TerraCap Partners Acquires 10,000 Sq. Ft. Office Building in North Ft. Myers, Fla.
- Off-market transaction purchased at less than 50 percent of replacement cost -
NAPLES, Fla., Dec. 17, 2012 /PRNewswire/ -- TerraCap Partners is pleased to announce it has acquired a 10,000 square-foot office building located near the corner of U.S. 41 and Hancock Bridge Parkway in North Fort Myers, Fla. TerraCap was able to purchase the building at less than 50 percent of replacement cost after ownership of the property was transferred back to the lender earlier this year.
Originally built in 1975, the property underwent extensive renovations in 2007 to upgrade the facade, roof, landscaping and 3,000 square feet of interior office space. Two tenants currently occupy 3,000 square feet of space and their leases will generate annualized gross income equal to 10 percent of TerraCap's purchase price. The remaining 7,000 square feet of office space is available for lease and the property includes a billboard that also generates additional monthly income.
"This acquisition demonstrates the strength of TerraCap's distressed commercial real estate strategy," said W. Stephen Hagenbuckle, founder and co-managing partner of TerraCap. "Because of our deal sourcing capabilities and our focus on smaller distressed commercial properties, we were able to negotiate a very attractive price and close quickly in a market where there are not a lot of willing or qualified buyers."
The deal is the latest acquisition from TerraCap Partners II, the firm's latest opportunity fund. So far, TerraCap's second fund has made several investments comprising more than 610,000 square feet of apartments, office, light industrial, hotel and mixed-use properties and 330 acres of land. The firm has begun harvesting investments made from its first fund, launched in 2009, whose purchases of distressed Florida residential real estate have recorded initial IRRs of more than 30 percent.
"This was a unique deal that fits squarely into our strategy of buying high-quality off-market properties at a substantial discount to replacement cost," said TerraCap co-managing partner Bob Gray. "We expect to lease the remaining space in the building, which will generate steady income to further enhance returns for our investors."
About TerraCap Partners
Based in Naples, Fla., TerraCap Partners was founded in 2008 by W. Stephen Hagenbuckle to take advantage of the distressed real estate markets in Florida. The firm's first fund, TerraCap Fund I, closed in December 2010 and has executed 15 deep value land investments in high growth markets in southwestern Florida. The firm is currently raising its second fund with an initial target of $200 million. TerraCap Fund II is focused more broadly on southeastern U.S. and mainstream commercial properties. Commercial real estate veteran Robert Gray joined the firm in 2011 as co-managing principal, bringing his experience from a career at JPMorgan, Morgan Stanley and Cantor Fitzgerald.
The firm takes a thematic approach to its investment activities with an emphasis on understanding real estate and migratory trends, banking regulatory pressures, and general market inefficiencies to acquire real estate assets that are mispriced, overlooked or undervalued. TerraCap's prides itself on being able to close transactions quickly with all cash. For more information please visit www.TerraCapMgmt.com.
SOURCE TerraCap Partners
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