Fox Valley Centre for Health
St. Charles, Illinois
45,381 RSF, 3.8 acres
Acquired August 2015
Fox Valley Centre for Health was constructed in 2009 as medical office condominiums. The Class A property leveraged its location, less than two miles from Delnor Northwestern Hospital, to attract prime tenants. Advocate's revenues exceed $5 billion annually.
In August 2015, Triton Capital bought out the majority of the condominium interests with the goal of converting the property to a fee-simple asset for lease. Triton is in the process of acquiring the two remaining condominium units. In this case, the whole was greater than the sum of the parts. Triton acquired the interests at 9.5 percent to 10 percent capitalization rates. If it were sold today, the property would command a 6.5 percent to 7 percent cap rate. Investors are projected to earn an estimated IRR of more than 35 percent on their capital.
Executive Airport Business Center
Fort Lauderdale, Florida
73,216 SF, 6.09 acres
Acquired June 2014
This single-story flex building occupies a scenic site next to Fort Lauderdale Executive Airport, among the busiest general aviation airports in the nation. With easy access to Interstate 95 and the Florida Turnpike, the center is an attractive place for business. When it was acquired in 2014, it was 92 percent leased to 14 tenants. Many of them had been in place for more than 20 years.
Triton made the acquisition in joint venture with CP Highlands Fund LP, another Chicago-based investment firm. The center was never publicly marketed. Instead, the joint venture bought it from a special servicer for significantly less than its market value or replacement cost. Currently, its rental rates are more than $6 a square foot below their 2008 peak. As the South Florida market continues to improve, rising rents will provide a significant upside for the investors.
Bellsouth Telecommunications Building
Fort Lauderdale, Florida
79,412 SF
Acquired January 2014
For more than 15 years, AT&T has housed a training and cable-installation dispatch center at this Fort Lauderdale property. The building is part of the Fort Lauderdale Commerce Center, just west of the city’s executive airport.
Bellsouth Telecommunications, an AT&T subsidiary, had a 100% net lease on the property. During due diligence, Triton locked the tenant in place by lowering the rent and extending the two and one half year lease term to eight and a half years. Over the next 12 months, the property generated a 24 percent cash-on-cash return. Within a year, Triton sold the building to a local investor. The profit exceeded $1.4 million, with an equity multiple of 2.6 times and a cap-rate spread of more than 300 basis points.
St. Charles, Illinois
45,381 RSF, 3.8 acres
Acquired August 2015
Fox Valley Centre for Health was constructed in 2009 as medical office condominiums. The Class A property leveraged its location, less than two miles from Delnor Northwestern Hospital, to attract prime tenants. Advocate's revenues exceed $5 billion annually.
In August 2015, Triton Capital bought out the majority of the condominium interests with the goal of converting the property to a fee-simple asset for lease. Triton is in the process of acquiring the two remaining condominium units. In this case, the whole was greater than the sum of the parts. Triton acquired the interests at 9.5 percent to 10 percent capitalization rates. If it were sold today, the property would command a 6.5 percent to 7 percent cap rate. Investors are projected to earn an estimated IRR of more than 35 percent on their capital.
Executive Airport Business Center
Fort Lauderdale, Florida
73,216 SF, 6.09 acres
Acquired June 2014
This single-story flex building occupies a scenic site next to Fort Lauderdale Executive Airport, among the busiest general aviation airports in the nation. With easy access to Interstate 95 and the Florida Turnpike, the center is an attractive place for business. When it was acquired in 2014, it was 92 percent leased to 14 tenants. Many of them had been in place for more than 20 years.
Triton made the acquisition in joint venture with CP Highlands Fund LP, another Chicago-based investment firm. The center was never publicly marketed. Instead, the joint venture bought it from a special servicer for significantly less than its market value or replacement cost. Currently, its rental rates are more than $6 a square foot below their 2008 peak. As the South Florida market continues to improve, rising rents will provide a significant upside for the investors.
Bellsouth Telecommunications Building
Fort Lauderdale, Florida
79,412 SF
Acquired January 2014
For more than 15 years, AT&T has housed a training and cable-installation dispatch center at this Fort Lauderdale property. The building is part of the Fort Lauderdale Commerce Center, just west of the city’s executive airport.
Bellsouth Telecommunications, an AT&T subsidiary, had a 100% net lease on the property. During due diligence, Triton locked the tenant in place by lowering the rent and extending the two and one half year lease term to eight and a half years. Over the next 12 months, the property generated a 24 percent cash-on-cash return. Within a year, Triton sold the building to a local investor. The profit exceeded $1.4 million, with an equity multiple of 2.6 times and a cap-rate spread of more than 300 basis points.