The small event and conference industry as it exists today is a “Mom and Pop” industry without product consistency. Noah Corporation believes they can consolidate this industry much like other industries, such as Home Depot with the hardware industry, have consolidated their respective markets. Noah’s has found the small meeting and event business to be recession resistant because the services they offer are one-time life events or necessary business events where their clients simply find the necessary resources to fulfill their needs.
Noah Corporation has demonstrated their ability to examine and modify their business to achieve maximum profitability. They have demonstrated their ability to build, market and pre-book events. Noah’s business is largely absent of accounts receivable. Reservations are generally paid in advance with less than 6% of their current sales as a receivable. Their business is also absent traditional inventory. Noah’s anticipates revenues to well exceed the debt service and operating cost with their breakeven well below their currently operating occupancy levels.
Noah’s has committed to lease the property for an initial term of 20 years. During the initial term of the lease, the base rent shall increase by 2% each year. The lease also includes two options to extend the lease for a period of 10 years each.
One of the many appealing aspects of this lease is that Noah’s pays directly all of the taxes, insurance premiums and all of the maintenance costs of the building. Therefore, the property co-owners have no active management duties, rendering this triple-net lease property a passive, hassle-free, real estate investment.