Analyzing the Offering Memorandum for the Friars Flex Deal

Key Takeaways:

Flex Space Advantages:

More versatile than multi-family real estate

Allows for diverse tenant mix

Easier to lease smaller suites quickly

More logical and less emotional tenant interactions

Investment Strategy:

Buy properties that can be easily modified

Focus on value-add opportunities

Aim for full occupancy and market-rate rents

Target properties with flexible layout options

Financial Approach:

Invest in properties with potential for double-digit returns

Prefer 7% preferred return for investors

70/30 profit split between investors and general partners

Carefully manage capital improvements and operating expenses

Maintenance and Leasing:

Prioritize clean, functional spaces over aesthetic upgrades

Work collaboratively with tenants on maintenance

Seek longer-term leases to increase property value

Focus on efficient space utilization

Deal Specifics (Friars Crossing):

100,000 square foot flex space in Chattanooga

Purchased for just over $10 million

Currently 91% occupied

Goal to fully occupy within 12 months and achieve market rents