Somerset — Safeway Anchored Retail Center

The property was acquired in April 2015 for $5.75 million as a fully stabilized neighborhood retail center shadow-anchored by Safeway, with the partnership owning the inline shop space. The seller was forced to dispose of the asset due to legal issues, creating an opportunity to acquire a 100% occupied, cash-flowing property at an attractive basis.

At acquisition, the asset was generating approximately $542,000 of NOI. The investment strategy focused on maintaining high occupancy while increasing rents through tenant rollover and disciplined leasing. The original underwriting projected NOI of approximately $673,000 at a 2019 exit, supporting an estimated value of $8.9 million at 95% occupancy.

Performance has exceeded the original business plan. Current NOI is approximately $888,000 in 2026, significantly above both acquisition income and the original pro-forma exit projection. The increase in cash flow has been achieved while maintaining strong occupancy and controlling capital costs throughout the hold period.

The property was refinanced during the hold, returning approximately 33% of the investors' original equity while maintaining ownership of the asset. Based on current performance, the remaining equity is generating approximately a 38% annual cash-on-cash return, including both cash flow distributions and principal paydown.

Based on a current valuation of approximately $11 million at 95% occupancy, the asset has materially outperformed the original underwriting, driven by steady rent growth, consistent occupancy, and disciplined long-term asset management.

This investment demonstrates the ability to generate strong returns from a stabilized acquisition through income growth, refinancing, and long-term hold performance, resulting in NOI, valuation, and investor returns exceeding the original business plan.