Projects
Cap Rate 8.5%
Incremental D V, LLC’s first quarter of 2011 acquisition was that of an AT&T Corporate leased asset located in Bartlesville, Oklahoma. The building itself was built in May of 2010, and has in place a ten (10) year lease with two five (5) year options. Bartlesville is located just north of Tulsa, and among other things is home to oil mogul Phillip’s Petroleum Company, now ConocoPhillips (aside from Walmart’s distribution center, ConocoPhillip’s is one of Bartlesville’s largest employers).
Incremental, through it’s network was able to negotiate an 8.5% cap rate on the asset. Comparable asset’s in like kind demographical locations are currently being listed at an, or south of, an 8% cap. Which in light of the markets demand for this strong corporate tenant, leaves Incremental’s asset with built in equity on day one.
Through it’s lending relationships, Incremental was able to procure favorable financing which when married with the asset’s cap rate, allowed for the members of Incremental D V to enjoy an annual 10% cash on cash return (paid in monthly disbursements). The financing put in place affording all members to not only have their money safely working for them at the rate of 10% a year, but in addition begins the accruing of equity on day one, which continues for the life of the hold. Invariably this benefits the members on two fronts, annual cash flow, and the growth of their initial capital contribution (realized upon divestiture).