This property is an older style concrete building constructed in 1975, located in the established industrial heart of Ft Myers, Florida. The property is warehouse flexible space, zoned heavy industrial, and is divided up into five separate tenant spaces. Aside from the building there are four additional outside storage areas that are rented for additional income.
The building is being purchased at $24.80 per square foot, approximately a third of replacement value, and will deliver immediate positive cash flow returns.
Financial Information:
Disclaimer: Information provided about forecast annual net cash flow and cash on cash returns are derived from unaudited financial projections. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Responsible Entity. The Responsible Entity cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.
| Acquisition date | 21 March 2013 |
| Contract purchase price | $620,000 |
| Original listed price | $1,500,000 |
| Discount to listing price | $880,000 (58%) |
| Independently appraised price | $625,000 |
| Appraisal date and appraiser | 14 February 2013 Carlson, Norris & Associates |
| Finance terms | Cash |
| Building size | 25,000 sq ft (2,322 sq mtrs) |
| Land size | 80,000 sq ft (7,432 sq mtrs) |
| Stabilized estimated net operating income | $69,912 |
| Stabilized estimated capitalization rate | 11.28% |
| Stabilized estimated cash on cash return | 15.46% |
Further Notes:
Currency: All numbers are shown in USD. Returns shown have not been translated into Australian dollars as the exchange rate varies. A AUD:USD exchange rate below AUD1:USD1 will increase the percentage return. A AUD:USD exchange rate in excess of AUD1:USD1 will decrease the return.
Management costs: Returns shown above include US management costs, but exclude the management fee charged by the Responsible Entity (1.98% per annum of Gross Assets).
Returns: Returns prior to the property being stabilized are expected to be lower than those forecast above as once off due diligence costs are absorbed, and as less income is received from vacancies as at purchase date. Unless otherwise noted, properties are expected to be stabilized within 12 months of acquisition.
More information on key terms:
| Net operating income: | Operating income – operating expenses |
| Capitalization rate: | (Net operating income ÷ Purchase price) × 100 |
| Cash on Cash return: | (Annual cash back ÷ Cash down) × 100 |
| Stabilized estimated capitalization rate: | Using unaudited management forecasts, the estimated capitalization rate in the second year assuming the rental and property expenses have been stabilized. |
| Stabilized estimated cash on cash return: | Using unaudited management forecasts, the estimated cash on cash return in the second year assuming the rental and property expenses have been stabilized, and assuming either actual finance terms (where applicable), or else assuming an interest only loan of 40% of purchase price at 5% interest-only. |
