The three reasons this asset cleared the doctrine, before a dollar is committed.
The dominant daily-needs strip center on Chillicothe's primary retail corridor (US-65), fully leased to a ten-tenant necessity roster anchored by NAPA Auto Parts, Dollar Tree, and Maurices. The three anchors carry roughly 60% of rent on leases running to 2029-2031 with options beyond, and the center was renovated in 2025.
Bought at $77/SF, well below replacement cost, at a ~9.1% cap on in-place income, with seller financing negotiated directly: a fixed-rate, interest-only note carried by the seller, with roughly 2.5x debt-service coverage from day one. The county assessor has confirmed in writing that property taxes do not reset on sale, removing the largest hidden risk in small-market retail underwriting.
The value-add is lease administration, not speculation: five smaller tenants pay gross rent today, and each converts to triple-net at its scheduled renewal inside the hold, the two largest in 2028, shifting taxes, insurance, and CAM to tenants where the market already prices them. Exit target is year five as a cleaner, majority-NNN center.
10 tenants, 100% occupancy, anchored by NAPA · Dollar Tree · Maurices.
| Tenant | Type | Sq ft | % NOI | Lease end | Options |
|---|---|---|---|---|---|
| NAPA Auto Parts | Necessity · national | 12,390 | 23% | 2030 | options to 2045 |
| Dollar Tree | Necessity · national | 7,752 | 25% | 2031 | options to 2046 |
| Maurices | Apparel · national | 6,572 | 12% | 2029 | below-market rent |
| Vaper Maven | Specialty · local | 2,824 | 11% | 2028 | NNN |
| Allied / Flex Staffing | Service · regional | 2,366 | 8% | 2028 | gross → NNN at renewal |
| Chillicothe Pharmacy | Health · local | 2,774 | 8% | 2028 | gross → NNN · options to 2034 |
| Subway | F&B · national franchisee | 1,573 | 3% | 2028 | NNN |
| Better Way | Service · local | 1,540 | 4% | 2031 | gross → NNN at renewal |
| Army Recruiting (GSA) | Government | 793 | 5% | 2027 | renewal in diligence |
| Management office | Office · local | 920 | 2% | 2030 | gross → NNN at renewal |
Modeled on verified in-place income, not stabilized pro-forma. Cash flow to equity is net of seller-carried debt service.
| Y1 | Y2 | Y3 | Y4 | Y5 (exit) | |
|---|---|---|---|---|---|
| Effective gross income | $367,986 | $375,581 | $383,334 | $391,250 | $399,332 |
| NOI | $276,533 | $281,922 | $287,415 | $293,017 | $298,728 |
| Debt service, reserves & admin | ($117,625) | ($118,125) | ($118,638) | ($119,163) | ($119,701) |
| Cash flow to equity | $158,908 | $163,797 | $168,778 | $173,854 | $179,027 |
| Cash-on-cash | 9.6% | 9.9% | 10.2% | 10.5% | 10.8% |
Financed directly by the seller, no bank, no floating rate. Stoneforge co-invests 5% of the equity on identical terms to investors.
| Seller-carried financing · fixed, interest-only | $1,750,000 | 51.3% |
| LP equity (95% of equity) | $1,577,643 | 46.3% |
| GP co-invest (5% of equity) | $83,034 | 2.4% |
| TOTAL CAPITALIZATION | $3,410,677 | 100% |
| Property acquisition, closing & diligence | $3,174,250 | 93.1% |
| Operating reserve | $40,000 | 1.2% |
| Sponsor fees (acquisition & structuring) | $196,427 | 5.8% |
| TOTAL | $3,410,677 | 100% |
Where the deal still pencils, and where it stops. The base case sits in the middle, not at the edge.
| NOI growth ↓ / Exit cap → | 7.50% | 8.00% | 8.25% | 8.60% | 9.00% |
|---|---|---|---|---|---|
| +2.5%/yr | 15.6% | 13.6% | 12.6% | 11.2% | 9.7% |
| +2.0%/yr | 14.7% | 12.6% | 11.6% | 10.2% | 8.7% |
| +1.5%/yr | 13.7% | 11.6% | 10.6% | 9.2% | 7.6% |
| +1.0%/yr | 12.7% | 10.6% | 9.5% | 8.1% | 6.5% |
| +0.5%/yr | 11.7% | 9.5% | 8.5% | 7.0% | 5.4% |
Where the deal stands today, and the path to close. Every step recorded, every document on file.
Memo, model, OA, sub docs, third-party reports, current rent roll. Updated monthly post-close.
We'll send the current portfolio brief, a sample deal memo, and an invite to the next quarterly investor call.