Small Bay Industrial Investment Launches In Clearwater, Florida

When you click add to cart or buy on an app, you don't see what happens behind the scenes. A complicated supply chain springs into action. Last-mile logistics, a network of warehouses and distribution centers located near enough to your town to provide fast delivery, is part of making sure you get your goods in a timely manner.

Investing in industrial real estate, whether through REITs like Prologis (NYSE PLD) or through private investment, should continue to reward investors for years to come. In a note, Fidelity Portfolio Manager Bill Maclay laid out why industrial real estate remains a prime area for commercial real estate investing: "As retailers move operations online or pursue an omnichannel strategy, they need facilities to store their products.”

Trending: Commercial real estate has historically outperformed the stock market, but few investors have the capital or resources needed to invest in this asset class. Get started investing in commercial real estate today.

Playing into that theme is a new offering from EquityMultiple, which is offering accredited investors the opportunity to participate in a $2.2 million limited partner equity investment in Bayside 44 Industrial Park, a 95% occupied, 46,200-square-foot multi-bay industrial property in Clearwater, FL. Clearwater is in the greater Tampa area, a fast-growing part of Florida. 

The sponsor, Oracle Equity Group, is a New York-based real estate investment firm specializing in last-mile industrial assets. It is an affiliate of Ultimate Realty, with whom EquityMultiple has made five prior investments. EM Investment Partners will serve as a co-sponsor, providing extra oversight. Oracle found the property through its existing relationships and is under contract to purchase it for $5.8 million. This is a 25% discount compared to other comparable transactions in the area. 

Bayside 44 currently has nine tenants, around a third of whom are month-to-month. The remaining tenants have a weighted average lease term of 1.2 years. There is room for improvement here. Current rents are around a 37% discount to market rents, and nearly half of the tenants have gross lease structures rather than triple-net lease structures. In a triple-net lease, the renter, rather than the property owner, is responsible for property-related operating expenses. The sponsor plans to raise the leases to market prices and restructure all new leases or lease renewals to the triple-net structure. Oracle Equity Group will also make some improvements to the property, including paint and parking lot repairs. It has also allotted money to repair the roof if necessary. 

The target net internal rate of return for this investment is 21.3%, with an equity multiple of 1.5x. It is expected to have a two-year hold. The minimum investment is $15,000. 

Not Ready To Invest $15,000?

If this deal isn't right for you and you aren't ready to commit $15,000, EquityMultiple has other options for investors. The Ascent Income Fund targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).

The Bayside 44 Property was built in 1984 and consists of three industrial buildings on 2.5 acres. It has 34 overhead doors, and each unit has flow-through drive-in doors. Each unit has its own dedicated office space and bathroom. The sponsor intends to use Ciminelli Real Estate Corporation, an institutional-grade firm with experience managing small bay assets, to manage the property. Ciminelli is the same property management group seen on other EM small bay investments, such as Greater Orlando Small Bay Industrial. Lober Real Estate Investments will handle the leasing strategy. 

With logistics properties, location is critical. This facility is located less than four miles from I-275 and is around 14 miles from the Tampa International Airport. The property type, location, and short hold period make this property a potentially lucrative investment. All investors are encouraged to conduct due diligence by reading the offering memorandum on the EquityMultiple website. 

.