This document discusses an investment opportunity involving a mixed-use property located at 1050 Lancaster Avenue. The property consists of 4 commercial units, 2 student apartments, 1 office, and 1 garage for a total of 7,500 square feet. The investor proposes 3 capital projects: improving the parking lot, updating the exterior facade, and rehauling the back courtyard. They also want to improve the tenant mix by filling the current vacancy and adding 2 popular restaurants. Financial projections estimate property investment returns of 8-12% and equity investment returns of 13-21%, depending on the purchase price. The document argues this is an investment opportunity that is "too good to walk away from."
14. Our Strategy for the
Property
3 Capital Expenditure Projects
Parking Lot
Façade Improvements
Back courtyard re-haul
Improve Tenant Mix
15. Project 1 – Create More Efficient Parking
As listed – 8 spots on property
Solution : knock down garage and office
16. Project 2 – Update Exterior of
Property
Currently, this building is not
“aesthetically pleasing”
(ugly).
Discolored exterior
Less than ideal signage
and windows
Wasted space on corner
17. Project 2 – Update Exterior of
Property
No fluidity between buildings
Wasted Space above corner unit
20. Improvements to Tenant Mix
Step 1 – Deal with
Current Vacancy
Success of sit down
food venues along
Lancaster Avenue that
provide outside seating
Café and Gelato
restaurant
○ Install seating in
front, on side, and out
back of property
21. Improvements to Tenant Mix
Step 2 – Introduce a new
Main Line Institution
Diner, American Style
Restaurant
Nudy’s Café or
Joe’s Place?
22. What “1050” looks like in 2019
Two extremely popular student
apartments
Two tenants providing extremely safe
and stable cash flows
Two recently-introduced, yet wildly
popular restaurants serving the needs of
the neighborhood
In total, a property that no longer gets
looked over
23. Financial Performance of
“1050”
3 Scenarios
Purchase at $1,465,060.98 – 7.75 Cap
○ Property IRR – 12%
○ Equity IRR – 21%
Purchase at $1,576,975.36 – 7.2 Cap
○ Property IRR – 10%
○ Equity IRR – 16%
26. Additional Information
Rent Growth
Pro Forma (Revenues)
Pro Forma (Expenses + Cash Flow)
Property Revenues and Expenses
Property Returns (I)
Property Returns (II)