STARBOARD DIAGONAL DST

980-1100 Ken Pratt Blvd, Longmont, CO

Loan: $6,500,000

Total Equity: $5,350,000

  • Loan-to-Offering Price Ratio: 54.85%
  • Cash Flow: 4.65%
  • Minimum Investment [1031]: $100,000
  • Projected Distributions: 6.0%-7.9% annualized

Starboard Diagonal DST acquired Diagonal Marketplace Shopping Center in Longmont, Colorado (“Diagonal”) for $11,850,000 on April 10, 2015. Starboard Realty Advisors (“Starboard”), the sponsor/manager is offering up to $5,350,000 of equity interests. This offering is designed to qualify as a 1031 exchange replacement property.

DIAGONAL MARKETPLACE

Starboard offers multi-tenant neighborhood centers with a diversification of regional and national tenants. Neighborhood centers provide customers with life’s essentials such as food and personal services which are typically difficult to purchase on the internet. 

INVESTMENT HIGHLIGHTS

• Invest in a property with projected annual tenant rent growth
• Invest in a community with a growing population and jobs
• Professionally managed by experienced sponsor principals
• Diagonal Marketplace benefits from its location in the center of the Longmont Retail Corridor
• Annual rent increases in 8 of 11 tenant leases representing 73% of tenants
• 66% Credit and National Chain tenants including Fed Ex/Kinkos, Starbucks, GNC, Chipotle Restaurant, Safeway (for CAM)

DELAWARE STATUTORY TRUST (“DST”) INVESTMENT STRATEGY

Starboard has a unique investment strategy for DST’s to respond to investor objectives and the changing real estate cycle fundamentals that will impact investor returns in the future.

Historically, a ½ of 1% increase in the 10 Year Treasury Bill will generally cause a 1% increase in cap rates. Since 2008, real estate values have increased largely through cap rate compression, while many asset classes were not performing well. 

Going forward, value will be created through property performance, revenue growth and increasing the net operating income (“NOI”). It is likely that NOI growth will be needed to offset the rising cap rates resulting from higher interest rates.

Starboard’s DST strategy is to acquire multi-tenant retail shopping centers in primary and secondary markets which historically have three to ten year lease terms and annual rent increases in the tenant leases. The DST will not own the anchor because it usually represents 40-60% of the centers’ income. 

When an anchor owns its own store, it is more committed to the location and will invest more capital in the store than if it was leased. This acquisition strategy is preferred by Starboard to single or portfolio net lease properties because as market rents increase during the current real estate cycle, tenants can be renewed or replaced at the higher rents.

INVESTMENT STRATEGY

Multi-Tenant Retail Neighborhood centers

Starboard offers multi-tenant neighborhood centers with a diversification of regional and national tenants. Neighborhood centers provide customers with life’s essentials such as food and personal services which are typically difficult to purchase on the internet. 

Typical neighborhood center tenants have annual rent increases which facilitates the growth of net operating income and property cash flows. When interest rates increase and inflation returns, commercial real estate with rent growth has proven to be a good hedge to rising interest and capitalization rates and its negative impact on real estate values.

PROPERTY OVERVIEW

DIAGONAL MARKETPLACE

Starboard Diagonal DST acquired Diagonal Marketplace Shopping Center in Longmont, Colorado (“Diagonal”) for $11,850,000 on April 10, 2015. Starboard Realty Advisors (“Starboard”), the sponsor/manager is offering up to $5,350,000 of equity interests. This offering is designed to qualify as a 1031 exchange replacement property. Tenants include FedEx Office, Starbucks, Chipotle, Three Rivers Liquor & Wine, GNC and others. Starboard acquires anchored multi-tenant neighborhood centers for diversification of income and rent growth opportunities. Starboard Diagonal MT master leases the property from Starboard Diagonal DST.

PROPERTY DESCRIPTION

• Shopping center* in Longmont, CO

• 36,080 Square Feet

• 3 Buildings

• 3 Parcels on 3.08 Acres

• 14 tenant spaces

• 88.67% occupied

• Built in 1996

• Triple Net Leases

• Shadow-anchored by Safeway Grocery Store Fuel Center*

• Safeway primarily responsible for common area maintenance expenses.*

* Safeway grocery store is not a part of this purchase

ABOUT Starboard Realty Advisors, LLC

The Sponsor is Starboard Realty Advisors, LLC, headquartered in Irvine, California, a privately held, fully integrated real estate firm, whose principals have more than 30 years of hands-on, cycle-tested experience in acquiring, developing, leasing, repositioning, managing, financing and disposing of retail, multi-family, office and industrial real estate. The principals of Starboard are William H. Winn and Stephen Carlton. Starboard acquires multi-family, multi-tenant retail shopping centers, and NNN lease properties.

Starboard’s mission is to acquire well located properties primarily in the western U.S., in which current rents have growth potential and which can be acquired at below replacement cost. Starboard acquires primarily stabilized properties with a 7 to 10 year hold period for its 1031 exchange clients and value added properties with a 1 to 5 year hold.