The real estate investments with the highest yields also require the highest focus, timing, attention to detail and creativity. Knowing exactly what tenants want and delivering it, is precisely what led RubiGroup Capital to these two investments- first San Juan Corners and then Las Palmas Development.
In this real estate investment case study, RubiGroup Capital initially began with a $1M cash investment in 2012 and a national tenant in tow. We had a specific task of finding the perfect location for a national telecommunication service provider and we did. The tenant and the equity investment combined with a $1.8M loan from a regional bank allowed us to develop a 20,000 SF retail center; we quickly filled it and then performed a 1031 exchange valued in excess of $5M over a period of 2 years. The IRR for the first leg of the investment exceeded 100%.
The second investment was the 2015 purchase (via 1031 exchange of the retail center above) of a fully functioning national flag hotel in Brownsville TX. The hotel was closed down, demolished and converted into 6 commercial lots. There are 4 restaurant pads and 2 multi-tenant building sites in the development. What drove this specific investment was having the Olive Garden restaurant ready to go as soon as the property was available. This was the key to the overall project- just one lease. By seeing beyond a functioning hotel and visualizing a 10-acre, high-traffic retail development, RubiGroup Capital was able to place the Olive Garden into a spot they had been searching for for over 20 years. Today, that lease on one of the six pads is valued at more than the original purchase price. With a total project value in excess of $18M, the current IRR for this development exceeds 70% and provides the flexibility of having 6 separate properties to now use for further investment options.
In summary, RubiGroup Capital took $1M in cash and, over the course of 6 years, converted it into over $18M in value. This takes significant focus, daily management and a very creative approach to real estate development. We do this every day. Stay tuned for more case studies!