About this Property
This is a sale-leaseback to White Star Petroleum on a 15-year absolute NNN lease with no landlord responsibilities and four 5-year options. The investor will receive an 8% preferred return, then 70% of the cashflow above the 8% pref to a 20% IRR, then 50% of the cash flow thereafter. Sponsorship expects to hold the property for five years and deliver a 20%+ IRR to the investors.
Risk & Mitigants to Risk
There is volatility in the oil/gas industry in large part due to the variable pricing environment. The price of oil has recently dropped into the high $40’s where many expect it to remain until the first quarter of 2018 when industry analysts expect it to rise to $60 per barrel. White Star also has a lead equity sponsor, The Energy and Minerals Group (EMG), a $14.7 billion private equity firm specializing in investments in the oil and gas business with a track record of success.
- New construction in 2015, state of the art field office for White Star’s north central Oklahoma drilling and operations.
- Rent increases 2% annually during the term of the lease.
- White Star is backed by EMG, a $14.7B private equity firm
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