The three reasons this asset cleared the doctrine, before a dollar is committed.
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 center draws 300,000+ visits a year against a five-mile population of roughly 10,600 — nearly 30 visits per resident annually. This is where the county shops. The three anchors carry roughly 60% of rent on leases running to 2029-2031 with options beyond, and the seller reinvested in the center in 2024-2025 to subdivide and re-tenant the former grocery box.
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 more than 3x 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 verified in-place income, not stabilized pro-forma. Cash flow to equity is net of seller-carried debt service.
| Y1 | Y2 | Y3 | Y4 | Y5 (exit) | |
|---|---|---|---|---|---|
| Income | |||||
| Base rental income (2.0% growth) | $312,647 | $318,900 | $325,278 | $331,783 | $338,419 |
| Recovery — real estate taxes | $17,713 | $18,156 | $18,610 | $19,075 | $19,552 |
| Recovery — insurance | $27,600 | $28,290 | $28,997 | $29,722 | $30,465 |
| Recovery — common area (CAM) | $14,536 | $14,899 | $15,272 | $15,654 | $16,045 |
| Total expense recoveries | $59,849 | $61,345 | $62,879 | $64,451 | $66,062 |
| Other income (license agreement) | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
| Gross potential income | $375,496 | $383,245 | $391,157 | $399,235 | $407,482 |
| Vacancy & credit allowance (2.0%) | ($7,510) | ($7,665) | ($7,823) | ($7,985) | ($8,150) |
| Effective gross income | $367,986 | $375,581 | $383,334 | $391,250 | $399,332 |
| Operating expenses (2.5% growth) | |||||
| Real estate taxes (assessor-confirmed) | ($19,254) | ($19,735) | ($20,228) | ($20,734) | ($21,252) |
| Insurance | ($30,000) | ($30,750) | ($31,519) | ($32,307) | ($33,114) |
| Common area maintenance (CAM) | ($15,800) | ($16,195) | ($16,600) | ($17,015) | ($17,440) |
| Property management (5.0% of EGI) | ($18,399) | ($18,779) | ($19,167) | ($19,562) | ($19,967) |
| Replacement reserve | ($8,000) | ($8,200) | ($8,405) | ($8,615) | ($8,831) |
| Total operating expenses | ($91,453) | ($93,659) | ($95,919) | ($98,233) | ($100,604) |
| Net operating income | $276,533 | $281,922 | $287,415 | $293,017 | $298,728 |
| Below the line | |||||
| Debt service (4.75% interest-only) | ($83,125) | ($83,125) | ($83,125) | ($83,125) | ($83,125) |
| Asset management fee | ($12,000) | ($12,000) | ($12,000) | ($12,000) | ($12,000) |
| Leasing reserve | ($10,000) | ($10,250) | ($10,506) | ($10,769) | ($11,038) |
| Entity administration | ($10,000) | ($10,250) | ($10,506) | ($10,769) | ($11,038) |
| Cash flow to equity | $161,408 | $166,297 | $171,278 | $176,354 | $181,527 |
| Cash-on-cash yield | 9.4% | 9.7% | 10.0% | 10.3% | 10.6% |
| NOI margin / DSCR | 75.1% · 3.3× | 75.1% · 3.4× | 75.0% · 3.5× | 74.9% · 3.5× | 74.8% · 3.6× |
The full financial model, rent roll, and third-party reports are available to verified accredited investors.
Financed directly by the seller, no bank, no floating rate. Stoneforge co-invests 5% of the equity on identical terms to investors.
| Seller-carried financing · fixed, interest-only | $1,750,000 | 50.5% |
| LP equity (95% of equity) | $1,627,789 | 47.0% |
| GP co-invest (5% of equity) | $85,673 | 2.5% |
| TOTAL CAPITALIZATION | $3,463,462 | 100% |
| Property acquisition, closing & diligence | $3,174,250 | 91.6% |
| Operating reserve | $40,000 | 1.2% |
| Sponsor fees (acquisition & structuring) | $249,212 | 7.2% |
| TOTAL | $3,463,462 | 100% |
How the projected return holds up if the market moves — every cell is the IRR at that rent growth and exit price.
| NOI growth ↓ / Exit cap → | 7.50% | 8.00% | 8.08% | 8.60% | 9.00% |
|---|---|---|---|---|---|
| +2.5%/yr | 14.9% | 12.9% | 12.5% | 10.5% | 9.0% |
| +2.0%/yr | 14.0% | 11.9% | 11.6% | 9.5% | 8.0% |
| +1.5%/yr | 13.0% | 10.9% | 10.6% | 8.5% | 7.0% |
| +1.0%/yr | 12.0% | 9.9% | 9.6% | 7.5% | 5.9% |
| +0.5%/yr | 11.0% | 8.9% | 8.5% | 6.4% | 4.8% |
Where the deal stands today, and the path to close. 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.
