Mezzanine Opportunity –Baltimore Residential Portfolio, Maryland, USA
This deal was completed in October 2020 as part of Arzan Wealth Debt platform utilized Real Estate Index Linked Securities ("REILS") instrument, which was designed as a 6-year amortizing mezzanine loan to a portfolio of 272 single family rental (SFR) in Baltimore, Maryland, USA. In December 2021, the sponsor acquired a second portfolio of 217 stabilized residential units in Baltimore, thus adding more collateral to the loan and reducing the risk profile of the investment.
Based on the level of inflation we expected a net IRR of between 10% and 13% at underwriting, and we are pleased to announce that upon the recent exit of this loan, the actual IRR achieved and delivered to investors was 13.1%, with a net return multiple of 1.3x.
This deal was completed in Jan 2022 as part of Arzan Wealth Debt platform utilized Real Estate Index Linked Securities ("REILS") instrument, which was designed as a 4-year amortizing mezzanine loan to a portfolio of multi-family properties, consisting of 1,339 rental residential units in the states of New York, Nebraska, Missouri and New Hampshire, USA.
Arzan Wealth advised on the exit of this investment, generating a higher return than the maximum contractual IRR and EM in a short holding period of 6 months. The early exit from this investment resulted from the borrower unexpectedly selling their entire portfolio, which allowed our investors to achieve extraordinary returns from a very short investment horizon
The Property was acquired in June-2020 as part of Arzan Wealth's yielding asset platform with an objective of producing an average annual yield of 9.15% to investors, and an IRR of around 10.7% over a five-year holding period. Arzan Wealth advised on the exit of this investment at a price that far exceeded initial expectations.
The sold property houses the headquarters offices of Glaukos as well as their primary R&D facilities. The campus consists of three newly refurbished buildings comprising 159,746sft and fully let to Glaukos Corporation, an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders, and retinal diseases. Glaukos was the first company to introduce Micro-Invasive Glaucoma Surgery (MIGS), the micro-invasive procedure which revolutionized the treatment and management of glaucoma
This portfolio was acquired in December -2018 as part of Arzan Wealth's yielding asset platform with an objective of producing an average annual yield of 8.25% to investors, and an IRR of around 10% over a five-year holding period. Arzan Wealth advised on the exit of this investment, generating a net IRR that was comfortably ahead of the target for investors, inclusive of the 8.% per annum monthly yield payments that were distributed during the holding period of 2.5 years.
The sold portfolio has a total area of 159,303 square feet. The master tenant is a JV entity wholly owned by Emerus Holdings, LLC and INTEGRIS Health, Inc. Emerus is one the largest micro-hospital operator in the U.S., and INTEGRIS is the dominant healthcare provider in Oklahoma with 8 hospitals in the market.
The PPD asset was acquired in March-2017 as part of Arzan Wealth's yielding asset platform with an objective of producing an average annual yield of 8.8% to investors, and an IRR of around 10% over a five-year holding period. Arzan Wealth advised on the exit of this investment, generating a net IRR that was comfortably ahead of the target for investors, inclusive of the 8.80% per annum monthly yield payments that were distributed during the holding period of 4.3 years.
The sold property is a Class A, 233,694 square-foot medical lab leased to Pharmaceutical Product Development ("PPD"); a world-leading Contract Research Organization (CRO) providing chemistry, manufacturing and controls (CMC) laboratory services for all phases of drug development.
The transaction was entered into in December 2018 as part of Arzan Wealth Real Estate Debt Platform which focuses on senior and mezzanine opportunities and is designed to respond to diverse market conditions, and to meet investors needs for a low risk profile and predictable cash flow stream.
This investment was designed as a 3-year senior secured loan to Bluejack National (“Bluejack”), owner of a premier luxury-lifestyle community in Houston, USA. Bluejack includes the first Tiger Woods designed golf course in the United States..
The property is a high-quality office building comprises 20,616 sq.m. of office accommodation over 10 floors with 586 car park spaces and is built according to BREEAM "Excellent" standards and located in Leiden Central Business District, The Netherlands. The property serves as the Global Headquarters of Heerema Marine Contractors, a leading marine contractor for offshore oil & gas fields.
The property is a 180,000 SF build‐to‐suit office building, Oakland County, Michigan. The office building consolidated all activities into a single facility to house Magna Seating's world headquarters. The property houses several business units including all executive and management staff, engineering, sales and marketing, and R&D.
The Portfolio was acquired as part of Arzan Wealth's yielding asset advisory platform with an objective of producing an average annual yield of 8.50% to investors, and an IRR of around 10% over a three-year holding period..
This investment was made in April 2018 to finance a portfolio comprising three multifamily properties consisting of 740 apartments located in New Orleans, Louisiana, USA.
The New Orleans REILS transaction was structured with a net 8% coupon, payable quarterly, and with an escalating quarterly amortization schedule as well as an additional payment at the end of the instrument's term that was designed to generate a total IRR of between 9.4% and 11.8%. .
The asset is a Class A building comprising of 13,635 m² office space and is located in a prime location in the center of the Dutch capital, The Hague. The property was built in 2000 and serves as the headquarters of the Netherlands Organization for Scientific Research (NWO), a unit of the Dutch Government.
The building was acquired in November 2017 as part of Arzan Wealth's yielding asset platform with an objective of producing an average annual yield of 8.00% to investors, and an IRR of around 10% per annum.
The property is an industrial facility located at 8029 Dixie Highway in Florence, Boone County, Kentucky. The facility currently totals 191,215 SF of office and industrial space. Since 1972, the property has served as the headquarters of SWECO, a wholly-owned subsidiary of Schlumberger (NYSE: SLB), the world's largest oilfield services companyThe property was part of The Single Tenant Portfolio consists of 6 single-tenant net-leased buildings with a total of 760,533 sq ft, located in 6 states in the US. The portfolio was acquired in June 2017 with an objective of producing an average annual yield of 8.50% to investors and an IRR of around 10% over a three-year holding period.
Owens Corning is an industrial building located in Aiken, South Carolina. Built in 2014, the 175,000 sf building was constructed to the highest institutional standards. Owens Corning occupies 100% of the space on a lease term set to expire on January 31, 2029. The facility provides Owens Corning with a Class A distribution center with the required supporting office space. The property was part of The Single Tenant Portfolio consists of 6 single-tenant net-leased buildings with a total of 760,533 sq ft, located in 6 states in the US. The portfolio was acquired in June 2017 with an objective of producing an average annual yield of 8.50% to investors and an IRR of around 10% over a three-year holding period.
During the 1.1 year holding period, this investment has delivered an attractive monthly income to clients as promised and a net IRR of 9% after all taxes and fees. Accellent and Integris were successfully sold at a price that has created a net weighted-average IRR of around 13.2% Vs 10% at portfolio level.
During the 1 year holding period, this investment has delivered an attractive monthly income to clients as promised and a successful exit of net IRR of 25.9% after all taxes and fees
The Lenovo property was acquired in February 2015 with an objective of producing an average annual yield of 8.00% to investors over 2.5 year holding period. The property was 100% leased to Lenovo Inc., the operating entity for Lenovo Group Limited. During the 2.5 year holding period, this investment has delivered an attractive monthly income to clients equal to 8.0% per annum.. However, due to a combination of upward movement in swap rates for the buyers and the fact that since acquiring the building Lenovo as a company has had problems with their PC division, which led to a 65% drop in their stock price.
The VW Property was acquired in December 2014 with an objective of producing an average annual yield of 8.25% to investors, and an IRR of around 10% over a three-year holding period. The Property was leased entirely to Rudolph Automotive Logistik GmbH ("Rudolph"), a large international logistics company which is contracted by VW to store and distribute spare parts for all of VW's brands.
During the 2.75 year holding period, this investment has delivered an attractive monthly income to clients equal to the promised 8.25% per annum, and with this successful exit the actual IRR is around 11% after all taxes and fees. The high quality of the asset, location and tenant created significant interest for the property, which helped Arzan Wealth's investors achieve a Total Return on Equity of 30.2%, from this investment
The Property was acquired in November 2014 as part of Arzan Wealth’s residential refurbishment and development platform (“Platform”) that targets assets in major global cities such as New York and London. Since acquisition, the Property has undergone extensive internal refurbishment, while maintaining its distinctive façade, and has transformed what were old rental apartments into modern and luxurious condominiums for sale.
The success of the project culminated in the sale of all 5 residential units at prices that exceeded expectations, with sales proceeds exceeding $52m. The project therefore generated an IRR of 23.5% for investors, which was above the projected return of 20% at the time of acquisition.
The asset was acquired in November 2012 with an objective of producing an average annual yield of 7.75% to investors, and an IRR of around 11% over a three-year holding period. The property was purpose-built for Siemens PLC Gas Turbine Division and has some of the highest environment (BREEAM) ratings for a property of this type.
During the 4.5 year holding period of this investment, we were able to advise on several opportunities to create value, which has allowed us to exceed our promised returns to clients on every measure. The investment has delivered an average annual yield of 8.1% and an IRR of around 12%, which are both higher than original projections. Total Return on Equity (ROE) was 58%, significantly higher than initial projections of 33%.
The asset was sold to Siemens, who have decided to invest further capital into Teal Park and to make the site a major global location for their gas turbine business. Unconditional contracts have been exchanged, and the sale is expected to complete in early July.
The property was acquired in November 2014 and has provided investors with an attractive average yield of 9.4% per annum that was paid on a monthly basis. While the initial projections at the time of acquisition were for a target IRR of 11.4%, combining the monthly income and moderate capital gains, the sale has resulted in an actual IRR of just over 15% after all taxes and fees. The high quality of the asset, location and tenant created significant interest for the asset, thus achieving a very attractive exit price for investors, leading to a total Return on Equity of 39%, which was well above the 33% initially projected.
The asset was sold to a local Norwegian fund, after a very competitive sale process that attracted significant interest from institutional investors. Arzan Wealth acted as Strategic Advisor on the sale, alongside 90 North Real Estate Partners as Property Advisor
In June 2014, Arzan Wealth advised on the sale of the above UK warehouse leased to L’Oreal (UK) Ltd (“L’Oreal”), the global cosmetics company (the “Property”) to a major UK investment fund. The Property was constructed for L’Oreal in 2006 within the Sherwood Park development near Nottingham, and provides 112,806sqft warehouse space, 13,254sqft offices and 78 parking spaces and extensive service yard area on 6.1acre site. In December 2012, Arzan Wealth and 90 North Real Estate Partners (“90 North”), as joint advisors, worked with a consortium of investors on the acquisition of the Property for the purpose of generating a monthly income equal to 8.0% per annum, and at that time it was projected that upon exit the IRR would be 12.4%, combining the monthly income and capital gains.
However, based on market conditions Arzan Wealth and 90 North recommended the sale of the asset. The exit process generated significant interest of potential buyers of the Property and has generated an IRR for investors of 16.6%, net of all taxes, fees and expenses.
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