Commercial Real Estate
Customized supplemental portfolios that are expected to generate non-correlated revenue streams and when combined with a client’s existing traditional stock & bond portfolio, results in an asset allocation that better aligns with the Sundial Dynamic All-Weather Portfolio approach.
The Approach
Sundial Real Estate partners offers clients the ability to participate in carefully selected commercial real estate syndications. Sundial has joint venture relationships with a select group of sponsors, each with a laser focus on a specific property type: Class B multi-family; self-storage; industrial, short-term rentals.Commercial real estate ownership provides many advantages including significant cashflow generation, tax benefits through depreciation, and an ability to help protect against an inflationary environment through the potential of property appreciation and raising rents.Every commercial real estate deal is unique and Sundial Real Estate Partners applies the firm’s overriding principles of minimizing risk of loss and identifying and capturing the potential for asymmetric gains.
Case Study: Self-Storage Conversion in Haverhill, MA
Sundial Real Estate Partners participated in the purchase a 93,000 sf building in the suburbs of Boston, MA. The Property consists of 10.4 acres.
The existing building is being converted to self-storage, however there are multiple additional value adds to the project beyond bringing self-storage which is in high demand.
The Property includes excess land equal to approximately 6.85 acres that is not required for the self-storage business, this includes 2.94 acres of retail land located at the front of the Property and 3.91 acres that can possibly be entitled for single or multi-family residential use along the Merrimack River connecting to Riverside Avenue on the east. This provides the project with a lot of additional optionality.
The property has been vacant for 3 years, and the previous owner was a family that had a large portfolio of real estate and had no interest in the work required to redevelop the property. The combined purchase price plus costs of conversion to self-storage was far below the cost to develop a new self-storage facility, minimizing the downside risk in the project. Additionally, the large optionality of selling or developing the excess land that was included In the purchase provides for the potential for asymmetric upside beyond what was modeled in the sponsor’s projections.