Barn & Basket Market: Modern Neighborhood Grocery Opportunity
Deal Overview
Total Raise
$5M
Minimum Investment
$100K
Hold Period
5 Years
LP IRR
15.2%
Return on Equity
1.9x
AVGI presents Barn & Basket Market, a modern neighborhood grocery concept focused on fresh food, convenience, and everyday affordability. Located at 154 Waverly Avenue in Patchogue, New York, this 20,000-square-foot facility sits on a prime 1.64-acre site in a supply-constrained market with high barriers to entry.
The project is designed to capitalize on the shift toward high-quality, "grab-and-go" meals and fresh essentials, serving a densely populated suburb with an average household income of over $135,000. Key highlights of the investment include:
- Centralized Production Advantage: The store utilizes a 100,000 SF centralized food production facility in Bay Shore, NY. This "Commissary" model allows for restaurant-quality prepared foods with significantly lower in-store labor, complexity, and back-of-house space requirements.
- Defensive, Recession-Resistant Asset: As a non-discretionary consumer staple, the grocery sector offers consistent demand and stable performance across all economic cycles.
- Market Monopoly: Currently, there are no other suitable sites in the Village of Patchogue large enough for a modern grocery store, effectively preventing national competitors like Trader Joe’s or Sprouts from entering the immediate trade area.
- Superior Lease Economics: AVGI has secured a 20-year lease at $17/SF NNN—roughly half of the $35/SF market rate—including 12 months of free rent and a $6M purchase option.
- Debt-Free Opening Strategy: The business plan targets a debt-free launch to minimize overhead and downside risk, while focusing capital on aggressive Year 1 marketing and inventory.
- Attractive Investor Returns: The project is raising $5 million in equity for a 33% ownership interest, targeting a 20.45% Net Annualized Investor Return.
This is a unique opportunity to invest in a scalable, tech-forward grocery format that combines a high-margin prepared foods program with a structurally protected market position.
Investment Highlights
- Modern Concept: Neighborhood grocery focused on fresh food, convenience, and everyday affordability.
- Prime Location: 154 Waverly Avenue, Patchogue, NY; a 20,000 SF building on 1.64 acres fully controlled for redevelopment.
- Target Returns: Projected 20.45% Net Annualized Investor Return.
- Competitive Edge: Utilizing a 100,000 SF centralized commissary to offer restaurant-quality prepared foods without the complexity of in-store kitchens.
- Defensive Asset: Grocery is a non-discretionary, recession-resistant consumer staple sector.
- Equity Raise: Raising $5 million of equity capital for a 33% ownership interest in the SPV.
- The first $1M invested is on a lower valuation via a SAFE agreement. It will give the investor(s) within the first $1M effectively 41% ownership.
| Key Assumptions | Metric |
|---|---|
| Store Size | 20,000 SF |
| Total Cost to Open | $3.5M - $5.2M |
| Revenue Per Sq. Ft. | $800 - $1,000 |
| EBITDA Margin | 14 - 16% |
| Net Annualized Return | 20.45% |
Investment Thesis
Defensive Sector in Uncertain Times
Grocery stores are a non-discretionary, consumer staple sector with consistent demand across all economic cycles, providing a buffer against recessionary pressures.
Favorable Demographics & Limited Competition
Patchogue is a densely populated suburb of young families (Median Age: 42). Current grocery options are outdated and do not prioritize the high-demand "grab-and-go" and prepared meal segments busy families require.
Supply Constraints
The market lacks suitable sites large enough for new modern grocers. AVGI’s control of this site creates a barrier to entry for competitors like Trader Joe’s, Sprouts, or Uncle Giuseppe’s.
Operational Strategy: The Commissary Advantage
Barn & Basket Market utilizes a centralized production model as its core competitive pillar. By producing prepared meals off-site in a high-efficiency 100,000 SF facility (Bay Shore, NY), the store maximizes selling space and reduces in-store labor and complexity.
- Emphasis on Speed: Curated SKUs (140 projected) focused on essentials and grab-and-go meals for busy families.
- Higher Productivity: Nearly the entire 20,000 SF footprint is dedicated to selling items, resulting in higher sales per square foot than traditional grocers.
- Lower Costs: Leaner staffing requirements and lower shrink due to off-site packaging and replenishment.
- Quality Control: Restaurant-quality food consistency enabled by large-scale production innovation at the Bay Shore facility.
Facility Stats:
The 100,000 SF centralized food production facility at the former Entenmann's factory is expected to be complete by mid-2026, supporting the market with daily fresh replenishment.
Lease Economics
AVGI structured a lease that is roughly half of market value ($17/SF vs. $35/SF market) to mitigate downside for investors and provide a long-term runway for the first flagship location.
Operational Budget Summary
The project targets a Debt-Free Opening to minimize overhead and allow for heavy marketing investment in Year 1. Fixed costs for major bids (Signage, Roof, HVAC, Inventory) are already locked-in.
| Category | Fixed/Locked Cost | Range (Low - High) |
|---|---|---|
| Site Work & Exterior (Parking, Roof, Steel) | $1,157,500 | -- |
| Internal Systems (Electrical, HVAC, Plumbing) | -- | $410,000 - $880,000 |
| Store Equipment (Cases, Freezers, POS, Deli) | $65,000 | $515,000 - $1,110,000 |
| Initial Inventory | $500,000 | -- |
| Total Anticipated Budget | $1,872,500 (Fixed) | $3,511,000 - $5,202,500 |
ROI Sensitivity Analysis
Projected Net Return on Investment to the 33% Investor Group based on Total Development Cost and EBITDA performance.
| Annual EBITDA | $3,511,000 (Low Cost) | $4,356,750 (Avg Cost) | $5,202,500 (High Cost) |
|---|---|---|---|
| $2,400,000 | 22.56% | 18.18% | 15.22% |
| $2,560,000 | 24.06% | 19.39% | 16.24% |
| $2,700,000 (Base) | 25.38% | 20.45% | 17.13% |
| $2,880,000 | 27.07% | 21.81% | 18.27% |
| $3,000,000 | 28.20% | 22.72% | 19.03% |
Meet the Team
Operator Overview
Raffael Avgi
Retail Operating Partner
Raffael oversees construction strategy and project execution with 30+ years of retail experience. He has managed diverse assets including medical office and industrial developments, focusing on cost control and timeline management.
David Yehuda
Retail Development & Design
With 35+ years in commercial design and supermarket development, David specializes in optimizing layout and traffic flow. His revenue-driven design execution is central to delivering high-performing retail concepts.
Lou Horodyski
Retail Product Manager
Lou brings 7+ years of expertise in grocery and prepared foods. He specializes in merchandising and margin optimization, ensuring food safety and cost-efficient growth through strong purveyor relationships.
Sponsor Overview: AVGI
AVGI is a real estate investment firm purchasing opportunistic assets across the U.S. With over $80M in developments under construction and $130M in holdings, AVGI uses proprietary sourcing to acquire assets significantly below market value.
Allon Avgi
Managing Partner
Founder and CEO of AVGI. Allon built a $30M AUM portfolio within 4 years using his own capital. He has tripled the company's AUM in the last 2 years and targets a $1 billion portfolio by age 30.
Christopher Catalano
Director of Property Management
President of CXA Management, overseeing 400+ apartments and 100k SF of commercial space. Chris focuses on operational efficiencies to drive NOI growth for investors.
Michael Genovese
Investor Relations
Michael leads Investor Relations for the Barn & Basket project, managing subscriptions and ensuring transparent communication with capital partners.
Invest in Barn & Basket Market: Modern Neighborhood Grocery Opportunity
Total raise
$5M
Min Investment
$100K
Hold time
5 Years
LP IRR
15.2%
Return on equity
1.9x
↓ More details available to qualified investors ↓
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