An affiliate of Wyatt Capital, LLC (“Wyatt”) acquired 1357 Collier Road for $4 MM in November 2017 after a very quiet and limited marketing effort by the seller. The building is a 50,000 sf brick warehouse building that had been partially converted to retail showroom use by the previous owner for her business. Wyatt arranged a short term sale leaseback with the seller and promptly leased the entire building to a regional retail showroom furniture tenant (Stock & Trade Design Co.) under a long term lease arrangement.
The initial investment thesis was to relet the building or redevelop for loft office. The new tenant lease was arranged quickly after acquisition and was the most financially accretive and risk mitigating path forward for the investment. Wyatt replaced the roof and made other minor base building improvements as part of the new lease and the tenant contributed all of it’s tenant improvements and occupied in late summer 2018. Wyatt refinanced the original debt upon occupancy by the new tenant and was able to return almost all of the original equity principal within 15 months of the original investment.
Due to the coupon cash flow and yield available under the long term lease, Wyatt formally offered the asset to the broader investor market in a defined marketing campaign that yielded a price of $9.75 MM from an institutional investor less than two years after Wyatt’s acquisition of the property.
Annualized project level returns for this investment were 103.8% with an equity multiple of 2.58X.