1329 BOSTON POST ROAD is a 6,500 square foot freestanding retail building on a one-half acre site with parking for 15 cars located on Boston Post Road, U.S. Route 1, in the affluent suburb of Mamaroneck.  It was purchased in September 1996 for $1.08 million.  Total project cost was $1.28 million.  It was sold in July 2004 for $2.85 million.

.Market Opportunity
The property is located on an extremely desirable, high volume retail street in an area in which retail properties rarely change hands.  It had been owned for over 25 years by a local family, which operated a retail store on the premises.  After the founder of the store retired, the business rapidly deteriorated and closed approximately two years before CCGL’s predecessor company purchased the building.  Failure of the business left the owner in financial distress and the mortgage in default.  To permit re-leasing the building and cure the mortgage default, the owner entered into a high interest “hard money” mortgage.  Approximately two years later, the new tenant filed for bankruptcy and vacated the store, leaving the owner facing personal bankruptcy.

.Acquisition
CCGL’s predecessor company learned about the property only days after the tenant vacated and agreed to buy the property only days later, before a broad marketing effort could be organized.  The property was vacant and in need of renovation at acquisition, but CCGL’s predecessor company believed it could be leased at a premium rent to a national tenant, given appropriate renovation and professional marketing.

.Results
Within nine months after acquisition, CCGL’s predecessor company leased the property to Pier 1 Imports, a national furniture chain.  Pier 1 invested a substantial amount in further improving the property and reported well above-average sales levels and growth.  The property was refinanced with a long-term, fixed rate mortgage, which generated excess proceeds.  CCGL’s predecessor company was approached to sell the property and negotiated a favorable price of over $400 per square foot.  The sale closed in July 2004. 

The building was owned by 1329 Boston Post Road, LLC, a single property entity.  The effective annual internal rate of return to the investors was in excess of 15%, net after all fees and carried interest to CCGL’s predecessor company and its affiliates.