The three reasons this asset cleared the doctrine, written before the wire went out.
The dominant daily-needs strip center on Chillicothe's primary retail corridor (US-65), fully leased to a ten-tenant necessity roster anchored by NAPA Auto Parts, Dollar Tree, and Maurices. The three anchors carry roughly 60% of rent on leases running to 2029–2031 with options beyond, and the center was renovated in 2025.
Bought at $77/SF — well below replacement cost — at a ~9.1% cap on in-place income, with seller financing negotiated directly: a fixed-rate, interest-only note carried by the seller, with roughly 2.5x debt-service coverage from day one. The county assessor has confirmed in writing that property taxes do not reset on sale, removing the largest hidden risk in small-market retail underwriting.
The value-add is lease administration, not speculation: five smaller tenants pay gross rent today, and each converts to triple-net at its scheduled renewal inside the hold — the two largest in 2028 — shifting taxes, insurance, and CAM to tenants where the market already prices them. Exit target is year five as a cleaner, majority-NNN center.
10 tenants, 100% occupancy, anchored by NAPA · Dollar Tree · Maurices.
| Tenant | Type | Sq ft | % NOI | Lease end | Options |
|---|---|---|---|---|---|
| NAPA Auto Parts | Necessity · national | 12,390 | 23% | 2030 | options to 2045 |
| Dollar Tree | Necessity · national | 7,752 | 25% | 2031 | options to 2046 |
| Maurices | Apparel · national | 6,572 | 12% | 2029 | below-market rent |
| Vaper Maven | Specialty · local | 2,824 | 11% | 2028 | NNN |
| Allied / Flex Staffing | Service · regional | 2,366 | 8% | 2028 | gross → NNN at renewal |
| Chillicothe Pharmacy | Health · local | 2,774 | 8% | 2028 | gross → NNN · options to 2034 |
| Subway | F&B · national franchisee | 1,573 | 3% | 2028 | NNN |
| Better Way | Service · local | 1,540 | 4% | 2031 | gross → NNN at renewal |
| Army Recruiting (GSA) | Government | 793 | 5% | 2027 | renewal in diligence |
| Management office | Office · local | 920 | 2% | 2030 | gross → NNN at renewal |
Modeled on twelve months of trailing actuals, not stabilized pro-forma. Closed all-cash, so cash flow to equity equals NOI.
| Y1 | Y2 | Y3 | Y4 | Y5 (exit) | |
|---|---|---|---|---|---|
| Effective gross income | $367,986 | $375,581 | $383,334 | $391,250 | $399,332 |
| NOI | $276,533 | $281,922 | $287,415 | $293,017 | $298,728 |
| Debt service, reserves & admin | ($117,625) | ($118,125) | ($118,638) | ($119,163) | ($119,701) |
| Cash flow to equity | $158,908 | $163,797 | $168,778 | $173,854 | $179,027 |
| Cash-on-cash | 9.6% | 9.9% | 10.2% | 10.5% | 10.8% |
All-cash close. The sponsor co-invested 5% of equity on identical terms to the LP class (prior partner-firm venture).
| LP equity (95%) | $1,577,643 | 95% |
| GP co-invest (5% of equity) | $83,034 | 5% |
| TOTAL EQUITY RAISE | $1,660,677 | 100% |
| Seller-carried financing | fixed · interest-only | — |
| Acquisition cash at close & transaction costs | $1,424,250 | 85.8% |
| Operating reserve | $40,000 | 2.4% |
| Sponsor fees (acquisition & structuring) | $196,427 | 11.8% |
| TOTAL | $1,660,677 | 100% |
Where the deal still pencils — and where it stops. The base case sits in the middle, not at the edge.
| NOI growth ↓ / Exit cap → | 7.50% | 8.00% | 8.25% | 8.60% | 9.00% |
|---|---|---|---|---|---|
| +2.5%/yr | 15.6% | 13.6% | 12.6% | 11.2% | 9.7% |
| +2.0%/yr | 14.7% | 12.6% | 11.6% | 10.2% | 8.7% |
| +1.5%/yr | 13.7% | 11.6% | 10.6% | 9.2% | 7.6% |
| +1.0%/yr | 12.7% | 10.6% | 9.5% | 8.1% | 6.5% |
| +0.5%/yr | 11.7% | 9.5% | 8.5% | 7.0% | 5.4% |
What actually happened — and when. Every step recorded, every document on file.
Memo, model, OA, sub docs, third-party reports, current rent roll. Updated monthly post-close.
We'll send the current portfolio brief, a sample deal memo, and an invite to the next quarterly investor call.