The purchase will be financed through 70% bank financing and the balance through the proceeds received from the sale of the company’s rights in a parking lot in Miami, as part of an exchange of assets.
Based on the existing occupancy, the purchase of the property is expected to increase the company’s annual NOI by approximately NIS 13 million and the annual FFO by approximately NIS 10 million.
Plains Real Estate Investments Announced that it had entered into an agreement to acquire full ownership of an open-air commercial and entertainment center (Plaza) known as “Willowbrook Plaza” near Houston, Texas for about $ 37.1 million. The company intends to finance the purchase with bank financing at a rate of approximately 70% and the balance of the cost through the proceeds received from the sale of the company’s rights in the parking lot in Miami, as part of an exchange of assets (1031 Like Kind Exchange).
The property is built on a plot of land with a total area of approximately 166,000 square meters with an area for rent of approximately 36,000 square meters. As of the date of the report, the occupancy rate of the property is approximately 78%. Based on the existing occupancy, the expected rent from the property in the first year is approximately $ 6.9 million and the expected NOI in the first year is approximately $ 4.1 million, which is an 11% return on the property in the existing occupancy. Assuming financing at a rate of 70%, the return on equity stands at over 25%.
The property is rented to a number of tenants, including a cinema from the largest cinema chain in the US – AMC, and an activity center for children from the Kids Empire chain. In addition, the property has several tenants from the discount retail sector, including And Five below. These seven tenants together occupy an area of about 22.2 thousand square meters together – 62% of the central area. Completion of the transaction is expected during the fourth quarter of 2021.
Daniel Leventhal, Credit: Plains
Daniel Leventhal, CEO of Mishorim, said: “We are pleased to announce the acquisition of a first-rate property in Houston, the largest city in Texas and the fourth largest in the United States, with a growing population of approximately 2.3 million residents. The property is anchored in strong tenants and has the potential for future improvement, with an expected return of 11% in the first year and a return on capital of over 25% and all based on existing occupancy. The acquisition will significantly improve the Company’s NOI and enable the continued strengthening of the FFO, in line with the Company’s strategy to generate significant cash flow profit. The investment in capital will be made through the proceeds the company received from the Miami parking lot sale earlier this month, so we can take advantage of the tax deferral through Section 1031 – U.S. Property Transfer. The cash. ”
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