Property Summary

ESSENTIAL INFORMATION

Sentinel Net Lease, LLC (“Sentinel”) acquired the Hilton Grand Vacations (“HGV”) operations center in Orlando, FL. The property, comprised of two Class A office buildings totaling 133,914-square-feet situated on 15 acres, is in the desirable MetroWest master-planned community.

  • Status CLOSED
  • Area 133,914 Square Footage
  • Location Orlando, FL
  • Type Operations Center
  • Strategy Opportunistic Institutional

Description

The property includes the long-term commitment of Hilton Resorts Corporation (lessee) with 5 years of remaining lease term with attractive rent escalations that provide stable, inflation-protected cash flows backed by a credit-rated tenant. The property has been home to HGV dating back to 1992 (30 years) with a long history of renewals, expansions and investment in the buildings. This acquisition is consistent with Sentinel’s strategy to acquire attractive real estate secured by long-term net leases with financially stable tenants that generate above-average risk-adjusted returns.

Strategically located in Orlando’s hub for leisure, hospitality and conventions in South Orlando, the campus is surrounded by growth in the industry with more than $5 billion of capital investment currently underway.

Our business plan is to generate strong monthly cash flow from the existing in-place lease and “blend and extend” the lease into a longer-term commitment from HGV once they are near the end of their lease term in 2026. Sentinel plans to offer a combination of financial concessions as an incentive for HGV to extend the current lease for 10 years in lieu of the 5-year extension option currently in place. Assuming HGV agrees to a new lease, Sentinel would seek to sell the property if market conditions are favorable.

Key Metrics

  • Purchase Price: $24,500,000
  • Net Rentable SF: 133,914
  • Projected Investment Period : 5 Years
  • Year 1 Cap Rate: 7.6%
  • Projected Yr 1 Cash-on-Cash Return: 12.4%
  • Projected Net Return on Equity: 1.8x
  • Projected Net IRR: 17.1%

Essential Information

  • Publicly-traded, credit-rated tenant with a market cap of $5.8 billion

  • Long-term lease and annual rent increases provide predictable income

  • High quality buildings with substantial tenant paid improvements

  • Located in the one of the most desirable sub-markets in Orlando

  • Proximate to numerous commercial and recreational amenities

  • 625 parking spaces on-site + 200 off-site (6.2 parking ratio)

Location

Address

1800 MetroCenter Blvd, Orlando, FL 32835