Commercial USA is the commercial property division of Isle of Crete Developments dealing with investment projects outside of Greece with a focus on value-added investments in commercial real estate, mainly in the US market.
We focus mainly on high-yield B grade industrial properties with long-term (10 to 25 years) secure NNN leases from high-end prime tenants with low maintenance costs in the $10 million to $25 million price range.
Our main goal is to create added value at the initial stages of acquisition. We achieve this by focusing on “Sale Leaseback” properties. Sale with a Leaseback involves the current owner of the property being a blue chip company/organization and who previously occupied the property with a long lease history. This current business and property owner then either decides sell the property and divest as a way to raise capital or the company decides to make a change in their policy to focus on business expansion rather than property ownership. In a sale-leaseback, the current owner/business decides to remain in the property as a long-term tenant for a long period of time and enters into a long-term lease as part of the sale process to do so.
This strategy adds significant post-acquisition value to the property for the new buyer due to the difference in bank valuation between the purchase price before settlement and the bank valuation obtained after settlement with the NNN long-term lease.
After completion of the settlement and acquisition, we aim to realize the value-add through bank revaluation. The entire process can be completed in less than 12 months from the settlement of the acquisition.
Once the value-add on the property has been implemented, realized and finalized, the strategy is to refinance the property and redeem capital from the property through a loan that is much larger than the initial capital input required at the beginning of the acquisition phase. The property can then be refinanced up to 60% or more of the new bank valuation with additional added value.
The funds redeemed can then be used to repeat the strategy and process when acquiring new properties. It is a value-add strategy for equity growth. Using this strategy, there are no emotions associated with the decision to buy a particular property. The relevance to the location of the property and the aesthetics of property also becomes less significant.
We bring together different syndicate members to work with us on particular commercial property deals. The syndicator of the consortium will be Isle of Crete Developments IKE. We seek joint venture partners to join us as joint syndicators. Our proposed joint ventures will see the joint venture partner work with Isle of Crete Developments IKE as joint syndicator.
Isle of Crete Developments’ main role as syndicator is to acquire all the properties, negotiate the property, execute the acquisition, and then extract the value-add from the property. The syndicator’s role is also to report to all other syndicate members on an ongoing basis all progress from start to finish until the entire acquisition process and value-add extraction are completed.
The joint venture partner / joint venture syndicator may also have the option in assisting with arranging the remaining consortium members/participant investors required to fund the rest of the capital to acquire the commercial property.
The advantage to both joint venture syndicators and syndicate members is the high return on investment (ROI) and internal rate of return (IRR), as well as the high cash-on-cash that the property will return after value-add has been implemented, that will benefit all members of the consortium..
The main activity of Isle of Crete Developments is to develop and deliver high quality Hotel and Villa Resort Tourism projects and creating community living in Crete.
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