Property Analysis: Chimney Rock Plaza, Bridgewater, NJ
We are taking a look at Chimney Rock Plaza in Bridgetown, New Jersey. This is a stabilized acquisition in what is being categorized as an affluent community. This investment is located in a retail corridor with many national brands in the surrounding area. This is an older building built in the ’80s. Seven out of the ten tenants are signed to long-term NNN leases making it a relatively stress-free investment.
We loaded this ten tenant property in Investart and were able to gain a much fuller understanding quickly. With this many tenants, it's a good idea to understand how the tenants are rolling. The screenshot below from the Investart dashboard shows that the tenants are rolling in a fairly even manner, minimizing any potential cash flow shortfalls and capital injections.
We can also see how the tenants' rollover is doing relative to market rent on the dashboard. In this case, year 5 seems to have the widest gap (see below). It is essential for an investor to understand what is going on with this lease and if the market leasing assumption (MLA) is too high for this unit. You can easily change the MLA for this unit if the investor ultimately deems it too high.
The broker did not provide any sales comps in the OM, so the assumption we are making is 50 basis points over the 6% going-in cap rate shown. We are also using a ten-year hold period. Looking at the cash flow page on the property report, we can see that the optimal time to sell would be year 9. We can see this based on the rolling IRR (see below) that is automatically calculated, and year 9 is the highest. Any buyers should look at any deferred maintenance or other capital expenditures needed. With a building of this vintage, there would be a big swing in the returns.
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.
Chimney Rock Plaza full Analysis (PDF)