Two-Property Industrial Portfolio – Long Island, NY

Portfolio Overview

100 Carney Street | Glen Cove, NY

AVGI and its affiliates are under contract to acquire 100 Carney Street, a 29,500-sf industrial property located in Glen Cove, NY (“Carney"). Carney consists of five tenants, with 19,500 sf on month-to-month leases below market, and the remaining 10,000 sf expiring in March of 2026. AVGI sourced Carney from a family that inherited the property through an estate and does not want to manage the building. The rents are below market by 90%, although the building itself is in great condition.

801 South 1st Street | Ronkonkoma, NY

AVGI and its affiliates are under contract to acquire 801 S 1st Street, an 18,200-sf industrial property located in Ronkonkoma, NY (“S 1st”). S 1st consists of 12 small-bay spaces and 2-yard spaces, and all of the tenants are automotive repair uses. The property is 100% occupied with a weighted average lease term (WALT) of 0.58 years, with 35% of the spaces on month-to-month leases.

AVGI is a real estate investment firm that purchases opportunistic assets in New York as well as secondary and tertiary markets throughout the United States. The firm currently has in excess of $80 million of new developments under construction throughout Long Island and $120 million of real estate holdings across 6 markets - Long Island, Houston, Little Rock, New York City, Binghamton, and St. Louis.

Leadership Team

CXA Property Management is a full-service property & asset management firm based in Long Island, New York. With a customer-centric approach, Chris has the unique skill of providing the best services and experiences for our residents and commercial customers, while also optimizing efficiencies to drive NOI growth for our investors.

CXA currently has over 450+ units and 150k+ commercial square feet under management since formation in early 2020. CXA Property Management has a team of over 20 highly skilled professionals in leasing, accounting, landlord/tenant relations, and construction and maintenance.

100 Carney Street is positioned between Pratt Boulevard and Cedar Swamp Road in the Town of Oyster Bay and is 0.5-miles from the newly-developed Garvies Point Landing—a 52-acre transformative infrastructure mixed use project. 100 Carney Street is ideally located near an abundance of rich amenities and is surrounded by several affluent residential communities.

Business Plan

The anchor tenants that are on month-to-month leases have mentioned that while they would prefer to stay, they are going to look at the market to lease other space as they do not agree on the market rental rate we proposed. As they have looked at more space, they came back to us to begin conversations regarding a lease extension. We still expect that they will not agree to pay us market rent, that they will vacate, and that we will re-lease Carney at our market rate over the course of the year. We also expect the other 3 tenants to move out when their leases expire as well. AVGI was able to negotiate in the contract that we can start to market the 19,500 sf for lease while under contract and has tapped Colliers to begin the tenant procurement process.

Project Financial Details

801 South 1st Street is in an industrial park bounded by Lakeland Avenue and Smithtown Avenue. This industrial area is within 0.5 miles of the Long Island MacArthur Airport and has unparalleled access via Ocean Avenue, the Long Island Expressway (I-4195), and Veterans Memorial Highway. The proximity to airport and commercial industrial trade area offers tenants the infrastructure and logistics needed to optimize operations and increase their business exposure.

Business Plan

AVGI and its affiliates plan to make necessary renovations to the exterior of the building and renew tenants at market as their leases expire. All but 3 spaces are under market by more than 25%, with the remaining units 20-25% below market. The immediate vacancy rate in the area is sub 5%, and it is even tighter for small bay product like this. As a result, all users have expressed a desire to stay, especially because automotive uses have a very difficult time getting necessary permits and approvals to lease new space. While we are confident all tenants will renew at market, or existing tenants will take more space, we are expecting the 8 tenants that are receiving 35% increases or more to vacate and new tenants to be in and paying market rent in 3 months.

Project Financial Details

Case Study Highlights:

• 65-79 E Jefryn Blvd, Deer Park, NY:
  • Acquired off-market with all tenants on month-to-month leases.
  • Successfully negotiated rent increases from $10 psf gross to $14 psf net.
  • Offered tenants the option to purchase their units, resulting in two sales at $192-208 psf.
  • Achieved a blended IRR of 191.42% on the sold units and significantly increased NOI.
  • Original expected NOI was $157,937 and the realized NOI was $172,187.
  • Original expected YOC was 9.87% and the Actual YOC was 11.05%.

• 1575 Lakeland Ave, Bohemia, NY:
  • Acquired from an owner-user with significant vacancy.
  • Subdivided vacant space and successfully leased to multiple tenants, including the Suffolk County Police Department.
  • Increased rent for the existing tenant by 118%.
  • Overcame a major setback (building damage) while staying within budget and exceeding projected yield-on-cost.
  • Original expected NOI was $140,042 and the realized NOI was $170,337.
  • Original expected YOC was 7.18% and the Actual YOC was 8.97%.

These case studies demonstrate AVGI's ability to identify undervalued assets, implement effective management strategies, and achieve superior financial results.