Case Studies

Retail: Westminster, Colorado

Retail: Westminster, Colorado

HG Capital provided equity to complete a discounted note payoff on a 24,000 sf retail center in Westminster, CO. The total cost basis, including the discounted note, was just over $140 psf. The property was 55% occupied at the time of the transaction. Following the successful lease-up of the property, it was sold for approximately $250 psf.

HG Capital most frequently invests as a joint venture equity partner alongside its operating partners. However, in this case, HG Capital was able to tailor a creative preferred equity structure. This provided the operating partner the speed of execution necessary to take advantage of a discounted note payoff, while providing HG Capital an attractive risk adjusted return on the investment.


Logistics Facility: Vernon, California

Logistics Facility: Vernon, California

HG Capital and its operating partner acquired the property from a corporate seller in need of short term liquidity. While in escrow, the operating partner successfully negotiated a long term lease renewal with the existing tenant, producing a 14% initial unlevered return on the investment.

HG Capital was able to quickly underwrite the project, form a joint venture, and fund the acquisition. Less than two years later, the property was sold to an institutional investor for a sub-7% cap rate.

HG Capital's speed of execution, brand name amongst local “sharp shooter” operating partners, and familiarity with the underlying real estate fundamentals made this successful investment possible.


Self Storage: Tempe, Arizona

Self Storage: Tempe, Arizona

HG Capital and its partner acquired a well-located, but undermanaged self-storage facility in Tempe, Arizona. The investment provided an initial yield on equity in excess of 10%.

Following acquisition, the property was actively managed, resulting in increased occupancy and revenue. Property upgrades included LED lighting, new signage, and improvements to the office and parking lot.

The property was sold in Q2, 2015, producing a 40% IRR in just under three years to HG Capital.

This was HG Capital's first investment with the local operating partner after cultivating a relationship with the firm over several years. HG Capital's established trust and long term relationship with the operating partner along with HG Capital's familiarity with this specialty real estate sector made this successful investment possible.

 

Industrial R&D: Sorrento Mesa, California

Industrial R&D: Sorrento Mesa, California

HG Capital and its operating partner acquired the property from a family trust at a 45% discount to replacement cost due to a high probability that the building would need to be refurbished and re-leased within a year of the initial purchase.

Upon acquisition, the joint venture improved the property with a new roof, HVAC system, lighting, paint, concrete, and various fixtures. Within eighteen months, the property was sold to an owner/occupier at a significant premium to the purchase price.

HG Capital's efficient team structure and familiarity with both the underlying real estate sector and local market made this successful investment possible.