Investment Overview

Riverside Plaza is a 62,538 sf stabilized shopping center in Belvidere, IL.  The property is located on State Street and has tremendous visibility in the heart of downtown.  At acquisition, the rent roll was made up of a majority of credit tenants including Salvation Army (the largest tenant and the center’s anchor), Rent-A-Center, Dollar General and Check ‘N Go.  Our incoming basis was incredibly low ($30 psf) in large part because the Salvation Army lease, at 37,000 sf, was only $4.75 full gross.  That was the opportunity we saw to increase value significantly.   

In early 2019, Salvation Army’s neighbor, Rent-A-Center, vacated the property and we immediately started marketing this space to gyms – which were a demand gap in the market.  We were successful in putting a deal together with Planet Fitness – but only after “right-sizing” Salvation Army and reducing their square footage down to 25,000.  We then built out the space for Planet Fitness and increased rent from the $4.75 Salvation was paying to $8.50 NNN. 

Investment Summary

Ownership was successful in creatively adding value with the Salvation Army reduction of space and the subsequent replacement of that low rent with Planet Fitness.  We also did another very unique deal on the other side of the property where we removed a local gym from the front of the store and created a new entry off of the side street.  They were given the back side of the two corner spaces and we were successful at backfilling those spaces to a gaming café and a testing center. 

We were successful in achieving outsized returns to our investors (18%+ IRR) and a very strong 2.4x equity multiple.