Property Summary

ESSENTIAL INFORMATION

Sentinel Net Lease, LLC (“Sentinel”) is acquiring One Renner Ridge (“ORR”), a two-tenant Class A office building in Lenexa, Kansas, in the Kansas City metro area.

  • Status CLOSED
  • Area 118,563 Square Footage
  • Location Kansas City, KS
  • Type Stabilized Class A Office Building
  • Strategy Core Credit-Rated

Description

Sentinel Net Lease, LLC (“Sentinel”) acquired One Renner Ridge (“ORR”), a two-tenant Class A office building in Lenexa, Kansas, in the Kansas City metro area. The property, totaling 118,563 square feet, is situated on 8 acres in the desirable South Johnson County submarket. One Renner Ridge is 100% leased (with historical occupancy of 97.7% over 20 years) with 8.5 years of weighted average lease term remaining in Kansas City’s strongest suburban market, offering a dependable and growing income stream. The tenants are TouchPoint/Global Systems, a credit-rated Fortune 500 company, and GBA, a regional engineering and design firm with $75MM in annual revenue and a shadow credit rating of BB+. 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. Our attractive acquisition basis was recently confirmed by our lender’s third-party appraisal, which valued the property at $25.6MM, a full $3MM (nearly 15%) above our purchase price of $22.6MM.

Access to the Property is superb, as evidenced by ease of ingress and egress to and from Interstates I-435, I-35, and Highway K-10. Additionally, local market demographics are healthy and the property is near a number of commercial services and recreational amenities.

Our business plan is to generate strong monthly cash flow from the existing in-place lease and “blend and extend” the leases into a longer-term commitment from GBA and TouchNet/GlobalPayments. Sentinel plans to offer a combination of financial concessions as an incentive for the tenants to extend the current lease for 10 years in lieu of the extension options currently in place. Assuming the tenants agree to a new lease, Sentinel would seek to sell the property if market conditions are favorable.

Key Metrics

  • Purchase Price: $22,612,000
  • Appraisal Value: $25,600,000
  • Net Rentable SF: 118,371
  • Projected Investment Period : 6.5 Years
  • Year 1 Cap Rate: 7.5%
  • Projected Yr 1 Cash-on-Cash Return: 11%
  • Projected Net Return on Equity: 2.1x
  • Projected Net IRR: 17%

Essential Information

  • Fortune 500 and large engineering firm occupy 100% of the building

  • Long-term leases and annual rent bumps provide predictable income

  • High quality building with substantial tenant improvements

  • Located in a very desirable sub-market of Kansas City

  • Proximate to numerous commercial and recreational amenities

  • 514 parking spaces on-site (4.3 parking ratio)

Location

Address

9801 Renner Boulevard, Lenexa, KS 66219