Review Mapping Location Logic
Review Mapping Location Logic — Recording
Executive Summary
# Property Portfolio Review --- ## **Common Drive Property** **Leasing Challenges** The property faces difficulties leasing two vacant 900 sq ft retail spaces due to its tertiary location and small size, making it less attractive for brokers (6% commission structure yields low returns). A new leasing agent from Dominion Commercial was engaged in October 2023, offering future sale agency incentives to expedite leasing. **Financial & Market Outlook** - Purchased for **$1.7M** with stabilized cash-on-cash returns of **7–8%**, but current vacancies halt distributions. - Plans to sell after leasing, though stagnant rents and higher interest rates may limit valuation gains compared to 2020/2021 market conditions. --- ## **Fairfield Medical Building** **Tenant Updates** - **Retina Center**: Secured a 5-year lease extension through 2029 with rent increases. - **Hospital Tenant**: Lease expires April 2025 with a 15% CPI-based renewal option. Proposal to negotiate a **10-year extension** with a reduced rent hike (5–8%) to enhance long-term stability. **Performance** Consistently delivers **8% returns** with no missed payments. Positioned for a potential sale post-lease renegotiations to capitalize on peak valuation. --- ## **Guidepost Montessori Property** **Tenant Crisis** - Tenant pays reduced rent ($28k/month vs. $38k originally), covering loan payments but leaving minimal reserves ($21k/month mortgage). - Financial instability persists: corporate leadership changes, unprofitable locations, and monthly financial disclosures show ongoing struggles. **Contingency Planning** - **Cash Reserves**: 2.5 months of mortgage payments saved. - **Replacement Tenant Options**: - *Learning Experience*: Offers $34/sq ft (below current $38/sq ft) but demands **$750K–$1M** in tenant improvements. - Local preschool operator: Expressed interest but no formal LOI. **Critical Juncture** Full rent payments resume in **January 2026**, posing a liquidity risk if tenant defaults. Current strategy focuses on monitoring payments and preparing for potential bankruptcy fallout. --- *Note: All properties face location-driven risks, emphasizing the importance of tenant diversification and lease renegotiation strategies.*
Leasing Challenges The property faces difficulties leasing two vacant 900 sq ft retail spaces due to its tertiary location and small size, making it less attractive for brokers (6% commission structure yields low returns). A new leasing agent from Dominion Commercial was engaged in October 2023, offering future sale agency incentives to expedite leasing.
Financial & Market Outlook
Purchased for $1.7M with stabilized cash-on-cash returns of 7–8%, but current vacancies halt distributions.
Plans to sell after leasing, though stagnant rents and higher interest rates may limit valuation gains compared to 2020/2021 market conditions.
Fairfield Medical Building
Tenant Updates
Retina Center: Secured a 5-year lease extension through 2029 with rent increases.
Hospital Tenant: Lease expires April 2025 with a 15% CPI-based renewal option. Proposal to negotiate a 10-year extension with a reduced rent hike (5–8%) to enhance long-term stability.
Performance Consistently delivers 8% returns with no missed payments. Positioned for a potential sale post-lease renegotiations to capitalize on peak valuation.
Guidepost Montessori Property
Tenant Crisis
Tenant pays reduced rent ($28k/month vs. $38k originally), covering loan payments but leaving minimal reserves ($21k/month mortgage).
Financial instability persists: corporate leadership changes, unprofitable locations, and monthly financial disclosures show ongoing struggles.
Contingency Planning
Cash Reserves: 2.5 months of mortgage payments saved.
Replacement Tenant Options:
Learning Experience: Offers $34/sq ft (below current $38/sq ft) but demands $750K–$1M in tenant improvements.
Local preschool operator: Expressed interest but no formal LOI.
Critical Juncture Full rent payments resume in January 2026, posing a liquidity risk if tenant defaults. Current strategy focuses on monitoring payments and preparing for potential bankruptcy fallout.
Note: All properties face location-driven risks, emphasizing the importance of tenant diversification and lease renegotiation strategies.
Key Topics
Decisions
No decisions recorded
Action Items(0/4 done)
Prepare preliminary financial position analysis for Common Drive property
Assigned to
Continue monitoring Guidepost Montessori's monthly financial reports
Assigned to
Begin negotiations with Kettle Hospital for lease extension
Assigned to
Continue building cash reserves for Guidepost property contingency
Assigned to