Case Study- Southrail Business Park
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Southrail Business Park (Business Park)
Prevail Real Estate Opportunities is pleased to present Southrail Business Park in partnership with Excelsior Capital. Southrail is an acquisition of a 4 building warehouse complex in Charleston, SC. The investment is organized into a Class A 9% preferred and Class B 7.25% preferred shares with a waterfall structure on exit.
If you have any questions, please reach out to your advisor or contact Regan Smith at rsmith@prevailiws.com
Investor Return Summary*
- Class A – Total of $1,500,000
- $150,000 minimum
- 9% preferred
- 15.4% targeted IRR
- Class B – Total of $1,500,000
- $50,000 minimum
- 7.25%Â preferred
- 13.2%Â targeted IRR
- Â
Investment Snapshot
- Project Cost    $9,111,686
- Investor Equity   $3,000,000
- Other Investor Equity:Â Â Â $1,611,686
- Debt & Incentives – $4,500,000 Loan
- 49% LTV, 5 year, 36 month Interest only
- Pro forma Cash out refi in yr 4 with return of capital and preferred return catch up payment
Investment Highlights
- Charleston is one of the fastest growing cities in the Southeast with 25% population growth and over 60% GDP growth over the last decade.
- Its industrial market growth is similarly strong with rents doubling over the last decade and currently only a 3.3% vacancy rate.
- 48,000 square feet of Class B warehouse complex comprised of 4 buildings on approximately 3 acres in the North Charleston metro area.
- 100% occupied with a diverse mix of tenants with no single tenant representing more than 19% of the square footage.
- The current rent roll is approximately 33% below market with almost 70% of leases up for renewal in the next 2 ½ years.This is without any scheduled CapEx or Tenant Improvement investments.
- As rents are brought to market, in year four, we anticipate returning more than half the invested capital and make a preferred return catch up payment by completing a cash out refinancing.
*These are all preliminary estimates, with no guarantee of performance, and involve risk.