Property Analysis: Chapman Plaza, Orange County

Image from the OM

We have taken to the web and found a new property to showcase. Chapman Plaza is a strip center in Orange County. Loading this property into Investart, we can quickly see the financial returns of this investment opportunity. For this analysis, we will also be using the newest feature, the waterfall distribution.

High Level View

This deal is pretty straightforward. It’s a stabilized deal in north Orange County. The property is located on Chapman Ave, which is a major street in the area. Five out of the nine tenants have been in the center for over 50 years. This center has been stable, making it a lower-risk investment in a great location. It appears that either the owner or a tenant will be leasing back a unit for a year.

Waterfall Distribution

The broker has priced this investment at $5,175,000. We have added $50k for closing costs. We have also added 60% debt with 12 months of Interest Only (IO) for this example. For this investment, we will also showcase the latest waterfall distribution feature. The General Partner (GP) will be investing 15% of the equity, and the promote will be structured Pari Passu to a 7.00%, 80/20 up to a 12%, 70/30 to a 15%, and 60/40 above that.

Waterfall output

Sensitivity Table: Leveraged Returns

The web tool now also includes a sensitivity table. For this example, we have taken the Leveraged sensitivity table to showcase a potential pricing strategy. If, as an investor, your minimum leveraged return is a 10% IRR, then the maximum offer you should make is $4,925,000. Total Investment includes closing costs and stabilization costs, which are year 1 Tenant Improvements (TIs) and Leasing Commissions. These costs are taken in the IRR calculation.

Leveraged Returns sensitivity table


This seems like a solid and stable investment. We assumed that rent growth would be 6% year 1, 4% year 2, and 3% thereafter. With the way the market is moving, those numbers could be conservative. We also did not include a cap-ex schedule, which is something that a potential investor would have to consider. If a property like this fits your investment criteria, it is certainly worth taking a look at.

If I have piqued your interest, take a look at the model for this property. The first link is the full report in PDF form. The second link is the live model already loaded into Investart. You’ll need to sign in to your account and then click the link, and a copy will appear on your account. It is completely free to sign up for an account at Investart. For any questions regarding the property, please contact the listing broker, which can be found in the last link.

Chapman Plaza full Analysis (PDF)

Base Case analysis

Property Listing website




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Jorge Solis

Jorge Solis

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