Net Lease Portfolio 11
AEI
Investment Highlights
Overview
This offering is for four all cash retail properties in Georgia, Indiana, and Washington. The Tenants will be DaVita, Tractor Supply, and BioLife.
- Year 1 Cash Flow 5.04%
- Initial Occupancy 100.00%
- Est. Time Horizon None
- Yr 1. Cap Rate to Investors 5.05%
- Investor Purchase Price $20,625,000
- Total Offering Size $20,625,000
Loan Information
All-cash; loan N/A
- Yr. 1 DSCR None
- Loan-to-Value 0.00%
- Hold Period DSCR None
Key Benefits
The all-cash offering eliminates foreclosure risk.
The lease term has a lengthy weighted average that extends beyond the 10-year hold period.
Favorable lease terms: (NNN), contracted rent increases, and lease extension options.
The population in the 5-mile radius is in six-figure (and growing).
Both DaVita locations are in Georgia, which is a Certificate of Needs State.
Key Risks
Neither DaVita or Tractor Supply CO. are rated investment grade, but they’re both strong companies that seem capable of covering the lease obligations.
The property values may diminish as the remaining lease terms decrease.
The offering lacks a master tenant, limiting the investor’s options should a tenant default.
Low CAP rate: 5.05%.
The tenants can legally make a "first refusal", which can hold up a potential sale.
About AEI
According to the sponsor's website: "Founded in 1970, AEI brings more than 40 years of professional expertise to the management of its net lease property investment funds. AEI Funds are created for investors seeking the opportunity for stable income, low volatility, reduced risk, and capital appreciation.
For investors who wish to own entire properties, AEI offers a large portfolio of attractive net leased, income-producing, real estate from which to choose. Net leased properties are especially suitable for tax advantaged 1031 exchanges. AEI began offering tenant-in-common (TIC) interests for IRS 1031 tax-deferred exchanges in 1992 and was the first investment firm in America to obtain a favorable IRS private letter ruling with respect to its TIC offerings."