INVESTMENT OPPORTUNITY

350 E. MAIN STREET PATCHOGUE, NY

INVESTMENT HIGHLIGHTS

8% Preferred return

6.24% going-in cap rate

7.3% Value add cap rate

16.3% investor irr

20.88% annualized roi

15 total tenants

200 feet of frontage on East Main Street

5.55 parking spaces per per 1,000 square feet

East Patchogue Incentive Overlay District

The Property falls within the new rezoning of the East Main Street Corridor in East Patchogue, which rezones the Property for mixed-use development.

more than 50% of the current tenant base are on MTM leases

This will generate immediate upside by bringing these rents up to market.

3 developments are already in process within a 4 block radius

RXR is building a 91-unit Greybarn development, and there are two other luxury new developments being built down the block by G4 and NRP.
These new developments will bring more people to the area and will increase consumer spending, driving more traffic to the retail at our Property.

HALF A MILE FROM THE VILLAGE OF PATCHOGUE’S CBD

The half mile between the Property and Downtown Patchogue is currently undergoing revitalization, as a new Family Dollar, Domino’s, and gym have all opened up within the past year along the strip.

Investment Summary

OVERVIEW

AVGI has partnered with Hildreth Real Estate Advisors (HREA) to acquire 350 East Main Street in East Patchogue, NY, a 27,338 square foot retail strip center on one of the most high traffic corridors in Suffolk County, NY (the “Property”). This is an off-market transaction that is being acquired from a family that has owned the asset for 22 years. The submarket is currently experiencing a significant amount of multifamily construction, with more than 200 apartments being built over the next few years within a 2 block vicinity of the Property.

THE BUSINESS PLAN

AVGI and HREA plan to bring the current tenants’ income to market after performing light renovations that enhance curb appeal to prospective tenants. Further, AVGI and HREA will work on getting approvals to build a 75,000 square foot mixed-use community as of right on the parcel, allowing our investors to earn cash flow while we get approvals and see a significant increase to the value of the property once approved.

ABOUT AVGI

OVERVIEW

AVGI is a real estate investment firm that purchases opportunistic assets in New York as well as secondary and tertiary markets throughout the United States. The firm currently has $70 million of real estate holdings across 6 markets – Long Island, NYC, Houston, Little Rock, St. Louis, and Binghamton. AVGI uses proprietary sourcing methods that result in acquiring assets at a basis significantly below market value. This approach, along with streamlining management inefficiencies, provides investors with above-average risk-adjusted returns.

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Markets

UNDERSTANDING THE MARKET

East Patchogue Incentive Overlay District

location

The East Patchogue Incentive Overlay District is a rezoning completed by Suffolk County and the Town of Brookhaven for a half mile radius along East Main Street between County Road 112 and Washington Avenue.

opportunity

The rezoning calls for a change of use to allow multifamily and mixed-use communities to be built on these parcels, which mostly consist of vacant lots and shuttered retail.

upside

With the rezoning, AVGI and HREA can build more than 75,000 square feet of mixed-use on the site as of right, or 60 apartments and 30,000 square feet of retail.

UNDERSTANDING THE MARKET

suffolk county

population growth

population of Suffolk county

STRIP CENTER MARKET

average rent for strip centers in suffolk county

UNDERSTANDING THE MARKET

suffolk county

unemployment rate

population of Suffolk county

STRIP CENTER MARKET

average rent for strip centers in suffolk county

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Timeline

Example Investment Timeline

Amount Invested: $100,000

Day 1
Invest $100,000

Invest your capital into the deal.

~90 Days Later (Month 3)
Receive your first distribution

At the end of the first quarter, you will receive your first distribution, which will be your proportionate share of the cash flow available to distribute.

Month 1-60
We execute. You Collect.

AVGI and HREA will be getting approvals to build, and working with tenants to raise rents and increase demand for the property. All the while you'll be receiving your quarterly checks.

Month 60
Receive your capital back and more on the sale.

We underwrote the property to sell at a price of $175 per buildable square foot in 5 years, well below the comparable sale on Main Street that sold this past year for $195 per buildable square foot. This sale will return your capital back, your 8% accrued return, plus 70% of the remaining profits for a total annualized ROI of 20.88%.

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