SMARTCAP Industrial Value Fund 3

A value-add fund targeting strategic industrial properties in the greater Pacific Northwest with a primary focus on the Seattle & Portland MSA.


SMARTCAP Industrial Value Fund 3

A value-add fund targeting strategic industrial properties in the greater Pacific Northwest with a primary focus on the Seattle & Portland MSA.

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Targeted Investor IRR: 20%
Targeted Equity Multiple: 2.0x - 2.5x
Targeted Stabilized Cash Yield: 8.0%
Targeted Investment Period: 5-7 years
Minimum Investment: $25,000
Property Type: 100% Industrial
Investment Profile: Value-Add
Distribution Commencement: January 1st, 2022
Offers Due: December 31st, 2021
Funds Due: December 31st, 2021
Targeted Project Level IRR: 20%
Sponsor Co-Investment: 5% Targeted Co-Investment




Offering Summary


SMARTCAP Investor Share in Institutional Profits

  • Targeting 20%-25% or higher IRR paid to investors (net of fees).
  • Private Fund investors share in 50% of profits from institutional joint-venture partnerships.
  • SMARTCAP and investors are aligned as SMARTCAP provides profits from institutional equity stack to increase investors returns.

Higher-Quality Assets

  • By utilizing institutional equity to increase SMARTCAP investor returns, you experience reduced risk and an increase in asset quality.
  • Higher-quality assets provide greater growth potential with lower vacancy risk.

Improved Diversification

  • The additional institutional equity will allow SMARTCAP investors to invest in a highly-diversified fund.
  • Access to multiple deals inside a fund provides a risk-adjusted investment platform that outproduced single-deal investment strategies.
  • Focus on industrial assets, though office assets will be considered on a limited and opportunistic basis as the office market continues to recover.

SMARTCAP CRE - Investment Approach


Thesis

  • We acquire and own functional, flexible industrial assets in infill and growth-oriented locations.
  • We allow for a mix of Core, Value, Opportunistic, and Development investments.
  • We acquire in top-tier markets, at or below replacement cost.
  • We will analyze office assets on an opportunistic basis or as the office market recovers.

Operating Approach

  • Increased cash-on-cash return, and net asset value within the fund.
  • Acquiring and developing in core markets with limited leasing risk drives value while significantly increasing long-term yield.

Tier 1 Markets

  • Focused on markets with a high barrier to entry for new development. Limited supply increases long-term demand.
  • Seattle and Portland metros have consistently outperformed national growth models.
  • Coastal cities with access to deep-water ports decrease risk with reduced vacancy and higher rents.
  • Local sponsor with intimate knowledge and a strong reputation, have a key advantage over our competitors in our target markets.

SMARTCAP Advantage


We have the expertise, resources, and connections you need to break into the industrial market.

Discover more of what sets our company apart in the Seattle and Portland markets.

100% FOCUS ON LOCAL MARKETS

Our local focus and expertise gives us a competitive advantage over other investing firms in the Seattle and Portland markets.

HIGHEST DEGREE OF LOCAL KNOWLEDGE

You can trust in our inside insight generated from years of successful purchasing to acquire only income-producing assets that outperform time and time again.

SUPERIOR MARKET ANALYSIS

Our research capability and expertise work synergistically to support our acquisitions phase.

BEST BROKERAGE RELATIONSHIP

Our connection with local brokers allows us to acquire off-market opportunities ahead of the competition—leading to better returns for investors.

DATA DRIVEN

We only move in the market when our decisions are backed by hard data and research to ensure we're bringing the best industrial value-add to our investors.

SMARTCAP Historical Track Record


Industrial Properties Investment Strategy


Focus on Top Tier Markets – Primary Targets Include Seattle & Portland

Supply of new industrial product is limited due to physical and regulatory constraints. When combined with strong demand, and generators such as population growth, and proximity to ports, the Seattle and Portland markets have continually generated superior returns.

High-Quality Industrial Real Estate

We invest in functional, flexible industrial real estate that meets our customers’ needs. Our target markets are in areas with growing demand and limited supply.

Three-Pronged Strategy

Combining direct acquisitions, ground-up development, and the highest-quality relationships in our markets, we provides great opportunity for portfolio growth and increased investor value.

Middle Market / Local Operator Advantage

SMARTCAP targets middle-market assets in the $5MM - $30MM range where larger institutions are less competitive, and smaller investors cannot buy.

SMARTCAP is a boots-on-the-ground, local operator with top relationships in the market.

Ecommerce Demand projected to be 25% or retail sales by 2030

The Pandemic is further accelerating E-Commerce and the necessity for resilience across the domestic supply chain

  • Ecommerce as a percentage of total retail sales are accelerating. An expected 400 million SF of new logistics warehouses are needed through 2022.
  • Supply chain bottlenecks from the economic shutdown and a spike in e-commerce demand likely to increase inventory-to-sales ratio, subsequently increasing required inventory storage space.
  • Expanded purchase categories notably experiencing a spike in e-commerce adoption (e.g. grocery, furniture).
  • Online returns rate frequently up to 30% of purchases. Post-pandemic trends should expand this already significant driver of modern facility space.
  • 35% of industrial leasing activity was related to e-commerce pre-Covid. This has increased to 50% post-Covid (JLL).
  • Re-shoring of manufacturing to North America should create need for more resources on-hand domestically.

Favorable Tailwinds Support Industrial Demand In Seattle

“Each 100 bps of share shift from bricks and mortar to online translates to 46 MSF of net demand in the U.S.” 

Listen to Will O'Donnell, Director of Prologis Ventures Here.

2020 e-commerce growth of 30%+ suggests that the demand could generate an 140-185 million SQ FT of annual industrial requirements over the next decade.

SMARTCAP Industrial Fund will focus on logistics, multi-market distribution,  last-mile distribution, and manufacturing assets.

A Supply Deficit of Industrial Space in Seattle Will Prop up Prices & Rent

Seattle and Portland are supply-constrained markets, with significant growth, which results in higher rental rates. Rental rates in these markets have cumulatively grown by 12% more than the national average since 2012, and vacancy rates have been consistently lower.

The SMARTCAP Team


SMARTCAP is a direct real estate investment firm operating in the Puget Sound area, one of the top real estate markets in the world. Your risk is minimized by acquiring assets at value-add pricing. Our track record for our entire portfolio is over 23% IRR paid to investors, net of fees and expenses.

Smart, Transparent Real Estate Investment

Investors are our life-blood and appreciate our detailed monthly communication and financial reporting. Your questions are answered quickly and with honesty and transparency. You will receive monthly updates, including detailed property summaries and financial reporting, as well as monthly distributions.