CSRA Grocery Portfolio II, DST

Location: KIMBERLY PARK | 47,900 square feet | 1005 Monroe Street, Carthage, North Carolina 27288

INVESTMENT COST: $11,009,000

EQUITY RAISE: $4,509,000

  • CASH-ON-CASH RETURN: 6% Starting
  • OFFERING LOAN-TO-VALUE: 59.04%
  • LOAN: 10-Year Term
  • FIXED INTEREST RATE: 4.75%
  • CASH INVESTORS: 9.37%

Each property is anchored by Food Lion, a subsidiary of Delhaize Group (NYSE:DEG), an international company with an investment grade S&P rating of BBB-/A-3. Food Lion operates more than 1,100 supermarkets in 10 Southeastern and Mid-Atlantic States.

Monroe Street, Carthage, North Carolina

Approximately 1,100 Food Lion stores can currently be found in Delaware, Florida, Georgia, Kentucky, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

INVESTMENT HIGHLIGHTS

  • Grocery-Anchored Shopping Centers: Food strategy – Food Lion is a necessity retailer with strong store sales.
  • Strong Anchor Tenant: Food Lion is owned by Delhaize America, the U.S. division of Delhaize Group (NYSE: DEG), which has an investment grade S&P rating of BBB-/A-3.
  • Long-Term Anchor Leases: Food Lion, the anchor tenant, recently signed new 10-year leases.
  • Triple Net Leases: Tenants are responsible for the payment of taxes, insurance, maintenance and repairs, protecting investor distributions from future inflation.
  • Strong Locations: The properties are in growing markets with strong Food Lion brand recognition.
  • High Occupancy Level: Portfolio approximately 95 percent leased upon acquisition. Renovated Shopping Centers. Seller to complete substantial renovations, all at seller’s cost.

ACQUISITION SUMMARY

SYNDICATION PRICE: $11,009,000

EQUITY: $4,509,000

DEBT: $6,500,000

MARKET OVERVIEW

Kimberly Park is located in Moore County, North Carolina, within the Pinehurst-Southern Pines, North Carolina Micropolitan Area. The economy in Pinehurst-Southern Pines is largely driven by the leisure and hospitality industry. The area is known as “The Home of American Golf” and includes 44 golf courses. The area is also a major hub of equestrian activity, with a large cluster of expansive horse farms. Moreover, the leisure and hospitality industry fuels the retail trade industry, as many tourists spend money on retail items while visiting each year. Through May 2015, retail sales in Pinehurst- Southern Pines totaled $432.4 million, a 4.5% increase from retail sales recorded in the first five months of 2014.

Eden Centre is located within the Greensboro-High Point-Winston-Salem combined statistical area, commonly referred to as the Piedmont Triad. The CSA has an estimated population of nearly 1.8 million people. The economy has three primary employment groups: trade, transportation and utilities; education and health services; and professional and business services.

There are 12 public school districts within the Piedmont Triad region, which also includes the University of North Carolina, Greensboro campus and Wake Forest University.

Food Lion, LLC is owned by Delhaize America, the U.S. division of Delhaize Group (NYSE: DEG). Food Lion is the largest subsidiary of Delhaize Group.

Delhaize Group, founded in 1867, is a large food retailer headquartered in Brussels, Belgium. The principal activity of Delhaize Group is the operation of food supermarkets in 11 countries in North America, Europe and Southeast Asia. Delhaize Group’s U.S. revenues rose 6.6 percent during 2014, equal to approximately $1.1 billion.

Based in Salisbury, North Carolina, and founded in 1957, Food Lion operates more than 1,100 grocery stores in 10 Southeastern and Mid-Atlantic states. The company employs more than 63,000 associates and serves approximately 10 million customers a week.

ABOUT CAPITAL SQUARE

Capital Square 1031, LLC specializes in the creation and management of real estate investment programs for Section 1031 exchange investors and other investors using the Delaware Statutory Trust structure. Louis J. Rogers, founder and chief executive offi cer of Capital Square, has been involved in the creation and management of more than 100 investment offerings totaling over $3 billion, including DSTs, tenant-in-common offerings, numerous real estate funds, and multiple publicly registered non-traded real estate investment trusts.