STARBOARD LEMON GROVE DST
7014-7050, 7080, 7100-7144 Broadway, Lemon Grove, CA 91945
Loan: $10,560,000
Total Equity: $13,700,000
- Loan-to-Offering Price Ratio: 43.5%
- Cash Flow: 5.28%
- Minimum Investment [1031]: $100,000
- Projected Distributions: 5.71% - 7.69% Annualized
Starboard Lemon Grove DST (“the DST”) intends to acquire 2 multitenant buildings and 1 single tenant ground lease pad to Wells Fargo Bank within Lemon Grove Plaza, Lemon Grove, California (“Lemon Grove”) for $24,210,000 on or about March 8, 2017.
LEMON GROVE PLAZA
Neighborhood centers provide customers with life’s essentials such as food and personal services which are typically difficult to purchase on the internet. Credit worthy tenants and annual rent increases in tenant leases promotes net operating income and property cash flow growth
INVESTMENT HIGHLIGHTS
• Invest in a 95% leased property with annual tenant rent growth.Annual rent increases in 10 of 16 tenant leases and increases every 5 years in 4 leases for total of 14 leases representing 88+% of tenants
• Invest in a Southern California (San Diego County) community with a growing population and jobs.
• Professionally managed by experienced sponsor principals and local third party property managers
• 78% Credit and National Chain tenants including CVS Pharmacy, Petco, Rainbow, Factory 2U, Anna’s Linens, Massage Envy and Wells Fargo
DELAWARE STATUTORY TRUST (“DST”) INVESTMENT STRATEGY
Starboard’s investment strategy for DSTs strives to meet investor objectives and the changing real estate cycle fundamentals of rising interest rates.Historically, a ½ of 1% increase in the 10 Year Treasury Bill will generally cause a 1% increase in capitalization rates*. Since 2008, real estate values have increased largely through cap rate compression. Going forward, we believe value will be created through property performance, revenue growth and in reasing the net operating income (“NOI”).We believe that NOI growth can offset downward pressure on property value caused by rising interest rates and rising capitalization rates.
Starboard’s strategy is to acquire multi-tenant retail shopping centers 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 their own store, we believe they are more committed to the location and will invest more capital in the store than if it was leased. Our acquisition strategy is preferred to single net lease properties because they typically do not have annual rent increases in their leases. Grocery anchored centers have the opportunity to increase rents during the hold period when tenants renew, or by attracting new tenants that can pay higher rents.
WHY STARBOARD?
• Our Investment Strategy – Neighborhood centers provide customers with life’s essentials such as food and personal services which are typically difficult to purchase on the internet. Credit worthy tenants and annual rent increases in tenant leases promotes net operating income and property cash flow growth
• Our Experience – The principals of the company have 20+ years experience acquiring/managing over 30 grocery anchored shopping centers, without capital calls or a loss of equity
• Our Reputation – The principals of the firm have been structuring TIC/DST properties for over 17 years and 2,000+ investors and are industry advocates
• Asset Management Focus – we focus on real estate acquisitions,management and investor services, utilizing an independent managing broker-dealer specializing in DST equity fundraising
PROPERTY OVERVIEW
LEMON GROVE PLAZA
Starboard Lemon Grove DST (“the DST”) intends to acquire 2 multitenant buildings and 1 single tenant ground lease pad to Wells Fargo Bank within Lemon Grove Plaza, Lemon Grove, California (“Lemon Grove”) for $24,210,000 on or about March 8, 2017. Starboard Realty Advisors (“Starboard”), the sponsor/manager, is offering up to $13,640,000 of beneficial interests representing 100% of the equity in the DST. The offering may qualify as a 1031 exchange replacement property. Lemon Grove buildings to be acquired by the DST include a pad ground leased to Wells Fargo Bank, and in-line tenants including CVS Pharmacy, Petco, Factory 2U, and Family Health Centers just to name a few. Other Tenants not part of the DST purchase but located in the shopping center and contributing their share of common area expenses include Albertsons, Carl’s Jr., Starbucks, In-N-Out Burger,McDonalds, KFC and Del Taco(2). Starboard acquires anchored multitenant neighborhood centers for diversification of income and rent growth opportunities. Starboard Lemon Grove MT master leases the property from the DST.
PROPERTY DESCRIPTION
• Anchored shopping center in City of Lemon Grove, San Diego County,California of 86,742 sq. ft.
• 3 Buildings, 3 Parcels on 5.9 acres, Built in 1989
• 95% occupied, 17 tenant spaces and 710 parking spaces
• 143,000 cars per day from SR 94 visibility and being at the most highly trafficked intersection–Broadway (35,000 vpd) and Massachusetts(32,000 vpd)
• Synergistic tenant mix of junior anchors include Petco, Factory 2U and Rainbow. Pad tenants (Not A Part of purchase but contributing to CAM expenses) include KFC ranked 40 out of 3,000+ stores in the nation in sales
• Albertsons is Not A Part of the DST purchase but is contributing to CAM expenses of the shopping center and responsible for the maintenance of its own parcel. CVS have been a tenant for over 20 years
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.