Fwd: CROSSROAD CAPITAL PARTNERS- U.S. Government Properties Income & Growth Fund, L.P.

From: "Joe Sindelar" <jsindelar@xroadcapital.com>
Date: December 9, 2010 10:03:14 AM EST
To: <wmcnally@mcnallycapital.com>
Subject: CROSSROAD CAPITAL PARTNERS- U.S. Government Properties Income & Growth Fund, L.P.   

Ward,

We are beginning to work with PRP on their GSA properties fund.  Attached is the summary presentation for your review.  Please let me know if you would like to take a closer look at this opportunity.

Thank you.

 

PRP Real Estate Investment Management is raising a $400 million private equity real estate fund, U.S. Government Properties Income & Growth Fund, L.P., to make investments in Government Services Administration (“GSA”) managed properties.  The Fund’s aggregate $1 billion portfolio will be made up of modern Class A office assets 100% leased by the GSA and other U.S. federal agencies.  GSA property investments should provide investors with the benefit of the U.S. governments AAA credit rating while seeking a 7% current yield and 12-14% gross levered IRR. 

 

Investment Team

PRP’s core management team will utilize its decades-long relationships in the GSA community, an area in which the team has conducted business over the last 20 years.  The depth of the team is unmatched in this sector and includes Managing Director Joe Moravec the Public Buildings Service Commissioner for the GSA managing more than 8,000 properties from 2001-2005 and Tom Zarrilli who has managed approximately $4 billion of GSA credit tenant lease loans.

 

In addition to its proprietary deal flow the team has extensive personal relationships within the GSA development, finance and leasing community.  The sector’s long and complicated procurement process, among other barriers to entry, requires firsthand knowledge and expertise. The team is well positioned to utilize their experience and expertise to overcome these obstacles.  

 

Investment Highlights

PRP’s primary goal is to make defensive low volatility investments in GSA real estate assets whose leases are backed by the full faith and credit of the U.S. government.  The Fund will invest 40% of LP commitments in properties with 15-20 year lease durations that are expected to provide current income and a high cash-on-cash yield.  The remaining 60% of LP commitments will be allocated to properties with lease durations of 5-10 years where, in addition to current income leases, expirations during the hold period will produce increased rent renewals.  These investments represent a defensive alternative to the core real estate asset class by providing durable cash flows, stable returns and 90%+ historical renewal rates.  

 

Market Opportunity

Income returns on GSA-leased office properties have steadily outperformed the NCREIF office index.  The GSA lease structure and high probability for lease renewals are ideal for long term investors seeking current income.  Additionally, GSA leased assets have lower volatility than traditional office realty markets, provide a hedge against inflation, eliminate tenant credit risk and offer higher risk-adjusted rates of return.

 

Fund Raising Status

The Fund has held its first close and has completed four fund investments.   

 

 

Joe

Joseph Sindelar, CFA, CAIA
Crossroad Capital Partners LLC
203-658-0141(direct)
917-855-4642 (mobile)

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