Latest update on our 4th project of the year! We bought a Piggly Wiggly grocery store in Macon, GA, in an opportunity zone, and are converting it to Climate Controlled self storage, here are the numbers.

The building had sat empty on a great intersection for years, and we picked it up after a significant off-market price drop for $800k. In-house, and third party feasibility study showed a very under-served market with high rental rates, blended price per square in Macon is $23.34, and to be conservative, we capped our rental rates at $20.98. The building is 62,000 sf, with potential for 46,500 Net Rentable sf as climate controlled storage. Total cost of the building, rehab, conversion, etc was $3.86 million. We raised $1.1 million from our investors, and financed $2.7 million at 5.25% (obviously that was locked in several months ago, we closed this deal last month), 20 year note, 70% LTV. With those below market rental rates, the Gross Potential Income in year 1 of operation is $975,719, and we implement rental increases once we hit 60% occupancy. Our investors got a preferred return of 6 or 8% depending on size of their investment, then we start paying out cash flows once the property hits 40% occupancy. Most of our projects are 5 year hold max, this one is a 10 year hold because it is in a Qualified Opportunity Zone, and any money invested as a Capital Gain has potential to come out tax free after a 10 year hold. Obviously it's sometimes a tough ask to expect investors to leave cash in for 10 years, so in addition to the preferred return and really strong cash flow, Investors also will have their initial investment returned in year 5 by way of a refinance, continue to receive cash flows years 6-10, and then get a large (potentially tax free) pay out at year 10. At refi in year 5, Gross Potential Income should be $1.14 million, at sale in year 10 GPI is $1.38 million with cash flows of $796k. At a 6 Cap, the valuation on the property at refi in year 5 should be $13,500,000. In year 10 at sale, at a 6 Cap, evaluation should be $16,900,000. Man, I love storage, and love conversion projects even more!!! ON TO THE NEXT!!!