Design Your Own Global Diversified Portfolio in USA Industrial Warehousing
from Your Couch
Discover Profitable Investment Opportunities in Phoenix, Arizona
Invest in a diversified portfolio of high-performing assets across multiple sectors and geographies. Connect with us to learn more about how you can benefit from our unique experience in identifying strategic investment opportunities.
Design Your Own Global Diversified Portfolio in USA Industrial Warehousing
from Your Couch
Discover Profitable Investment Opportunities in Phoenix, Arizona
Invest in a diversified portfolio of high-performing assets across multiple sectors and geographies. Connect with us to learn more about how you can benefit from our unique experience in identifying strategic investment opportunities.
LOCATION
Phoenix, Arizona, United States of America
Phoenix is a top-tier industrial market with exceptional stability, low vacancy rates, and double-digit rent growth. The area is experiencing significant gentrification and development, making it a prime location for investment. Macro trends show robust population growth and business-friendly policies, while micro trends indicate increasing demand for industrial space and technological advancements.
Macro and Micro Highlights of Phoenix
Economic Growth: Phoenix’s GDP growth has outpaced the national average.
Job Market: Phoenix has added over 100,000 jobs since the pandemic, with low unemployment rates.
Population Growth: Continues to attract new residents, fueling housing and commercial real estate demand.
Industrial Market: Top industrial market with low vacancy rates and strong rent growth.
Tech Investment: Significant investments in semiconductors, chips, and batteries.
Business Environment: Favorable tax policies and regulatory support.
Education and Innovation: Home to top-tier universities and research institutions.
For more detailed information, please refer to the Economic Snapshot Q3 report.
DEAL HIGHLIGHTS
Key Highlights of the Deal
Purchase price = $150 / ft
- 39% below replacement cost13% rent growth in area
Sub 4% vacancy
8% CAP in a 5.8% CAP market
High barrier to entry as little availability in the area
18 year lease
25 year old company – motor parts (AirBagIt)
3% and then 2% rental escalation
Reinvest $250k back into property
$6m in revenue and aiming for $12m (why selling)
$10,4m all in
Colliers believes there is $1m in value at close and passed on to investor
6.5% cash on cash
Debt for 7 years at 5,9% and 70% LTV
Personal recourse (DWG)
Cold Storage
Vacancy defensibility
18 year lease Security
Mike Wilson (owner) has personally guaranteed the lease
Strong market comparables
Construction pipeline in Mesa is minimal, as sub-market continues full build-out
Projected Opportunity in Numbers
6.5% Cash on cash
17% target IRR
3 to 5 year hold
Put in $100k aim to double it in 5 years
2x Equity multiple
ROI of roughly 20%
Building is owned, this is an equity release and buying at 2023 price and earning income straight away.
DEAL PARTNER
Deal provider DWG Capital Partners
DWG Capital Partners is the sponsor of this investment opportunity, leveraging over 20 years of capital markets experience. They specialize in sale-leaseback transactions and have a proven track record of managing high-value properties and securing attractive financing. DWG Capital Partners focuses on strategic investments that align with investor interests, ensuring sustainable growth and robust returns.
DEAL PARTNER
Deal provider DWG Capital Partners
DWG Capital Partners is the sponsor of this investment opportunity, leveraging over 20 years of capital markets experience. They specialize in sale-leaseback transactions and have a proven track record of managing high-value properties and securing attractive financing. DWG Capital Partners focuses on strategic investments that align with investor interests, ensuring sustainable growth and robust returns.
ASSET CLASS / PROPERTY DETAILS
Asset Class: Industrial Warehousing
Industrial properties are crucial for the storage, distribution, logistics and manufacturing sectors, making them a stable investment in the right environment. The demand for industrial space has surged due to the growth of e-commerce and logistics industries. These properties often see consistent demand, low vacancy rates, and steady income streams.
NNN Lease
A Triple Net (NNN) lease is a strong investment because the tenant is responsible for property taxes, insurance, and maintenance, reducing the landlord's operational risks and ensuring a steady income stream.
Property Details
Location: 260 S Hibbert St, Mesa, AZ
Type: Free-standing manufacturing and distribution facility
Size: 72,780 sq. ft. on 1.90 acres
Purchase Price: $9,640,000 at an 8.00% cap rate
Features: 20-foot ceilings, external docks, potential for cold storage, temperature-controlled areas
Tenant Details
AirBagIt
AirBagIt is a well-established manufacturer of motor vehicle parts and accessories, specializing in air suspension systems. Founded in 1987, AirBagIt has been a pioneer in its industry, offering innovative products and maintaining a strong market presence. The tenant's 18 year long-term NNN lease with annual rent escalations ensures a stable income stream for investors.
JAL Equity
JAL Equity, providing surety for this property, specializes in acquiring and managing profitable businesses across various sectors. They ensure sustainable growth and robust returns for investors by leveraging their extensive market experience and strategic investments.
Marketing.com
Marketing.com is a comprehensive marketing services provider that offers digital marketing, commercial printing, signage, promotional products, and creative services. Their extensive experience and market reach further enhance the stability and potential of this investment.
Investment Risk and Reward
Investment Risk and Rewards Outlined
This investment offers a balance of high returns and managed risks, making it a compelling opportunity in a thriving industrial market.
Risk Management
Cap Rate: Offering an 8.00% cap rate, this property provides a higher-than-average return, balancing potential market fluctuations.
Location Risks: While Phoenix’s booming industrial market reduces risk, economic downturns and market saturation are potential concerns. Continuous monitoring of these factors helps mitigate these risks. This is also mitigated because this property is located in Urban Fill in Phoenix with limited supply in the city.
Tenant Stability
Default Risk: AirBagIt’s long-term lease and financial health minimize the risk of tenant default. JAL Equity's surety provides additional security.
Lease Expiry: The long-term lease reduces immediate risks, though future market conditions could affect renewals or rental rates.
Surety by JAL Equity: JAL Equity’s strong track record adds a layer of financial security, though any financial difficulties they face could impact their surety obligations.
Property Specific Risks
Maintenance and Repairs: Despite the NNN lease, unexpected repairs could arise. Regular assessments and tenant responsibility mitigate this risk.
Market Value Fluctuations: While Phoenix’s high-demand market helps, property values can still fluctuate based on broader conditions.
Market and Economic Risks: Economic recessions and rising interest rates can affect demand and borrowing costs. Phoenix’s diverse economy and current fixed-rate financing provide some protection.
Regulatory Risks: Changes in zoning or environmental regulations could impact property use and value. Staying informed and compliant mitigates these risks.
Reward Potential
Preferential Return: Approximately 6.5% annual return for the first two years, increasing by a targeted 0.25% annually, ensures reliable income and long-term profitability.
Projected ROI: Expected 17.0%-22% ROI over the next 3-4 years, driven by a high cap rate and strong market demand.
Tax Benefits: Significant tax advantages through cost segregation and accelerated depreciation strategies increase overall returns and provide immediate benefits.
Market Growth: Phoenix’s rapid growth due to population influx, business-friendly policies, and high demand for industrial space enhances property value and rental income potential.
DEAL WEBINAR
Watch Our Deal Launch Webinar to Learn More
Discover This Exciting Investment Opportunity. Watch our exclusive live webinar to get in-depth insights into this exceptional investment deal directly from Judd Dunning, President of DWG Capital Partners.
What you'll learn:
Expert Insights: Learn about the investment's features, tenant stability, and benefits of investing in Phoenix.
Direct Access: Hear from Judd Dunning, a real estate investment expert with over 20 years of experience.
Webinar Details:
Date: 5th June 2024
Time: 6pm UK | 7pm SAST
Don't miss this chance to enhance your portfolio. Secure your spot now.
Judd Dunning
DWG Capital Partners
Judd Dunning
DWG Capital Partners
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