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This example allows you to quantify your expected returns, and to compare your opportunity cost of capital compared to other investments using an average deal that passes across our desk.  (Please note:  this is not a deal that Prescient invested in, is not an offer to invest in this property, and is only given as an illustrative example.)  This property is a 32,000 square foot stand-alone grocery store occupied by Wild Oats Natural Food Market (owner of grocery stores such as Nature's in Portland, Oregon) on a twenty year lease and uses the following assumptions:  $4,500,000 purchase price based upon a 9.5% going in capitalization rate; a 7% fixed rate mortgage amortized over thirty years due in ten years; 9.5% reversion capitalization rate; $435,000 annual net operating income for the first 10 years with a fixed rental increase for the next ten years that results in a $515,000 annual NOI for years eleven through twenty; 75% loan-to-value; 25% equity or $1,125,000 equity investment; and loan and associated acquisition fees of $100,000.

This example offers the following investor benefits and returns:

1)  Strong annual potential cash returns to investors of around $140,000 per year for years 1-10 from a high-quality tenant.

2)  Purchase of a new, high-quality facility.

3)  Fixed borrowing rate that eliminates interest rate risk.

4)  Investment of approximately $1.1 yields a strong ROE of 13.3% and a ROA of 16.3% on a relatively low risk investment.

5)  Capital appreciation results in a likely net profit distribution of $1.2 from sale in Year 10.

For more information, contact Scott Pozzi at Prescient Venture Partners, LLC (503) 226-9400.