by Robert Kantor

Recently, Headwater Capital announced the acquisition of Barrington Town Center for $13.1 million. Located in Aurora, Ohio, Barrington is one of the most compelling commercial real estate investments we have experienced. Barrington exemplifies an ideal commercial investment opportunity with outstanding fundamentals — superior demographics, and an intrinsic value in excess of the acquisition price. Barrington is projected to provide our investors with an average cash flow exceeding 9 percent per year over 10 years, with an IRR of 12-14 percent.

Barrington is a blue print of an ideal Headwater investment — commercial real estate that is demographically secure for its use and which generates substantial cash flow on a predictable basis, over a long term. Here are some of the reasons why:

• • The purchase price was 92% of the property value, reflecting a strong intrinsic value of the asset considering its age and its potential to provide essential goods and services to the community in which it is located.
  • More than 40% of annual distributions will be shielded by depreciation from current income tax.
  • The location, Aurora, is an affluent, upscale (average household income exceeds $130,000) commuter suburb conveniently located between the Cleveland and Akron major metropolitan areas. Barrington is surrounded by a nationally ranked, top public school system; the exclusive Barrington Golf Club, featuring its championship Signature Jack Nicklaus golf course, and the luxurious Barrington Estates residential community.

• • The 112,631 square-foot Barrington Town Center is the dominant grocery shadow-anchored retail center located in Aurora and is surrounded by premier real estate. It is complimented by well-known tenants: Heinen’s Grocery (22 Locations in Ohio & Illinois), Huntington Bank, CVS Pharmacy, Walgreens, Wendy’s and others.

• • The 97 percent occupied center has a tremendous mix of national, regional and local tenants with constant flurry of activity due to high traffic generating tenants, and easy highway access to I-480 (Route to I-80, Ohio Turnpike).

• • The property is afforded unbeatable access from three main roadways in high barrier to entry market: limited grocery competition (5+ miles to next closest conventional grocery stores).

• • The loan is a 30-year amortized loan after two years of interest only, non-recourse, and approximately 65% of the total value of acquisition; the modest debt-to-equity financing further reduces the risk of the transaction.

• • Barrington Town Center has the potential for future growth and increased income generation to insure the asset keeps up with inflation over any holding period. Again, Barrington is projected to provide our investors with an average cash flow exceeding 9 percent per year over 10 years, with an IRR of 12-14 percent.

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To learn more about the possibility of earning long-term, reliable cash flow with Headwater Capital, contact me at RAKantor@HeadwaterCapital.com or call 855-208-7551