Carriage Park

330 Garfield Street, Santa Fe, New Mexico 87501

Gross Sales Proceeds: $16,340,253

EQUITY: $154,896

  • Net Sales Proceeds: $8,571,318
  • MINIMUM UNIT PRICE: $387,396 (3% INTEREST)
  • MORTGAGE: $232,500
  • AVAILABLE FOR 1031 EXCHANGE

The Property is a Class B, mixed-use facility with 124,950 square feet of rentable space in four separate buildings on four parcels of land comprising 10.82 acres.

330 Garfield Street, Santa Fe, New Mexico

The Property is a destination-oriented service center with specialized retail, wholesale, and service tenants. It is situated in an affluent, eastside neighborhood with close proximity to downtown Wichita.

Property Description

The Property is a Class B, mixed-use facility with 124,950 square feet of rentable space in four separate buildings on four parcels of land comprising 10.82 acres. It is located in a 28-acre Community Unit Plan (CUP) known as Carriage Park, which includes seven other free-standing buildings unrelated to the Property. The Property is a destination-oriented service center with specialized retail, wholesale, and service tenants. It is situated in an affluent, eastside neighborhood with close proximity to downtown Wichita. The Property has frontage on East Central Avenue, a heavily-traveled east-west thoroughfare. It has ample parking, and is conveniently located with regard to local industrial parks, office facilities, and residential communities. The Property is in close proximity to a McDonald’s, a Taco Bell and a Blockbuster Video on adjoining parcels. As of December 1, 2007, the Property was 82.05% leased to 23 tenants. In addition, a portion of the site is leased for the operation of an antenna. Six major tenants (each with more than 6,000 square feet of space) include a large furniture showroom, specialized medical and dental practices, a commercial business services firm, a beauty supply store, and a restaurant. The Property offers abundant parking, with approximately 594 surface level spaces, including 14 handicapped spaces.

Wichita Highlights

Wichita, with a population of 354,865, is the largest city in Kansas. As a regional center of business, healthcare and entertainment, it serves approximately one million people within a 100 mile radius. The City of Wichita’s Planning Department projects that the population will grow to 412,460 by 2030. Durable manufacturing and retail trade sectors comprise a large proportion of the metropolitan employment base, although the largest employment sector is services. The area is known for its concentration of aircraft manufacturing, and the region currently produces approximately 70% of the general aviation aircraft in the country. The three largest employers in the MSA are Boeing, Cessna and Raytheon (Beechcraft). This manufacturing base helped to create an environment in which a number of well-known national companies were started, including the Coleman Company, Pizza Hut, White Castle, and Koch Industries (currently the second largest privately held company in the world). 

Property Name/Address:

Carriage Park, 555, 625, & 650 N. Carriage Parkway & 5730 E. Central Avenue, Wichita, Kansas 67208

Market Location:

Located in an affluent, East side neighborhood of metropolitan Wichita, near Interstates 135 and 35,
State Road 96 and U.S. 54.

PROJECT SUMMARY

  • A mixed-use retail/office complex with four, multi-tenant buildings totaling 124,950 rentable square feet on 10.82 acres
  • Property is occupied by 23 tenants comprised of medical, dental, insurance, and financial practices, a number of restaurants and various retail businesses, with gross rents exceeding $883,553
  • Located in an affluent neighborhood with close proximity to downtown Wichita and frontage on a heavily-traveled thoroughfare
  • Offeror and affiliates to acquire any unsold interests for greater assurance of a timely closing
  • Priced at a discount to replacement cost

Market Overview

The Wichita MSA has 105 multi-tenant retail/office properties with a combined area of more than 6 million square feet. Wichita’s economy is experiencing net employment growth, which has improved the office market. Since 2003, there was positive annual absorption of office and retail space. Market-wide vacancy has averaged 16.2% over the past year. Rental and vacancy rates for Class B, mixed-use space in the Property’s northeastern submarket were slightly above those reported for the overall Wichita area. Rental rates had a range of $9.35 – $12.43 per square foot, while vacancy rates were between 10.4% – 15.5%. Growth in the Property submarket has primarily been related to retail development, which appears to be well supported by demographics and the primary traffic carriers within the neighborhood. Overall, lease rates are showing modest increases across the market, and growth is projected in the smaller retail centers. The market in retail space in the Wichita area is forecasted to grow by 1.3% over the next five years.

Offeror, Property Manager & BGK Group

Under a Confidential Private Placement Memorandum and Addendum dated December 11, 2007 (the “Memorandum”), BIG Carriage Park, LLC and BIG Carriage Park Investors, LLC are offering investors tenancy-in-common interests in the property, and limited liability company units in an entity that will own a tenant-in-common interest in the property. The offerors and the property management company are owned by BGKIntegrated Group LLC. Since November 2006, BIG’s wholly-owned subsidiaries have conducted 10 offerings of tenancy in common and/or limited liability company interests involving over 1,348,791 square feet of office and light industrial properties in Alabama, New Mexico, Texas, Louisiana, Ohio, Kansas, Florida and West Virginia for an aggregate price (including investor equity and assumed debt) in excess of $203,902,975. BGK owns, operates, and manages commercial real estate. Formed in 1991, BGK has acquired more than 300 properties nationwide, sponsored real estate projects involving over $800,000,000 of equity from more than 2,500 investors, and obtained over $2,500,000,000 in mortgage loans. BGK currently manages almost 18,000,000 square feet of space.

The Property is presently owned by a real estate limited partnership managed by affiliates of BGK. The TIC offeror will acquire at least a 2% interest in the property, and the current owner or its affiliates will retain unsold interests. On or before the closing, the property owner is expected to obtain an assumable $7,750,000 mortgage loan at a 6.55% interest rate. Financial projections for the property are based on historic income and expense statements, and familiarity with property leases and tenants and the local market. The Property will continue to be operated by an experienced management team to provide a smooth transition in management with no “down time,” or disruption of leasing/tenant relations. The TIC offeror has also arranged a $200,000 credit facility for certain future leasing costs, if needed.

Investment Objectives/Strategy

Our objective is to improve the Property’s occupancy and cash flow levels, while seeking appreciation as the local economy expands. That expansion is projected to tighten the office and retail markets, with higher rents and lower leasing costs. Priced below replacement cost, and given its mixed-use nature and location adjacent to a major thoroughfare and surrounding businesses, the Property appears well positioned for growth. Management will seek to renew key tenant leases at market rents to improve future cash flow, while seeking new tenants as space becomes available. A property sale is projected in 7 – 10 years. The following table reflects a projected sale in the 7th year. All financial information therein is based on the assumptions set out in the Memorandum and includes forward looking statements. There is no guaranty or certainty that the projected results will be achieved.

 

ABOUT BGK-INTEGRATED GROUP

Direct All Inquiries to:
K-One Investment Company, Inc. – Managing Broker-Dealer
1-866-668-2997
1900 North Loop West – Suite 101, Houston, TX 77018