New York, NY
ACCRE Sponsor Equity Fund, LP (“Fund”), in partnership with Forstone Capital, LLC (“Forstone”), currently is under contract to purchase its fourth deal within the Fund. Our local partner, Forstone, has extensive experience repositioning office and retail properties in Connecticut. The investment is projected to deliver some degree of current cash-on-cash return (average 3.8%) during the redevelopment, and an IRR between 10.0-13.0% over the investment horizon.
The purchase price of $9,250,000 translates to a price of $924 PSF compared to recent sales in the $2,000 PSF range. Properties on Main Street change hands very infrequently and much of the strip has been upgraded. High-end retailers such as Williams-Sonoma, Vineyard Vines, Coach, West Elm, and Brooks Brothers all have a presence on Main Street.
The property has underperformed for several years as a result of current ownership’s failure to maintain the building adequately and to enforce its leases. This lack of attention to repair and maintenance of the property has precluded the seller from attracting a high-quality credit retail tenant that would pay the rent supported by the rest of the market. We plan add value by evicting the tenants currently in default, redeveloping the Main Street frontage to accommodate a single credit tenant, by compelling Bobby Q’s to maintain its space in accordance with its lease, and later by repositioning the Bobby Q’s space at the rear of the building to integrate with the forthcoming Bedford Square redevelopment.