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CASE STUDIES

INVESTMENT

Value-Add Acquisition

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  • 44,000 square foot Office / Medical Building complex

  • Purchase Price = $10,300,000 ($230 psf)

  • Purchased property at a significant discount to replacement cost with average rents 30% below market

  • Implemented multiple value strategies:

    • Increased rents to market and targeted medical tenancy, which pay upwards of 10% to 15% premium rents

    • Parcellation of the five individual buildings for a potential break up sale at premium pricing to private owner-users

    • In discussion with the City to allow 100% Medical use in the project

National Hotel Portfolio

  • 1,215 hotel keys with a total acquisition cost of $130,000,000

  • Individually acquired / invested / asset managed thirteen hotels

  • Located across the United States with various local operators

  • Diversified risk profile across the portfolio – Stabilized, New Development, and Value-Add / Renovation

  • Mix demand profile across the portfolio – Corporate, Leisure, Transient, Group, Etc.

  • The diversified profile of the portfolio has provided stable positive cash flow during shifting market conditions

  • Exit plan is to sell off and/or re-capitalize individual hotels and monetize profits as the post-pandemic market continues to strengthen

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Entitlement / Break-up Sale 

  • Mixed-Use Campus consisting of 196,000 SF ten-story office building, a 35,000 SF Fitness Club, and a 1.2-acre parcel of land

  • Purchase Price = $45,500,000 ($196 psf)

  • Sold Fitness Club to exchange buyer one month after closing for $9,500,000 ($271 psf)

  • Re-entitled the vacant office development parcel to accommodate medical use

  • Increased office occupancy from 90% to 98% within 10 months

  • Sold office and entitled parcel to an institutional investor for $60,000,000 ($305 psf)

  • Total Profit of $24,000,000 representing a 38% unleveraged IRR in 21 months

Value Add Break-up Sale

  • 122,000 SF Office Building + 3.72-acre parcel of land

  • Purchase Price = $22,000,000 ($180 psf)

  • 24 months after acquisition land parcel was sold to residential developer for $12,000,000

  • Net basis in office building after sale = $10,000,000 ($80 psf)

  • 14 months after office building was sold for $32,000,000 ($262 psf)

  • Total Profit of $22,000,000 representing a 41% unleveraged IRR in 38 months

Ground-Up Development

  • Speculative Ground-Up Office Development

  • 235,000 SF Office Building + 4 Story Parking Structure (682 Stalls)

  • Total Construction Cost = $58,500,0000 ($250 psf)

  • Presale of property upon completion to one of the largest office owners in the US

  • Sale Price = $80,000,000 ($340 psf)

  • Total Profit of $21,500,000 representing a 40% unleveraged IRR in 18 months

* Some case studies noted above are for the principals of Stratton prior to company formation

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