444 & 446-484 S Rand Road – Lake Zurich

Investment Overview

Originally called “1st Bank Plaza” – these two properties were acquired by the Sponsors in April of 2012.  We were drawn to the property’s superior location (at the heavily travelled intersection of Routes 12 and 22 in Lake Zurich) and the stability of the anchor Tenants (Chase Bank and D&J Bistro, comprising over 40% of the income).  We also recognized the incredible upside in leasing (the property was under 75% occupied at acquisition) while benefitting from a stable cash flow and an attractive going-in cap rate (north of an 11-cap on existing income), resulting in an enviable basis of approximately $67 psf. 

Investment Summary

Through superior property management and an aggressive leasing program, we were able to stabilize the property at north of 90% occupancy for a majority of the holding period.   Over that time, we also created significant value by recognizing a one acre out lot on the very corner of the property, which we re-subdivided for future development – allowing a very lucrative sales price on the disposition. 

We were successful in achieving outsized returns to our investors (25.9% IRR) and a very robust 5.24x equity multiple.