|Current Ann. Return||12.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||12.0%|
|Accrued Ann. Return||+ 0.0%|
|Gross Ann. Return*||12.0%|
|Term Remaining||0 of 36 mo.|
|Underlying Security||Preferred Equity|
This is an opportunity to invest in a series of Notes tied to a preferred equity investment in the acquisition and recapitalization of a 125k SF Class ‘A’ flex office property located in Prince William County, a Northern Virginia suburb of Washington, DC. The sponsor, Buchanan Partners, originally developed the property in 2006 and recently negotiated a purchase of the asset outright from their initial JV equity partner in March 2015.
The preferred equity investment represents approximately 7.5% of the total capital invested in the project and is junior to a $15,375,000 senior loan from TD Bank. The investment has an initial term of 36 months and is projected to pay investors an annual gross return of 12% paid all current on a quarterly basis.
The sponsor, Buchanan Partners, was founded in 1998 and since that time has acquired, developed, and owned over 5 million square feet of property including 4,000 residential units across the DC metro market, with current developments in Alexandria, Prince William, and Loudoun Counties in Northern Virginia.
The property “IBC I” was originally developed by the sponsor in partnership with a private equity fund in 2006. The private equity fund recently began to wind down its real estate investments in 2014 necessitating a disposition of all its assets including its ownership stake in IBC I.
The property is currently 100% occupied by eight high-quality tenants including Nikon, Tokyo Electron, The Commonwealth of Virginia, and Prince William County. The sponsor was able to purchase the property at a price of $19,250,000 which represents a going in cap rate of 10.96% on the existing in place NOI and all-in price per square foot of $153/SF - slightly below replacement cost.
Buchanan Partners, one of the largest developers in the DC metropolitan area, has personally guaranteed the investment. Since their founding in 1998, they have made over $1 billion in total investments and developed over 5 million square feet of space.
Buchanan Partners developed the property in 2006 with co-investment equity partner, who held an 80% equity interest. The equity partner began to wind down all of its real estate investment funds starting in 2014 and as a result was obligated to sell their interest. Buchanan Partners was able to acquire the asset at a favorable basis of a 10.96% cap rate and $153/SF (close to replacement cost).
The asset is currently 100% leased and cash flowing. While all leases will be rolling over the next three years, the sponsor's attractive basis in the property will give them the ability to reset rents to market pricing, retaining quality tenants.
Many tenants have made significant investments to build out and improve their space. The largest tenant, Nikon Metrology, houses their entire R&D and assembly operations for their Laser Radar product at Innovation Business Center I.
|Gross Annual Return*||12.0%|
|Capital Senior to Fundrise||70-79%||4|
|Capital Junior to Fundrise||10-19%||4|
|Sponsor’s Track Record||$250 million or more||1|
The information contained in the Fundrise Rating is for informational purposes only. It is impersonal and not individualized for any specific investor's financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. You should always carefully consider investments in any security and be comfortable with your understanding of the investment. You may also consider consulting investment professionals.
|Type||Source||% of Total||Amount|
|Equity||Sponsor and LPs||15.6%||$3,125,000|
|Preferred Equity||Fundrise Investment||7.5%||$1,500,000|
The subject property consists of three single-story flex/office buildings that total 125,452 square feet, located at 9371 Innovation Drive in Manassas, Virginia. The buildings were constructed in 2006 and are situated on an 11.5 acre site. The clear height of the buildings is 18 feet and the office finishes account for approximately 76.4% of space. Currently, the property is 100% occupied.
|Address||9371 Innovation Drive|
|City & State||Manassas, VA|
|Product Type||Office / Three buildings|
|Project Phase||Stabilized / Fully Occupied|
The property is located within Prince William County, VA, one of the fastest-growing and wealthiest counties in the Washington-Arlington-Alexandria Metropolitan Statistical Area (MSA). Since 2000, the county’s population increased more than 50%, to nearly 426,000. Population growth is expected to continue and grow a further 32% by 2030 according to studies conducted by the Metropolitan Washington Council of Governments. In 2013, the median household income was $95,268, ranking the county 12th among the largest counties in the United States according to the US Census Bureau.
Within Price William County, the property is located in Innovation Technology Park (“The Park”), a 1,600 acre public-private cooperative venture anchored by George Mason University’s Prince William Campus in Manassas, VA. Demand drivers for IBC I and future flex office space include corporations and institutions surrounding the complex, such as George Mason University, The FBI, Micron, ATCC, Logis-tech, and Zestron. IBC I is centrally located in The Park, which also features popular amenities like the Freedom Aquatic and Fitness Center and the Hylton Performing Arts Center.
Buchanan Partners is a leading full service real estate development firm operating in the Washington, D.C. region. Since 1998, Buchanan has made nearly $1 Billion in total investments, with over $250 million in equity capital invested with multiple institutional partners.View full profile
|Gross ann. return*||12.0%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||11.7%|