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
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
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%.
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.