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MEDICAL OFFICE

Myrtle Beach, SC

Medical Complex at 82nd Parkway

Medical Office - Myrtle Beach, SC

Highlights

The two-story building is leased to the three original tenants who have occupied the building since it opened in 1998. 72 percent of square footage leased rolls in December 2019, 28 percent rolls in May 2020. Medical tenants traditionally have a higher renewal rate than standard office tenants.

The hospital is a tenant of the property and a subsidiary of Hospital Corporation of America (HCA), the largest publicly-traded for-profit operator of health care facilities in the U.S., rated Ba2 by Moody’s. The hospital last renewed in 2013 at a 10 percent premium to the other tenants.

Although there can be no guaranty, the three tenants have expressed their intent to renew long-term leases due to their long-term investment into the property and proximity to the hospital.

Leases are NN with annual rent increases of (i) 3.0 percent or (ii) CPI with a 2.0 percent floor and 4.0 percent ceiling.

Property Details
Address 945 82nd Parkway Myrtle Beach, SC 29572
Size 2 floors / 44,323 Sq FT
Tenant 3 tenants
Occupancy 100 percent
Lease Types NN (Landlord responsible for roof and exterior structure)
Lease Expirations Dec 2019 and May 2020
Date Acquired May 21, 2014
Appraised Value $15,700,000
Purchase Price $14,535,000
Projected 2016 NOI $1,229,000
Projected IRR1 15.1 percent
Avg. Equity Yield2 11.4percent (7-Year Hold)
Cap Rate 8.1 percent
Leverage $10,300,000
LTV (Orig. PurchasePrice): 70.9 percent

1) Projected IRR - Assumes all 3 tenants will renew their leases upon expiration with 3% annual growth rates, cap ex reserve of $0.15 PSF, TI/LC reserve of $0.36 PSF, 7 year hold period, exit cap rate of 8%, and cost of sale of 4%.
2) Avg. Equity Yield - Computed as average of: net cash flow after TI/LC reserve, asset management fee and debt service divided by initial equity investment of $5,438,115 for each year of hold period.

TILDEN HALL

Brooklyn, NY

Tilden Hall - New York

Tilden Hall - Brooklyn, New York

Asset Summary

The property is a 9-story elevator building with 117 one bedroom and studio apartments comprising 86,360 square feet. The average unit size is 432+/- sq. ft. and each unit has a kitchen, bathroom and other typical apartment necessities. Constructed in 2004, the property was built structurally as a standard apartment building. The property is located in the East Flatbush section of Brooklyn between Lott Street and Veronica Place, southeast of Prospect Park. The area is characterized by typical urban residences, row houses and cottage homes, along the side streets and mostly "mom and pop" retail along the main thoroughfares. The area is well served by public transportation.

Investment Thesis

Given the property's inflation-indexed, long term scheduled rental payments, the REIT believes this asset will contribute to the first objective of it's Dual Strategy; providing the potential for consistent dividend distributions.

There can be no assurances that these investment objectives will be met, and the achievement of any or all goals is not guaranteed.

Property Details
Address 2520 Tilden Avenue - Brooklyn, NY 11226
Size 117 Units / 86,360 Sq FT
Tenant Highland Park Community
Occupancy 100 percent
Lease Types Net Lease
Lease Expirations November 2031
Date Acquired March 29, 2013
Appraised Value $35,300,000
Purchase Price $22,900,000
Projected 2016 NOI $2,500,000
Projected IRR 21.7 percent1
Avg. Equity Yield 14.4 percent (7-Year Hold excluding capital events)
Cap Rate 11.9 percent
Leverage $22,000,000
LTV (Orig. PurchasePrice): 64.4 percent

1) Projected IRR – Rent will increase every 3 years based on cumulative CPI. Assumes annual growth rates of 3%, cap ex reserve of $0.20 PSF, 7 year hold period, exit cap rate of 8% and cost of sale of 3%.
2) Avg. Equity Yield – Computed as average of: net cash flow after debt service divided by initial equity Investment of $9,845,592 for each year of hold period.

MEDICAL OFFICE

Cherry Hill, NJ

7 Carnegie Plaza - Cherry Hill, New Jersey

Medical Office - Cherry Hill, NJ

Highlights

This single-story office building was acquired as a sale-leaseback transaction. Built in 1988 and renovated in 2004 and 2009, the property is located within the local medical office corridor of the affluent suburb of Cherry Hill, NJ, approximately 12 miles outside of downtown Philadelphia.

Founded in 1998 and headquartered at this property, Fox Rehab provides at-home physical, occupational, and speech therapy services. The company targets the aging baby boomer demographic in the eight Eastern U.S. states in which it operates.

Fox Rehab has experienced growth in its customer network as annual therapy visits increased from approximately 180,000 in 2007 to 718,000 in 2013. The company reported net revenues and adjusted EBITDA for year-to-date October 2015 were $85.9 million and $6.2 million, respectively, representing a 15.3% and 129.6% increase over the same period in 2014. The NNN lease has a 15 year term with annual rent increases of greater of 3% or CPI.

Property Details
Address 7 Carnegie Plaza Cherry Hill, NJ 08003
Size 1 floors / 90,080 SQ FT
Tenant Fox Rehabilitation
Occupancy 100 percent
Lease Types NNN
Lease Expirations December 13, 2029
Date Acquired December 16, 2014
Appraised Value $11,600,000
Purchase Price $9,300,000
Projected 2016 NOI $881,680
Projected IRR1 17.7 percent
Avg. Equity Yield2 9.0 percent
Cap Rate 9.15 percent
Leverage $5,500,000
LTV (Orig. PurchasePrice): 59.1 percent

1) Projected IRR - Assumes rent will increase 3% annually, 10 year hold period, exit cap rate of 9%, and cost of sale of 4%.
2) Avg. Equity Yield - Computed as average of: net cash flow after advisor oversight fee and debt service divided by initial equity investment of $4,687,205 for each year of hold period.

AMERICAN AIRLINES

Winston-Salem, NC

799 Hanes Mall BLVD Winston-Salem, North Carolina

American Airlines - Winston-Salem, NC

Highlights

American Airlines has over 1,100 employees at this location which represents its largest call center location on the east coast. The tenant has invested approximately $5.0 million of capital improvements since 2009 and has occupied the building since opening in 1988. The building’s 800+ parking spaces, more than double the standard office parking requirement, meeting the needs of its 24/7, three-shift-per-day workforce.

In October 2015, the American Airlines Group reported a Q3 2015 net profit of $1.9 billion, representing a 54 percent improvement over the same period in 2014 and the highest quarterly profit in the company’s history. American Airlines is rated BB- by S&P.

FCRETI has a 7.1 percent ownership interest in the Delaware Statutory Trust (“DST”) entity that owns the asset.

Property Details
Address 799 Hanes Mall BLVD Winston-Salem, NC 27103
Size 5 stories / 101,555 Sq FT
Tenant American Airlines
Occupancy 100 percent
Lease Types NN (Landlord responsible for roof and exterior structure)
Lease Expirations March 2020 (One 10-Year Renewal Option Remaining)
Date Acquired July 24, 2015
Appraised Value $17,200,000
Purchase Price $16,300,000
Projected 2016 NOI $1,343,000
Projected IRR1 11.1 percent
Avg. Equity Yield2 9.1 percent (10-Year Hold)
Cap Rate 8.1 percent
Leverage $10,000,000
LTV (Orig. PurchasePrice): 61.3 percent

1) Projected IRR - Assumes rent will increase 3% annually, 10 year hold period, exit cap Projected IRR – Rent will increase 3% annually. Assumes tenant renews lease upon expiration with 3% annual rent growth. Includes cap ex reserve of $0.10 PSF per year, TI/LC reserve of $0.50 PSF per year until expiration of current term of lease, 10 year hold period, exit cap rate of 8.75%, and cost of sale of 2%.
2) Avg. Equity Yield – Computed as average of: net cash flow after TI/LC reserve, asset management fee and debt service divided by initial equity investment of $8,562,082 for each year of hold period.

OFFICE BUILDING

Marlton, NJ

402 & 404 Lippincott Drive - Marlton, New Jersey

Single Tenant Office – Marlton, NJ

Highlights

This single-story office building was acquired off-market, direct from seller in 2015. Extensively renovated in 2010, the interior was custom designed by the tenant with high-end, Class A finishes including over $2.8 million invested in tenant improvements. It is located within Marlton Crossing, a 200-acre mixed-use development considered the premier office park in Burlington County, approximately 14 miles outside of downtown Philadelphia.

Founded in 1998 and headquartered at this property, the tenant, Continuum Health Alliance, LLC (“CHA”), provides proven, strategic business and clinical solutions empowering medical providers to enhance patient access and experience, improve health, and lower costs. The company serves over 1,250 primary care physicians, specialists, and nurse practitioners at more than 400 medical offices and hospital locations and manages approximately $1 Billion in annual billings.

FCRETI has a 16.7 percent ownership interest in the DST entity that owns the asset. The NNN lease has 9 years remaining on its existing term with annual rent increases of 2.5 percent to 2.0 percent per annum.

Property Details
Address 402 & 404 Lippincott Dr. Marlton, NJ 08053
Size 2 buildings / 1-story each / 53,100 Sq FT
Tenant Continuum Health Alliance, LLC (CHA)
Occupancy 100 percent
Lease Types NNN
Lease Expirations December 2024
Date Acquired May 15, 2015
Appraised Value $11,800,000
Purchase Price $11,750,000
Projected 2016 NOI $1,115,000
Projected IRR1 10.1 percent
Avg. Equity Yield2 10.0 percent (7-Year Hold)
Cap Rate 9.4 percent
Leverage $6,500,000
LTV (Orig. PurchasePrice): 55.3 percent

1) Projected IRR – Rent will increase $0.50 PSF annually. Assumes a 7 year hold period, exit cap rate of 9.75%, and cost of sale of 2%.
2) Avg. Equity Yield – Computed as average of: net cash flow after TI/LC reserve, asset management fee and debt service divided by initial equity investment of $7,300,000 for each year of hold period.

RAMADA HOTEL

Columbia, SC

Ramada Hotel - Columbia, South Carolina

Ramada Hotel - Columbia, SC

Highlights

This select-service hotel was gut renovated in 2013 by prior ownership and is currently undergoing significant renovations totaling $4.2 million, or approximately $22,000 per key, to complete the rebranding from an independent hotel to a Ramada flag (part of the Wyndham Worldwide brand reservation system). With $850,000 spent to date, the hotel has been officially reflagged Ramada. As of December 2015, approximately onethird of the guest rooms are renovated and returned to inventory.

Amenities include a restaurant and lounge, 8,350 square feet of meeting space, an outdoor pool, a fitness room (planned), an arcade (planned), a business center (planned), a gift shop (planned), a guest laundry room (planned), and vending areas.

As a result of the rebranding, renovations, and new management, revenue has more than doubled in the second half of 2015 compared to the first half of 2015.

Property Details
Address 1539 Horseshoe Dr. Columbia, SC 29223
Number of Rooms 2186 guest rooms
Year Built 1981
Date Acquired September 15, 2015
Appraised Value $8,100,000 (March 2015)
Purchase Price Allocation $6,520,000
Price Per Key $35,000
Capex Spent To Date $850,000
Capex Remaining $3,350,000
Remaining Lender $200,000
Renovation Reserves
Leverage $4,750,000

WYNDHAM GARDEN

Amarillo, TX

Wyndham Garden Inn - 3100 W. Interstate 40 Amarillo, Texas

Wyndham Garden Inn- Amarillo, TX

Highlights

This full-service hotel is undergoing significant renovations totaling $7.5 million, or over $28,000 per key, as part of the Wyndham Garden rebranding.

Amenities include a lounge/restaurant, breakfast dining area, fitness center and indoor pool, two lobby business centers, guest vending machine on every floor, and a third party-operated gift shop.

In 2015, $6.0 million was invested in renovating the hotel’s lobby, Pour House restaurant, back-of-house, common areas, and guest rooms on floors one through five. Despite only renovating 50 percent of the guest rooms through year-end 2015, the positive renovation impact can still be seen in the June through November increase in Average Daily Rate (ADR) of 19.6 percent over prior year while the competitive set of properties only achieved ADR growth of 5.2 percent. Additional RevPAR growth of 28.0 percent is budgeted for 2016.

Property Details
Address 3100 W. Interstate 40 Amarillo, TX 79102
Flag Wyndham Garden
Number of Rooms 259 guest rooms
Avg. Room Size 9377 Square Feet
Date Acquired September 15, 2015
YTD Occupancy (Nov 2015) 35.1 percent
YTD ADR (Nov 2015) $68.06
YTD RevPAR (Nov 2015) $23.92
Purchase Price Allocation $18,310,000
Price Per Key $69,000
Capex Spent To Date $6,020,000
Capex Remaining $1,490,000
Net Equity $7,720,000
Leverage $10,590,000

*Purchase price represents debt plus net equity values stated in FCRETI’s public filings.

QUALITY INN

Albuquerque, NM

Quality Inn - 7620 Pan American Fwy NE Albuquerque, NM 87109

Quality Inn - Albequerque, NM

Highlights

This select-service hotel is currently branded as a Quality Inn, however, the REIT intends to explore alternative branding options requiring varying levels of Product Improvement Plan (“PIP”) renovations. We expect our future renovation budget to total approximately $1.7 million, or $10,000 per key, subject to brand PIP requirements

Existing amenities include an outdoor swimming pool, fitness room, market pantry, breakfast dining area, and a 1,520 square foot meeting room. The subject property has excellent highway visibility.

As of Nov 2015, the Quality Inn Albuquerque achieved year-to-date Occupancy of 34.7 percent compared to 59.8 percent for the comp set resulting in an Occupancy Penetration of 58.0 percent. Occupancy grew 45.3 percent over prior year while the comp set improved only 1.7 percent and Occupancy growth of trailing-three months of Sept, Oct, and Nov was even higher at 66.5 percent, indicating additional opportunity for improvement in performance, especially upon renovation completion.

Property Details
Address 7620 Pan American Fwy NE Albuquerque, NM 87109
Number of Rooms 168 guest rooms
Appraised Value $4,300,00
Year Built 1986
Date Acquired September 15, 2015
YTD Occupancy (Nov 2015) 39.2 percent
YTD ADR (Nov 2015) $55.60
YTD RevPAR (Nov 2015) $21.69
Purchase Price Allocation $6,320,000
Price Per Key $37,600
Capex Remaining $1,490,000
Remaining Lender Renovation Reserves $479,000
Leverage $2,991,000

BEST WESTERN

Roswell, NM

Best Western - 2000 North Main Street Roswell, New Mexico 88201

Best Western - Roswell, NM

Highlights

This select-service hotel is currently branded as a Best Western, however, the REIT intends to explore alternative branding options requiring varying levels of Product Improvement Plan (“PIP”) renovations. Although we make no guaranty, we expect our future renovation budget to total approximately $1.3 million, or approximately $10,500 per key, subject to brand PIP requirements

Amenities include a restaurant, breakfast dining area, fitness room, indoor pool, business center, and 3,744 square feet of meeting space.

Property Details
Address 2000 North Main Street Roswell, NM 88201
Number of Rooms 124 guest rooms
Appraised Value (Dec 2014) $3,600,00
Year Built 1977
Date Acquired September 15, 2015
TTM Occupancy (Nov 2015) 56.1 percent
TTM ADR (Nov 2015) $71.42
TTM RevPAR (Nov 2015) $40.23
Purchase Price Allocation $4,650,000
Price Per Key $37,500
Remaining Lender Renovation Reserves $350,000
Leverage $3,804,000

RED LION FARMINGTON

Farmington, NM

Red Lion Hotel - 700 Scott Ave. A32, Farmington, New Mexico 87401

Red Lion Hotel - Farmington, NM

Highlights

Currently branded as a Red Lion, the REIT intends to explore alternative branding options requiring varying levels of Product Improvement Plan (“PIP”) renovations for this full-service hotel. We expect our future renovation budget to total approximately $2.0 million, or $10,500 per key, subject to brand PIP requirements.

Amenities include an indoor swimming pool, and whirlpool, fitness center, lobby workstation, guest laundry, 140-seat restaurant, 110-seat lounge, and approximately 10,000 square feet of meeting space and banquet facilities.

This property has increased its ADR by 13.5 percent year-to-date (“YTD”) November while its local competitive set of properties only grew 5.2 percent according to Smith Travel Research (“STR”).

Property Details
Address 700 Scott Ave. A32, Farmington, NM 87401
Number of Rooms 192 guest rooms
Avg. Room Size 284 SQ FT
Year Built 1976
Date Acquired September 15, 2015
YTD Occupancy (Nov 2015) 41.9 percent
YTD ADR (Nov 2015) $64.03
YTD RevPAR (Nov 2015) $26.85
Purchase Price Allocation $7,830,000
Price Per Key $40,800
Remaining Lender Renovation Reserves $420,000
Leverage $7,945,000

RED LION GRANTS

Grants, NM

Red Lion - Grants, New Mexico

Red Lions - Grants, NM

Highlights

This is a select-service hotel with amenities including an indoor swimming pool and whirlpool, fitness center, retail shop, business center, ballroom, and boardroom.

Proposed Details
Address 1501 East Santa Fe Avenue, Grants, NM 87020
Number of Rooms 126 Guest Rooms
Avg. Room Size 455 SQ FT
Year Built 1979
Date Acquired September 15, 2015

RED LION GALLUP

Gallup, NM

Red Lion Gallup - Gallup, New Mexico

Red Lion Gallup - Gallup, NM

Highlights

This is a select-service hotel with amenities including an indoor swimming pool and whirlpool, fitness center, business center, ballroom, and boardroom.

Proposed Details
Address 3009 West Highway 66, Gallup, NM 87301
Number of Rooms 126 Guest Rooms
Avg. Room Size 439 SQ FT
Year Built 1975
Date Acquired September 15, 2015

SERENITY BAY

Antigua

Serenity Bay - Antigua

Serenity Bay - Antigua

Highlights

Serenity Bay is a beachfront development site situated on the southwestern coast of Antigua. Nearly 400 luxury condo and villa units are expected to be built, which will be sold through a Citizenship by Investment Program (CIP) or separately as whole or fractional unit sales. The CIP allows for the acquisition of Antiguan citizenship under certain investment conditions. Persons holding an Antigua passport may travel to over 130 countries without the need for a visa. This visa-free travel privilege is a very attractive opportunity for Chinese, Eastern European, and Middle Eastern nationals. The luxury resort is planned to have several pools, tennis courts, private beach access, restaurants and bars, retail shops, and a spa.

Upon completion, First Capital will generate a positive income stream by leasing the land and improvements to an operator who will provide rental and management services for the unit owners as well as operate ancillary departments including spa, food & beverage operations, parking, retail, and more. Gross unit sales are estimated at $224 million, while total project build-out costs are estimated at $180 million. Expected timeline to complete construction is approximately 24 months after breaking ground.

*Property programming is subject to change

Proposed Development
4 & 5-Star Hotel Resorts, Fractionals, and Whole Ownership
Number of Sites 2
Size +/- 23.0 acres
Appraised Value(100% interest) $7,400,000
Date Acquired September 15, 2015
Appraised Value(51% interest only) $3,774,000
Leverage $0

TOWNSHIP NINE

Sacramento, CA

Township Nine - Sacramento, California

Township Nine - Sacramento, CA

Highlights

Township Nine is part of a larger redevelopment of Sacramento’s River District, where the Sacramento Redevelopment Agency and the City of Sacramento have invested over 100 million dollars in federal and local public dollars in the last 14 years to transition the area from an industrial center to a diverse, urban, mixed-use district.

The development plans for Township Nine call for the construction of up to 2,400 housing units, 840,000 square feet of office space, 150,000 square feet of urban retail.

The site is positioned with frontage along the American River and the Twin Rivers Bike Trail. A light rail station will provide residents and visitors with direct access to downtown Sacramento.

Proposed Development
Location Sacramento, CA
Size 29.9 net developable acres
Lots 13 Lots
Purchase Price Allocation $56,840,092
Date Acquired February 5, 2015
Ownership Interest 92.0 Percent
LTVAppraised Value 46.0 Percent
Appraised Value $78,160,00
Leverage $35,988,143

SALINAS SELF STORAGE

Salinas, CA

Salinas Self Storage - Salinas, California

Salinas Self Storage - Salinas, CA

Highlights

The facility features a unit mix that accommodates the demands of a diverse customer base, containing 37 units under 100 square feet, 94 mid-size units between 100 and 350 square feet, and 11 large units over 1,000 square feet. Units on the first floor have drive-up capability.

The Sponsor has extensive experience in the turnaround, stabilization, and operation of self-storage facilities. This property was previously acquired by the Sponsor in 2011 and contributed to FCRETI in September 2015.

Between 2011 and the twelve month period ending August 2015, rental revenue increased from $121,630 to $192,550, or 58.3 percent. In that same period, net operating income increased from $59,240 to $142,320, or 140.2 percent.

Proposed Details
Address 1 & 3 Bridge St. Salinas, CA
Number of Units 142 Units
Size 33,207 SQ FT
Year Built 1985
Date Acquired September 15, 2015
Occupancy(Units) 67.6 Percent
Occupancy(SQ FT) 67.6 Percent
Purchase Price Allocation $2,400,000
Price Per Key $69,000
TTM Aug Adjusted NOI $142,320
LTV 55.6 percent
Leverage $1,335,000

REMLEY PLACE

San Diego, CA

7324 Remley Place - San Diego, California

7324 Remley Place - San Diego, CA

G STREET

Merced, CA

2104 G Street - Merced, California

2104 G Street - Merced, CA

W9 Lloyd

Lloyd, NY

W9 Lloyd - Lloyd, New York

W9 Lloyd - Lloyd, NY

319 MAIN STREET

Poughkeepsie, NY

319 Main Street - Poughkeepsie, New York

319 Main Street - Poughkeepsie, NY

325 MAIN STREET

Poughkeepsie, NY

325 Main Street - Poughkeepsie, New York

325 Main Street - Poughkeepsie, NY

SACRAMENTO LOTS

Sacramento, CA

Sacramento Home Lots - Sacramento, California

Sacramento Home Lots - Sacramento, CA

Morey Place & Morrison Avenue

Based on market research and local broker feedback, average home prices in this area of North Sacramento are greater than $200,000. We intend to deliver brand new product with top-quality finishes to a market lacking this type of product. We anticipate this approach will lead to premiums over what is currently offered in the market. This site is located just north of the American River and downtown Sacramento and situated alongside Interstate 80.

Proposed Development
Intersection Western Ave, Morrison Ave and Morey Ave
Size 12.7/3.4 acres
Lots 99/36 Lots
Purchase Price Allocation $7,400,000
Date Acquired September 15, 2015
LTV 60.4 Percent
Leverage $1,426,000 on Morey and Morrison


Jessie Avenue

Based on market research and local broker feedback, average home prices in this area of North Sacramento are north of $200,000. Although there can be no guaranty, we expect to deliver a new product with top quality finishes to a market lacking this type of supply. Therefore, we expect to significant premiums over the current market offerings. This site is located just north of the American River and downtown Sacramento and is situated alongside Interstate 80.

Proposed Development
Intersection Jessie Ave and May Street
Size 26.2 acres
Lots 90 Lots
Purchase Price Allocation $2,250,000 / $25,000 per lot
Date Acquired September 15, 2015
LTV 55.5 Percent
Leverage $1,248,000


4th Avenue

The 4th Street lots are located in West Sacramento, just across the Sacramento River from Downtown. This area is characterized by high demand and low supply, a prime environment for new construction. Townhomes developments are planned at 4th Street. Typical home prices in this sub-market are nearly 50 percent higher than the North Sacramento market and are comprised mostly of older vintage product. This West Sacramento market sells at a significant premium to North Sacramento.

Proposed Development
Intersection 4th Street Between B St and C St
Size 0.84 acres
Lots 22 Lots
Purchase Price Allocation $1,100,000 / $50,000 per lot
Date Acquired September 15, 2015


Roseville Road

The Roseville Road lots are in the suburban North Highlands area of North Sacramento. Single-family home developments are planned for the Roseville Road site. Average home prices in this submarket are approximately $250,000.

Proposed Development
Intersection Corner of Roseville Road and Elkhorn Blvd
Size 9.63 acres
Lots 66 Lots
Purchase Price Allocation $1,320,000 / $20,000 per lot
Date Acquired September 15, 2015
LTV 58.7 Percent
Leverage $775,000