Crosslakes Industrial Portfolio DST

Grand Rapids, Michigan (MSA)

Beneficial Interests: $19.15 million

Offering Price: $39.10 million

  • Loan Proceeds: $19.95 million
  • Loan-to-Offering Price Ratio: 51.00%
  • Minimum Investment[1031]: $100,000

Crosslakes is developed by Robert Grooters, one of the largest developers of industrial buildings over past 30 years in Western Michigan:
• Built between 1998 and 2004
• Good condition with minimal deferred maintenance

Five Crosslakes Industrial Assets

The Grand Rapids metropolitan statistical area (MSA) now competes with the largest MSAs in the nation.
Forbes ranked Grand Rapids the number two city in the nation for finding a job last year. 

INVESTMENT HIGHLIGHTS

• An investment in five industrial assets totaling 1,132,363 square feet in Grand Rapids, Michigan (MSA).
• Serves a Midwest industrial market that encompasses Western Michigan, Northern Indiana and Chicago.
• Currently 93.4% leased with an average lease term of over four years, with in-place rents that the trust managers believe are below market, providing upside potential for lease renewals and new leases.
• The trust managers believe there is a limited supply of competing facilities in what they consider to be a dynamic, growing region.
• Managed by CORE Realty Holdings Management, Inc. (CRHMI), the second largest manager of industrial properties in the Grand Rapids area.

The Industrial Opportunity

In the current interest rate environment, many investors are seeking yield-generating investments in real estate. While multifamily and retail properties remain popular based in part on people’s familiarity with these property types, multi-tenant industrial has the potential to provide stable income and strong returns.

• In the face of high valuations throughout the real estate industry, multi-tenant industrial has not yet inflated in value, making it a strong investment to consider, as these assets are poised for future growth.

• Companies that lease space in multi-tenant industrial properties are typically small, entrepreneurial firms that sign short-term leases.

• The short-term nature of the leases enables the owner to change rents more frequently in correlation with market shifts, much like that of an apartment building. This allows for rapid growth of net operating income, and the ability to constantly reposition the asset to ensure it is optimally marketed for lease.

• Multiple tenants allow for a diverse credit mix, creating stabilized cash flow for investors.

• There is growing demand for this property type, fueled by the resurgence of business start-ups, as well as growth within the service sector. Prior to the Great Recession, many large service companies housed corporate, operations and manufacturing divisions under one roof. Today, many of these companies contract to third-party service providers to keep costs low.

THE OFFERING

The Offering is designed for accredited investors seeking to participate in a tax-deferred exchange as well as those seeking a quality, multiple owner real estate investment. Only accredited investors may purchase interests in this Offering. See “Summary of the Offering” and “The Offering.”

THE FINANCING

• 30 year amortization

• 10 year term

• Interest rate of 5.2235%

• Interest only period of 4 years

PROPERTY OVERVIEW

Developed by Robert Grooters, one of the largest developers of industrial buildings over past 30 years in Western Michigan:

• Built between 1998 and 2004

• Good condition with minimal deferred maintenance

• All leases are NNN and range from $1.87 to $4.25 PSF with an average of $2.92 PSF

• Diverse tenant mix limits exposure to a single industry

• Multi-tenant investment limits exposure to a single tenant (average tenant size is 5.6% of portfolio SF)

ABOUT The Core Pacific Advisors

The Core Pacific Advisors is an investment advisory firm with expertise in commercial real estate and real estate-related investments. An affiliate of CORE Realty Holdings Management, Inc. (CRHMI), Core Pacific Advisors is focused on creating and implementing client-focused commercial real estate strategies that provide superior income, capital preservation and growth potential, all delivered with the highest level of integrity, communication and service.

With decades of experience in buying, managing and successfully selling commercial real estate in a variety of market conditions, the CPA team concentrates on identifying institutional quality investments with the potential to outperform the market while at the same time managing risk.

Of course, real estate is a business built on relationships, including those with sellers, brokers, service providers, buyers and most importantly investors. Over the years, CPA has developed strong relationships throughout the commercial real estate community and earned the trust of thousands of investors nationwide.

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