant (John Deere Landscapes)
  • Options to extend through 12/31/23
  • Contractual 3% annual rent increases over the initial term and any extension options

Future Potential to Increase Returns

  • Targeted “upper-teens” to mid 20%+ potential total returns depending on use/reuse of property after current tenant
  • Options to re-lease at higher market lease rates, sell to the “user” market, or sell to eventual developer of newly retail re-zoned area

Re-zoning Approved by Town November 17, 2014

  • Allows for greater density and additional uses including retail…which market rents are at least double the current rent at the property in its current use
  • Town – commissioned market study underway to consider “transit-oriented development” options for this re-zoned area

Strategic Location

  • Within ½ mile of the intersection of I-95 and Route 1 – immediately adjacent to Legacy Place
  • Building includes fenced-in outdoor storage … a coveted attribute and difficult to find inside of 128/95

Fulcrum negotiated and closed in June 2015 under terms that rewards our investors with a 7.0% preferred return (paid quarterly), targeting an overall annualized return of 15.0% with potential to achieve 20+% over the life of the investment.

The Sellers owned an irrigation business (BISCO), and the property from which the business operated. While they were able to sell the business (to John Deere Landscapes, since rebranded as SiteOne Landscape Supply), they could not convince this corporate buyer to purchase the real estate, as well. This required the sellers to quickly fashion a short-term lease with John Deere in order to complete the sale of their business. The real estate was then offered to the market for sale with high pricing expectations, but with a short-term lease in place to try to justify such pricing.

In many cases, short-term leases are not favored by investors, because of the potential near-term re-leasing risks, which will dampen their concept of value, and in many cases, their level of interest. Fulcrum saw value beyond the short-term lease. For more information read the Investment Highlights above.

Address:  60 Stergis Way, Dedham, MA  
Site:  1.02 Acres
Square Feet:  20,000 SF
Year Built:  1971
Property Use:  Flex office/warehouse and “to the trade” sales for landscapers
Zoning:  Highway Business (HB) (Re-zoned for retail uses, 11/17/14)
Tenancy:  100%, NNN Leased through December 2017
Tenant:  John Deere Landscapes
Water:  Town of Dedham
Sewer:  Town of Dedham
Electric: National Grid (served by two power grids)