AccretivPartners is pleased to present Red Oak Atrium, a 2-story medical office building situated in Houston, Texas, comprised of 28 individual medical office suites.
The Medical Office complex sits on approximately 2.6 acres and is 53,066 SF. Initially built in 1979, the building has withstood the test of time but was renovated in 1985, and then had substantial renovations in 2007 and 2016.
The building is close to Northwest Medical Center, an HCA-owned hospital, and features covered parking, on-site maintenance, security, a pharmacy, and easy access to the I-45 and Sam Houstontollways. The building was awarded an Energy Star label in 2009 and 2011 for its operating efficiency.
Business Plan
The building will be acquired for our Accretiv Fund (AccretivMED Real Estate Fund 1 or Accretiv Fund LLC, “ACCFUND” depending on sources). We are acquiring the building from our partners, who previously acquired it as a distressed asset and have subsequently stabilized it to the point that it qualifies to be acquired by the ACCFUND. They will remain strongly incentivized to lease up the 38.9% vacancy and extend the weighted average lease term to create significant value. The building is already strongly cashflow positive and can distribute 7% cash on cash, with an anticipated IRR of 16,5% - 19,5%. We are acquiring the building all cash for $3,5 million at an exceptional price of only $64 per square foot, and an incoming Cap rate of 9.07%.
The property will be acquired in the existing entity, which has zero external debt, but includes $900,000 of seller finance. Equity required will be $2,550,000, of which $1,000,000 will be available to select US accredited VIP investors and the balance will be provided by our ACCFUND.
We aim to lease the building up to 75% and the hold period is projected to be three years. The acquisition will be funded initially all cash, but debt will be raised once interest rates move downwards, for the installation of new tenants and broker commissions.
Deal Parameters
The Medical Office complex sits on approximately 2.6 acres and is 53,066 SF. Initially built in 1979, the building has withstood the test of time but was renovated in 1985, and then had substantial renovations in 2007 and 2016.
The building is close to Northwest Medical Center, an HCA-owned hospital, and features covered parking, on-site maintenance, security, a pharmacy, and easy access to the I-45 and Sam Houstontollways. The building was awarded an Energy Star label in 2009 and 2011 for its operating efficiency.
Business Plan
The building will be acquired for our Accretiv Fund (AccretivMED Real Estate Fund 1 or Accretiv Fund LLC, “ACCFUND” depending on sources). We are acquiring the building from our partners, who previously acquired it as a distressed asset and have subsequently stabilized it to the point that it qualifies to be acquired by the ACCFUND. They will remain strongly incentivized to lease up the 38.9% vacancy and extend the weighted average lease term to create significant value. The building is already strongly cashflow positive and can distribute 7% cash on cash, with an anticipated IRR of 16,5% - 19,5%. We are acquiring the building all cash for $3,5 million at an exceptional price of only $64 per square foot, and an incoming Cap rate of 9.07%.
The property will be acquired in the existing entity, which has zero external debt, but includes $900,000 of seller finance. Equity required will be $2,550,000, of which $1,000,000 will be available to select US accredited VIP investors and the balance will be provided by our ACCFUND.
We aim to lease the building up to 75% and the hold period is projected to be three years. The acquisition will be funded initially all cash, but debt will be raised once interest rates move downwards, for the installation of new tenants and broker commissions.
Deal Parameters
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