.png)
Industrial Fund III
Debuting in the summer of 2024, Fund III will represent both a continuation and evolution of MAG Capital's successful approach to US-based industrial private equity investments. The driving focus will be on immediate cash flow and long-term net leases.
Why Industrial? Why Now?
KEY DRIVERS FOR FUND III OPPORTUNITY
Stable Asset Class
Active Lending Environment
Securituzed Cash Flow Yields
Capture Value through Market Ineffeciencies
INDUSTRIAL DEMAND DRIVERS
Onshoring and reshoring manufacturing to the U.S. and Mexico is an ongoing structural change.
-
The global supply chain disruption of 2020 revealed a clear need for domestic logistics and manufacturing, leading to significant public and private investment into this sector.
-
2nd generation industrial real estate is priced below replacement costs, and space demand is outstripping constrained supply into the foreseeable future
IMMEDIATE BUYING OPPORTUNITIES
Onshoring and reshoring manufacturing to the U.S. and Mexico is an ongoing structural change.
-
Acquisition cap rates remain higher than capital costs
-
Opportunity to acquire quality assets at or below replacement costs with positive leverage and healthy yield spreads
-
Fixed rate debt remains available at 150-200 bps below acquisition cap rates
Fund III Overview
INVESTMENT CLASSSES AND CHANNELS
MAGCP Industrial Funds I & II
SNAPSHOT KPIs AND PERFORMANCE
Our Partner
Founded in 2015, MAG Capital Partners is a commercial real estate investment firm focused on single-tenant, net leased industrial properties throughout the United States. MAG specializes in sale-leaseback structured industrial acquisitions and value-add opportunities. The firm is led by tenured principals Dax T.S. Mitchell, Andrew Gi and Neil Wahlgren, having over 60 years of combined experience in complex commercial real estate acquisitions, operations and development with attractive results. MAGCP is vertically integrated, including tenant credit advisory, construction and facilities management, asset management, capital markets, and a full-service accounting team.
$150M+
<0.2%
$1B+
18.1%
ASSETS UNDER MANAGEMENT
ANNUAL TENANT DEFAULT RATE
REALIZED INVESTMENT EXIT
REALIZED NET INVESTMENT IRR
Download MAG Capital Industrial Fund III Offer Memorandum
Case Studies
Gamma Aerospace (2018)
Mansfield Texas
Tenant
Gamma Aerospace, founded in 1971, is an aerospace manufacturing facility located in Dallas-Fort Worth supplying Tier-1 firms including Boeing, Airbus, Lockheed, L-3 and Bell.
Acquisition
Gamma Aerospace was acquired by private equity firm Ashland Capital. Ashland and MAGCP executed a sale leaseback of real estate in Mansfield, TX, deploying proceeds into capital improvements at the site and operating company
Initial investment
-
123,000 SF – Single Asset
-
Original Capitalization: $5,900,000
-
Expansion: $4,300,000
-
Equity : $1,350,000
-
Real Estate Debt: $8,850,000 (original and construction)
Cash on Cash
LP annual cash-on-cash began at 8%, increasing to 10% through annual rent escalations.
Value Add
After acquiring the real estate in a sale leaseback, MAGCP financed and constructed a 23,000 SF expansion of the manufacturing facility. Upon completion of construction, the lease was extended to a new 20-year term.
Exit + Returns (2022)
Exit: Gamma sold to large Fund after approximately 4 years. Returns: Investors achieved average annual returns of 18%, exceeding targeted returns of 16% by 200 basis points.
Lease
-
15-year, absolute NNN lease with 2% annual rent increases
-
23K SF expansion, fresh 20-year lease extension upon completion
Investment Risk Mitigation
Overall Tenant Credit
Unit Profitability
Defensible Real Estate
-
Evaluate tenant’s long term financial profile
-
Overall financial health
-
Tenant access to capital
-
Avoid highly vulnerable companies
-
Review business unit-level financials for all target properties
-
Profitable locations
-
Mission-critical tenant operations
-
Tenant investments into properties
-
Real estate acquisition basis below replacement value
-
Limit downside scenarios (bankruptcy, liquidation, lease rejection)
-
Value Floor – Purchase near value of property if it becomes vacant
Cash Flow Projection
CUMMULATIVE FUND III PROJECTED NET DISTRIBUTIONS
Projected Investment Lifecycle
1
Roll Up + Acquisition
Acquisition of Industrial Assets
2
Compounding + Management
Annual cash-flow
escalations
3
Active Lending Environment
Sale and return of
capital and profits
YEARS: 0 - 1
-
$250M of equity invested
-
$500M-$700M of leveraged assets
-
Immediate distributions
YEARS: 1 - 5
-
Escalating cash flow from leases
-
Debt principal pay-down
-
Value-add opportunities
YEARS: 5 - 6
-
Exit of properties
-
Individual or portfolio sales
-
Manager discretion on market timing
Exit Strategies
FLEXIBLY PURSUING PROFITABLE EXITS
Ready to Soft Commit?
Are you ready to take the next step? Schedule a time that works for you using my Calendly below. Looking forward to connecting!
Still have questions?
Your time is precious and you just have a brief question. Send us a message and we’ll get back to you with an answer.
LEARN MORE
DISCUSS IN PERSON
HOW IT WORKS
Speak to Clive Capital today about investing in a current or future property.
See how investing in real estate can help you meet your financial goals.
Learn our approach to real estate investing and how you make money.