Tampa-St. Petersburg, FL

Realized Deal : Bay Tec & Airport Corporate Center

Sponsored By Avistone

Risk Profile
Core-Plus
Amount Invested
$440,000
Targeted IRR
13.1%
Actual IRR*
19.7%
Targeted Equity Multiple
1.73x
Actual Equity Multiple*
1.52x
Targeted Hold Period
5.0 years
Actual Hold Period
2.4 years

In August 2017, Avistone launched an offering for a flex industrial investment opportunity in the Tampa MSA consisting of two properties, totaling 14 buildings and 231,867 square feet. Together, the properties were home to 56 tenants and offered a variety of office to warehouse finishes, ease of access to most major thoroughfares in the market, and the ability to cross sell vacancies. Avistone’s primary objectives were to operate the properties efficiently, distribute available cash, and create value by taking full advantage of Tampa’s strong industrial market by increasing occupancy in the tight market. Avistone believed that this acquisition represented an excellent opportunity to invest in under-performing, multi-tenant assets in a dynamic, high-occupancy market at below replacement cost. The properties offered in-place cash flow, leasing risk was spread among multiple tenants, and completing deferred maintenance and ensuring vacant units were in “clean and show” condition provided the potential for value-creation via increased occupancy, rental income, and net operating income.

Project Timeline

Improvements Substantially Complete

March 2021

Avistone reported that good progress had been made on initiating and completing much of the capital improvement program as both properties suffered from deferred maintenance under the prior ownership. At Bay Tec, the roof repair work, the parking lot project, and the landscaping project were completed in Q1 2018. The first phase of the market-ready work was also completed, and Avistone was finalizing plans on the second phase of the work. At Airport Corporate Center (ACC), all three roofs were replaced as planned, and the fourth received extensive repairs. The parking lot project was also finalized, along with the first phase of the market-ready work. Lastly, the landscaping work had also been completed, although Avistone was still evaluating some additional fine tuning to enhance the market window. The signage program, which would also enhance the market window, was in the design phase.

Sale

March 2021

Throughout 2019, the properties retained high occupancy and performance remained strong. Although Avistone was not in the market to sell the properties, an opportunistic exit scenario presented itself and Avistone decided to sell the assets as part of a larger portfolio sale. The sale transaction was officially completed in March 2020.

Strong Performance

December 2021

In Q4 2018, the combined occupancy surpassed 90% with leasing activity at both properties continuing to be strong. Due to the positive performance, Avistone continued making monthly distributions and increased the annualized distribution rate to investors from 7% in 2018 to 8% for 2019.

Final Outcome

Good business plan execution and favorable market conditions led to an opportunistic exit opportunity which allowed Avistone to achieve strong returns for investors, including a higher-than-projected IRR.

*Net of fees

This report contains explanations of a series of events associated with Avistone’s Bay Tec & Airport Corporate Center offering that resulted in an approximate 52% (net of fees) absolute return on original equity to investors (including those from the CrowdStreet Marketplace). Certain aspects of the report such as dates of major events and the final outcome are easily verifiable while others, particularly underlying reasons behind the sponsor’s business plan execution, are not.

The report partially relies upon the sponsor’s explanations, the information contained within sponsor-produced quarterly reports, and conference calls. This analysis is not an assertion of independently verified facts but, rather, is for informational purposes only, to convey CrowdStreet’s understanding of what transpired.

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